AAFX TRADING

Daily Market Lookup

  • The U.S. dollar pushed higher Tuesday ahead of the central bank's key Jackson Hole symposium later this week, while the euro fell to two-decade lows as Europe’s energy woes deepened. A majority of market participants now expect the Federal Reserve to raise rates by 75 basis points in September, data from exchange operator CME Group showed on Tuesday. This hawkish turn of sentiment follows several Fed officials suggesting during last week that the bank will likely not reduce its pace of rate hikes until inflation is comfortably within its target. This puts the focus on Fed Chairman Jay Powell’s speech in Jackson Hole, Wyoming on Friday for clues on the future path of U.S. interest rates. Russian energy giant Gazprom announced late Friday that it will halt natural gas supplies to Europe via the Nord Stream 1 pipeline for three days at the end of the month. Adding to this, damage to a key pipeline system running oil from Kazakhstan through Russia and into Europe further disrupted supply earlier Tuesday. Fears are mounting that western Europe could struggle to guarantee a stable energy supply during the winter months, which would be devastating for business activity just as the European Central Bank tightens monetary policy to tackle soaring inflation. Eurozone flash PMI data are due later in the session, and are expected to show another month of business contraction in August as sentiment weakens. GBP/USD dropped 0.3% to 1.1730, falling to a new 2.5-year low overnight, with energy and slowdown concerns continuing to weigh on sterling, after the Bank of England warned last week that the country’s economy would likely enter a prolonged recession in the fourth quarter.
  • Gold prices rose slightly on Tuesday after seven straight sessions of losses, but remained under pressure as growing expectations of a hawkish Federal Reserve boosted the dollar and treasury yields. Both instruments dropped for the past seven sessions, as expectations that the Fed will keep raising interest rates at a sharp pace drove traders into the dollar. The dollar index retreated slightly on Tuesday, but was trading around six-week highs. The greenback was largely underpinned by a series of hawkish comments from Fed officials last week, which suggested that the central bank has no plans to ease its pace of interest rate hikes. Focus is now on an upcoming address by Fed Chair Jerome Powell to the Jackson Hole Symposium on Friday, where the chair is expected to dismiss speculation that the Fed intends to pivot to a dovish stance. Softer-than-expected U.S. inflation data for July had briefly spurred expectations that the Fed will reduce the size of its interest rate hikes from September. But signs of a robust job market, coupled with hawkish comments from Fed members, have offset this expectation. Traders are now almost evenly split over a 50 basis point and 75 bps hike by the Fed at its next meeting. Gold has shed most of its gains made this year as the Fed hiked rates four times to curb runaway inflation. The yellow metal has largely underperformed the U.S. inflation rate so far in 2022. Among industrial metals, copper prices rose slightly on the prospect of more stimulus measures in major importer China. The People’s Bank of China cut interest rates for a second straight week on Monday, indicating that Beijing is likely to roll out more stimulus measures to support the economy. A stimulus-driven recovery in Chinese industrial activity could drive copper demand higher, benefiting prices.
  • Oil rose on Tuesday as renewed concerns over tight supply dominated market sentiment after Saudi Arabia warned that the major oil producer could cut output to correct a recent oil price decline. Brent crude gained 42 cents, or 0.4%, to $96.90 a barrel by 0630 GMT, after a choppy session on Monday when they dropped by more than $4 before paring losses to trade near flat. It advanced by $1 a barrel in early Asia trading hours. The benchmarks are down about 12% and 8% this month, respectively, amid fears about a global recession and fuel demand. The Organization of the Petroleum Exporting Countries stands ready to reduce production to correct the recent oil price fall driven by poor futures market liquidity and macro-economic fears, which has ignored extremely tight physical crude supply, OPEC's leader Saudi Arabia said on Monday. Saudi state news agency SPA cited Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman as telling Bloomberg that OPEC+ has the means and flexibility to deal with challenges. With Saudi Arabia standing out to defend prices, the market is likely to take the chance to build long positions, said analysts from Haitong Futures, adding that the outcome of the Iranian nuclear deal remains a big uncertainty. Iran accused the United States on Monday of procrastinating in efforts to revive Tehran's 2015 nuclear deal - a charge denied by Washington, which said a deal was closer than two weeks ago because of apparent Iranian flexibility. Meanwhile, Europe faces fresh disruption to energy supplies due to damage to a pipeline system bringing oil from Kazakhstan through Russia, adding to concerns over a plunge in gas supplies. The current tight demand-supply is underscored by U.S. crude inventory in the Strategic Petroleum Reserve (SPR) at its lowest level in more than 35 years, Yeap Jun Rong, market strategist from IG Group, said in a note. On U.S. supply, market participants are awaiting industry data due at 4:30 p.m. ET on Tuesday. U.S. crude oil and gasoline stockpiles likely dropped last week, while distillate inventories edged up, a preliminary Reuters poll showed on Monday.

 

 
Intraday RESISTANCE LEVELS
23rd August 2022 R1 R2 R3
GOLD-XAU 1,741-1,760 1,774 1,785-1,792
Silver-XAG 19.50--19.80 20.00-20.70 21.00-21.45
Crude Oil 92.35-93.00 94.20 95.00-96.25
EURO/USD 0.9950-0.9995 1.0030-1.0090 1.0150-1.0190
GBP/USD 1.1850-1.1930 1.2060-1.2010 1.2110-1.2150
USD/JPY 137.90-138.50 139.40 140.00-140.70

Intraday SUPPORTS LEVELS
23rd August 2022 S1 S2 S3
GOLD-XAU 1,732-1,721 1,706 1,700-1,690
Silver-XAG 18.90-18.40 17.80 17.40-17.00
Crude Oil 90.50-88.20 86.80-86.10 84.90-84.00
EURO/USD 0.9910-0.9850 0.9790 0.9700-0.9640
GBP/USD 1.1760-1.1695 1.1600 1.1480-1.1410
USD/JPY 137.00-136.00 135.20-134.10 133.00-132.50

Intra-Day Strategy (23rd August 2022)
GOLD-XAU Sell on Strength
Silver-XAG Buy on Dips
Crude Oil Neutral to Sell
EUR/USD Neutral to Sell
GBP/USD Neutral to Buy
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Monday made its intraday high of US$1748.99/oz and low of US$1727.73/oz. Gold is down by 0.593% at US$1736.02/oz.

Technicals in Focus:

In daily charts, prices are above 200DMA (1809) and breakage below will call for 1790. MACD is above zero line and histograms are a2lso increasing trend and it will bring upward stance in the upcoming sessions. RSI is in the overbought region and more upside is expected before it gets stretched. Stochastic Oscillator is in neutral territory and giving negative crossover to bearish stance for intraday trade.

Trading Strategy: Sell on Strength

Sell below 1741-1835 keeping stop loss closing above 1835, targeting 1732-1707 and 1700-1690. Buy in between 1732-1707 with risk below 1690, targeting 1760-1774-1785 and 1798-1809-1818.

 
Intraday Support Levels
S1     1,732-1,721
S2     1,706
S3     1,700-1,690
Intraday Resistance Levels
R1     1,741-1,760
R2     1,774
R3     1,785-1,792

Technical Indicators

Name   Value Action
14DRSI  

44.520

Buy
20-DMA   1768.53 Sell
50-DMA  

1781.28

Sell
100-DMA   1807.44 Sell
200-DMA   1822.58 Sell
STOCH(5,3)   6.008 Sell
MACD(12,26,9)   6.008 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$19.57/oz and low of US18.71/oz settled down by 0.199% at US$18.98/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (26.62), breakage above will lead to 27.60. MACD is below the zero line and histograms are decreasing trend and it will bring a bearish stance in the upcoming sessions. RSI is approaching the neutral region, indicating a buy signal for now. The Stochastic Oscillator is in the oversold region and gives a positive crossover to show an upside move for the intraday trade.

Trading Strategy: Buy on Dips

Buy in between 18.90-16.90, targeting 20.45-20.70-21.45 and 21.60-22.50 with stop loss should be placed on the breakage below 16.90. Sell in between 19.50-23.75 with stop loss above 23.75; targeting 18.90-18.40-17.90 and 17.50-16.90-16.40.

 
Intraday  Support Levels
S1     18.90-18.40
S2     17.80
S3     17.40-17.00

Intraday  Resistance Levels
R1     19.50--19.80
R2     20.00-20.70
R3     21.00-21.45

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.961 Buy
20-DMA   19.54 Buy
50-DMA   20.33 Sell
100-DMA   21.30 Sell
200-DMA   22.33 Sell
STOCH(5,3)   74.746 Sell
MACD(12,26,9)   0.1095 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US$90.95/bbl, an intraday low of US$86.22/bbl, and settled up by 1.120% to close at US$90.41/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 20DMA i.e. 68.50 which is a support level and breakage below will call for 65.40. MACD is above the zero line and histograms are in increasing mode will bring a bullish stance in the upcoming sessions. The Stochastic Oscillator is in the neutral region, gives a positive crossover for confirmation of a bullish stance; while the RSI is in the neutral region and more upside can be expected to reach the overbought region, which is highly probable.

Trading Strategy: Neutral to Sell

Sell in between 92.35-96.25 with stop loss at 96.25; targeting 91.30-90.50-89.00 and 88.20-87.00-86.10. Buy above 90.50-83.70 with risk daily closing below 83.70; targeting 92.35 93.00-94.30 and 95.00-96.25.

 
Intraday Support Levels
S1     90.50-88.20
S2     86.80-86.10
S3     84.90-84.00

Intraday Resistance Levels
R1     92.35-93.00
R2     94.20
R3     95.00-96.25

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.262 Sell
20-DMA   91.39 Buy
50-DMA   96.23 Buy
100-DMA   98.32 Buy
200-DMA   94.21 Buy
STOCH(5,3)   80.112 Sell
MACD(12,26,9)   -2.297 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$0.9925/EUR, a high of US$1.0045/EUR, and settled the day down by 3.83% to close at US$0.9941/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.0736), which become immediate support, a break below will target 1.0647. MACD is above the zero line and histograms are increasing mode which will bring a bullish view. Stochastic is in overbought territory and giving positive crossovers to the bullish outlook for intraday. 14D RSI is currently in a neutral region and giving no directions to consider right now.

Trading Strategy: Neutral to Sell

Sell below 1.0090-1.0430, targeting 1.0030-0.9950-0.9860 with stop-loss at daily closing above 1.0430. Buy above 1.0150-0.9800 with risk below 0.9800, targeting 1.0290-1.0335-1.0390 and 1.0430-1.0470.

 
Intraday Support Levels
S1     0.9910-0.9850
S2     0.9790
S3     0.9700-0.9640

Intraday  Resistance Levels
R1     0.9950-0.9995
R2     1.0030-1.0090
R3     1.0150-1.0190

TECHNICAL INDICATORS
Name   Value Action
14DRSI   39.220 Buy
20-DMA   1.0192 Buy
50-DMA   1.0289 Sell
100-DMA   1.0478 Sell
200-DMA   1.0785 Sell
STOCH(5,3)   11.104 Buy
MACD(12,26,9)   -0.0034 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.1741/GBP, a high of US$1.1836/GBP, and settled the day down 0.470% to close at US$1.1762/GBP.

Technicals in Focus:

On daily charts, prices are sustaining below 20DMA (1.2834) is becoming a resistance level. 14-D RSI is currently in an oversold region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in overbought territory and gives a positive crossover to confirm bullish a stance. MACD is above zero line but histograms are increasing leading movement.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; buy in between 1.1760-1.1480 with a target of 1.1890-1.1930-1.2060 and 1.2110-1.2150-1.2245 with stop loss closing below 1.1480. Sell in between 1.1850-1.2550 with targets at 1.1805-1.1760-1.1695 and 1.1600-1.1480 with stop loss should be 1.2630.

 
Intraday Support Levels
S1     1.1760-1.1695
S2     1.1600
S3     1.1480-1.1410

Intraday Resistance Levels
R1     1.1850-1.1930
R2     1.2060-1.2010
R3     1.2110-1.2150

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

33.989

Buy
20-DMA   1.2035 Sell
50-DMA   1.2134 Sell
100-DMA   1.2362 Sell
200-DMA   1.2715 Sell
STOCH(5,3)   5.734 Sell
MACD(12,26,9)   -0.0049 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made an intra‐day low of JPY136.69/USD and made an intraday high of JPY137.64/USD and settled the day up by 0.4398% at JPY137.45/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 200DMA (108.30), which is initial support on the daily chart. 14-D RSI is currently in the overbought region and chances of downward are expected based on RSI. MACD is above the zero line but histograms are in decreasing mode which might lead to downward movement. The Stochastic Oscillator is in neutral territory and signaling to sell as it has given negative crossover to confirm a bearish stance.

Trading Strategy: Neutral to Sell

Sell below 137.00-140.00 with risk above 140.00 targeting 136.00-135.20-134.10 and 133.00-132.50-131.90. Long positions above 136.00-132.50 with targets of 137.00-137.90-138.50 and 139.40-140.00 with stops below 128.50.

 
Intraday Support Levels
S1     137.00-136.00
S2     135.20-134.10
S3     133.00-132.50

INTRADAY RESISTANCE LEVELS
R1     137.90-138.50
R2     139.40
R3     140.00-140.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.518 Buy
20-DMA   134.75 Sell
50-DMA   134.16 Sell
100-DMA   131.21 Sell
200-DMA   125.87 Buy
STOCH(9,6)   94.298 Buy
MACD(12,26,9)   -0.0765 Sell

AAFX TRADING
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