AAFX TRADING

Daily Market Lookup

  • The dollar edged back from a fresh two-decade high against the euro on Tuesday after data showed U.S. private sector activity was weaker than expected in August, prompting bets the Federal Reserve may be less aggressive in its rate hiking cycle. The S&P Global (NYSE:SPGI) flash composite purchasing managers index (PMI) for August dropped to its lowest since May 2020, as demand for services and manufacturing contracted for the second-straight month in the face of high inflation and tighter financial conditions. The drop in demand was exactly what the Fed has been trying to achieve with its stiffest run of interest rate hikes since the 1980s. The Fed has hiked rates from near zero in March to the current range of 2.25% to 2.50%, with more increases planned in the months ahead, as it tries to pull inflation back from a 40-year high. Traders are currently pricing in a 47.5% chance the Fed will raise interest rates by 50 basis points (bps) in September and a 52.5% chance it will raise them by 75 bps. That could change when Powell speaks on Friday in Jackson Hole, Wyoming, where central bankers from around the globe will be gathered for the Fed's annual economic symposium. With inflation still running hot, Powell will likely lay out a fairly hawkish outlook for monetary policy that could prompt traders' to more strongly favor the likelihood of a 75 bps rate hike for September, said Matt Weller, global head of research at Forex.com and City Index. If "Powell comes off as hawkish as we expect on Friday, traders are likely to hop back on the bullish dollar bandwagon sooner rather than later," he said. PMI data showed that business activity in Europe contracted less than forecast in August, though the outlook was still bleak.
  • 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 held recent gains on Wednesday as the dollar retreated slightly on weak economic data, with focus now turning to commentary from the Federal Reserve on the path of interest rates. But the dollar arrested its losses after Minneapolis Fed President Neel Kashkari said the central bank is set to keep tightening policy until inflation is clearly under control. Such a scenario is likely to be negative for gold prices. Gold has lost nearly all of its gains this year as a rising dollar and U.S. interest rates pulled traders out of the yellow metal. Focus is now on Fed Chair Jerome Powell’s address to the Jackson Hole Symposium on Friday, which is expected to provide more cues on monetary policy. Traders broadly expect the Chair to maintain his hawkish stance, which will herald more sharp interest rate hikes this year. Other precious metals traded lower on Wednesday, but retained most of their gains made on Tuesday. Platinum and silver futures shed 0.5% each. In industrial metals, copper futures fell 0.4%, after rising 0.6% on Tuesday. While prices of the red metal gained some respite from a dip in the dollar, the outlook for copper has been severely dented by the prospect of slowing economic growth in major importer China. A severe drought and power shortage in the Sichuan province has spurred the closing of several major factories, impeding broader efforts by the Chinese government to support economic growth after a COVID-driven slowdown this year.

 

 
Intraday RESISTANCE LEVELS
24th August 2022 R1 R2 R3
GOLD-XAU 1,751-1,760 1,774 1,785-1,792
Silver-XAG 19.50--19.80 20.00-20.70 21.00-21.45
Crude Oil 94.20-95.00 96.25 97.00-98.30
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
24th August 2022 S1 S2 S3
GOLD-XAU 1,740-1,732 1,721-1,706 1,700-1,690
Silver-XAG 18.90-18.40 17.80 17.40-17.00
Crude Oil 93.00-92.35 90.50-88.20 86.80-86.10
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 136.50-136.00 135.20-134.10 133.00-132.50

Intra-Day Strategy (24th 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 Tuesday made its intraday high of US$1754.08/oz and low of US$1730.76/oz. Gold is down by 0.676% at US$1747.78/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 1751-1835 keeping stop loss closing above 1835, targeting 1732-1707 and 1700-1690. Buy in between 1740-1707 with risk below 1690, targeting 1760-1774-1785 and 1798-1809-1818.

 
Intraday Support Levels
S1     1,740-1,732
S2     1,721-1,706
S3     1,700-1,690
Intraday Resistance Levels
R1     1,751-1,760
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)   1.270 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$19.27/oz and low of US18.78/oz settled up by 0.326% at US$19.10/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$94.06/bbl, an intraday low of US$90.35/bbl, and settled up by 3.598% to close at US$90.35/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 94.20-98.25 with stop loss at 98.25; targeting 93.00-92.35-91.30 and 90.50-89.00-88.20 Buy above 93.00-86.10 with risk daily closing below 86.10; targeting 94.30-95.00-96.25 and 97.00-98.30.

 
Intraday Support Levels
S1     93.00-92.35
S2     90.50-88.20
S3     86.80-86.10

Intraday Resistance Levels
R1     94.20-95.00
R2     96.25
R3     97.00-98.30

TECHNICAL INDICATORS
Name   Value Action
14DRSI   51.780 Sell
20-DMA   91.80 Buy
50-DMA   96.21 Buy
100-DMA   98.27 Buy
200-DMA   94.23 Buy
STOCH(5,3)   91.237 Sell
MACD(12,26,9)   -1.707 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$0.9900/EUR, a high of US$1.0017/EUR, and settled the day up by 0.261% to close at US$0.9967/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 0.9950-1.0430, targeting 0.9900-0.9860-0.9790 and 0.9700-0.9640 with stop-loss at daily closing above 1.0430. Buy above 0.9910-0.9640 with risk below 0.9640, targeting 0.9990-1.0030-1.0090 and 1.0150-1.0190-1.0290.

 
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$1.1877/GBP, and settled the day up 0.579% to close at US$1.1831/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 Tuesday made an intra‐day low of JPY135.80/USD and made an intraday high of JPY137.70/USD and settled the day down by 0.489% at JPY136.77/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     136.50-136.00
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   57.99 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
AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING