AAFX TRADING

Daily Market Lookup

  • The dollar gained against a basket of currencies on Wednesday, holding near a 20-year high as investors waited for a Friday speech by the Federal Reserve chairman for fresh clues on how aggressive the central bank will be in its battle against inflation. Investors have pared back expectations that the Fed could tilt to a slower pace of rate hikes as inflation remains at 8.5% on an annual basis, well above the Fed's 2% target. Jerome Powell's speech in Jackson Hole will be scrutinized for any indication that an economic slowdown might alter the Fed’s strategy Fed funds futures traders are pricing in a 61% chance that the Fed will hike rates by another 75 basis points at its September meeting, and a 39% probability of a 50 basis points increase. The greenback could give back some gains on Friday if Powell expresses any concerns about the impact of the monetary tightening. The dollar gained even after data on Wednesday showed that new orders for U.S.-made capital goods increased at a slower pace in July from the prior month, suggesting that business spending on equipment could struggle to rebound after contracting in the second quarter. Other data on Wednesday showed that the U.S. economy likely created 462,000 more jobs in the 12 months through March than previously estimated. The euro was down 0.06% against the U.S. dollar at $0.9961, after hitting a 20-year low of $0.99005 on Tuesday. The single currency has been hurt by growth concerns as the region faces an energy crisis. Front-month Dutch gas, the benchmark for Europe, rose again on Wednesday as the prospect of a halt to Russian gas supplies through the main Nord Stream 1 pipeline for three days kept investors on edge. The U.S. dollar edged higher in early European trade Wednesday after more hawkish Fed comments, while the euro continued to languish below parity. Minneapolis Federal Reserve Bank President Neel Kashkari was the latest official to comment on the importance of the central bank to curb inflation above everything else, speaking at a gathering in Minneapolis on Tuesday. Fed chair Jerome Powell is due to speak at the Jackson Hole Symposium in Wyoming on Friday, and he is widely expected to continue the hawkish anti-inflation tone. Eurozone business activity contracted for a second straight month in August, data showed on Tuesday, weighed by benchmark gas prices tripling in a little over two months. Europe, and Germany in particular, is particularly exposed because of its dependence on imports from Russia. Gas supplies have already been reduced, and further cuts would heap even more strain on the region’s economies. The country is facing a severe heatwave, which has dried up some of its riverbeds and impacted regions dependent on hydroelectric power, adding more headwinds to manufacturing activity after a series of COVID lockdowns this year.
  • Gold prices moved little on Thursday, but held on to recent gains as traders awaited more cues on U.S. monetary policy, while copper prices appeared unimpressed by China’s latest stimulus package. Prices of the yellow metal rose marginally in the past two days as the dollar index retreated from a near two-decade high. But traders are hesitant to buy further into the yellow metal ahead of Fed Chair Jerome Powell’s address to the Jackson Hole Symposium on Friday. Investors broadly expect the Chair to reiterate the bank’s hawkish stance, raising little possibility that the Fed will reduce its rate of interest rate hikes About 61% of market participants expect the Fed to hike rates by 75 basis points in September, as it moves to topple inflation from a 40-year peak. Hawkish comments from several Fed officials have also reinforced expectations that the Fed will stick to its path of policy tightening. The central bank has raised rates four times so far this year. This has severely dented gold prices, negating all gains made during the onset of the Russia-Ukraine conflict. Higher yields made the dollar a more attractive bet than gold. Other precious metal prices were also largely muted on Thursday. Among industrial metals, copper prices crept higher, but appeared to be taking little support from a fresh round of Chinese stimulus. China on Wednesday announced a stimulus package worth roughly 1% of its overall GDP, as it faces a drastic slowdown in growth from COVID-19 lockdowns, an ongoing heatwave, and a potential power crunch. Weakness in the country’s industrial sector has severely dented copper prices this year, given that China is the world’s largest importer of the red metal. A worsening real estate crisis in the country is also expected to dent its economic prospects. Still, copper saw some support this week after the People's Bank of China cut interest rates again to support economic growth.
  • Oil prices rose on Thursday on mounting supply tightness concerns amid disruptions to Russian exports, the potential for major producers to cut output, and the partial shutdown of a U.S. refinery. Both crude oil benchmark contracts touched three-week highs on Wednesday after the Saudi energy minister flagged the possibility that the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, will cut production to support prices. Also, discussions on an agreement on Iran's nuclear programme remain stalled, calling into question any resumption of its exports. However, there is still uncertainty ahead for OPEC+ to justify an output reduction amid ongoing negotiations around the Iranian nuclear deal, and a deteriorating macroeconomic picture as the energy crunch gets worse, the Citi analysts added. In the United States, the world's biggest oil consumer, BP (NYSE:BP) reported shutting some units its Whiting, Indiana, refinery after an electrical fire on Wednesday. The 430,000 barrel-per-day plant is a key supplier of fuels to the central U.S. and the city of Chicago. Talks between the European Union, the U.S. and Iran to revive the 2015 nuclear deal are continuing with Iran saying it had received a response from the United States to the EU's "final" text to resurrect the agreement. OPEC sources told Reuters that any cuts by OPEC+ are likely to coincide with a return of Iranian oil to the market, should Tehran secure a nuclear deal with world powers. Falling U.S. crude and product stockpiles also added to the upward pressure on prices. Oil inventories fell by 3.3 million barrels in the week to Aug. 19 at 421.7 million barrels, steeper from analysts' expectations in a Reuters poll for a 933,000-barrel drop. The bullish impact was countered by a drawdown in gasoline inventories that was less than expected, reflecting tepid demand. U.S. gasoline stocks fell by 27,000 barrels in the week to 215.6 million barrels, compared with earlier expectations for a 1.5 million-barrel drop. Overall U.S. gasoline demand sunk in the most recent period, leaving the four-week average of daily gasoline product supplied 7% below the year-earlier period.

 

 
Intraday RESISTANCE LEVELS
25th 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 96.25-97.00 98.30 99.00-99.90
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
25th August 2022 S1 S2 S3
GOLD-XAU 1,740-1,732 1,721-1,706 1,721-1,706
Silver-XAG 18.90-18.40 17.80 17.40-17.00
Crude Oil 95.00-94.20 93.00-92.35 90.50-88.20
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 (25th 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 Wednesday made its intraday high of US$1755.85/oz and low of US$1742.42/oz. Gold is down by 0.191% at US$1751.22/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     1,721-1,706
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 Wednesday made its intraday high of US$19.22/oz and low of US18.94/oz settled up by 0.0523% 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 Wednesday made an intra‐day high of US$95.20/bbl, an intraday low of US$92.66/bbl, and settled up by 1.762% to close at US$95.17/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 96.25-98.25 with stop loss at 98.25; targeting 93.00-92.35-91.30 and 90.50-89.00-88.20 Buy above 95.00-86.10 with risk daily closing below 86.10; targeting 96.25-97.00-98.30 and 99.00-99.90.

 
Intraday Support Levels
S1     95.00-94.20
S2     93.00-92.35
S3     90.50-88.20

Intraday Resistance Levels
R1     96.25-97.00
R2     98.30
R3     99.00-99.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   54.441 Sell
20-DMA   92.24 Buy
50-DMA   96.22 Buy
100-DMA   98.24 Buy
200-DMA   94.25 Buy
STOCH(5,3)   96.932 Sell
MACD(12,26,9)   -1.163 Buy

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$0.9909/EUR, a high of US$0.9998/EUR, and settled the day down by 0.021% to close at US$0.9965/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 Wednesday made an intra‐day low of US$1.1754/GBP, a high of US$1.1836/GBP, and settled the day down 0.309% to close at US$1.1794/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
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