AAFX TRADING

Daily Market Lookup

  • The U.S. dollar edged lower in early European trade Tuesday, falling back from a 20-year peak, as attention turns towards Europe, with Wednesday’s Eurozone inflation data likely to point to an aggressive ECB interest rate hike next month. The dollar soared higher at the end of last week after Federal Reserve chief Jerome Powell firmly committed to raising interest rates to tame inflation, even at the cost of a decline in economic growth. This means upcoming economic data, and Friday’s monthly nonfarm payrolls in particular will be studied carefully as investors try to figure out whether the central bank can pull off an economic slowdown without triggering a recession. Ahead of this, the Eurozone is set to release August CPI figures on Wednesday, with annual inflation expected to accelerate to 9.0% from 8.9% in July, well above the ECB’s 2% target. The data will likely add to pressure on the ECB to hike rates aggressively at its upcoming September meeting even amid the mounting risk of a recession. European Central Bank board member Isabel Schnabel acknowledged this over the weekend, saying central banks risk losing public trust and must now act forcefully to combat inflation, even if that drags their economies into a recession. USD/CNY rose 0.1% to 6.9149, with the pair near a two-year high after China’s finance minister indicated the country’s authorities would step up measures to boost demand and stabilize employment and prices in the second half of the year, potentially resulting in a looser monetary policy.
  • The dollar struggled to regain momentum on Tuesday after being beaten back from a two-decade high versus major peers by a reinvigorated euro. The tables turned for the two currencies as traders began ramping up bets for a super-sized 75-basis-point interest rate increase by the European Central Bank while paring the odds for one by the U.S. Federal Reserve. Traders see better than 50% odds for a 75 bps move after a parade of ECB speakers at the Fed's annual symposium in Jackson Hole backed the case for a big hike. By comparison, bets for a 75 bps increase by the Fed on Sept. 21, while higher at 70%, have receded from as much as 75% on Monday. Monthly U.S. jobs figures due on Friday will be closely watched for further clues to the interest rate outlook The euro was also helped by a retreat in European gas prices after German economy minister Robert Habbeck said the country was filling gas storage facilities faster than expected.
  • Gold prices recovered slightly on Tuesday, taking some relief as the dollar retreated from a 20-year peak, although hawkish signals from the Federal Reserve still weighed on the market. Slight weakness in the greenback helped bullion prices gain on Monday. The dollar retreated against the euro on expectations that the European Central Bank will tighten monetary policy more aggressively than initially thought. But the outlook for the yellow metal is severely depressed by the prospect of higher U.S. interest rates. Gold slumped last week after the Fed signaled it has no plans to ease on its path of monetary tightening. The move pushed the dollar to a 20-year peak, and also drove up short-term Treasury yields. Metal markets are now looking at upcoming U.S. payrolls data this week. Strength in the jobs market is likely to give the Fed much more room to hike interest rates aggressively. After the Fed's comments on Friday, markets are pricing in a greater chance of a 75 basis point hike by the central bank in September. Despite weakness in stock and currency markets, gold has seen limited inflows as a safe haven. But this could change if the economic outlook worsens. Among industrial metals, copper prices recovered on Tuesday, taking support from some weakness in the dollar. Focus is now on Chinese manufacturing activity data on Wednesday for more cues on copper demand.
  • Oil prices dipped on Tuesday, paring some gains from the previous session, as the market feared that more aggressive interest rates hikes from central banks may lead to a global economic slowdown and soften fuel demand. Inflation is near double-digit territory in many of the world's biggest economies, a level not seen in close to a half century, which could prompt central banks in the United States and Europe to resort to more aggressive interest rate hike. Also weighing on prices, Russia's oil output has exceeded expectations in the wake of the war in Ukraine, the head of the International Energy Agency (IEA) said on Monday. But he said that Moscow, which calls its actions in Ukraine "a special operation", will find it increasingly difficult to uphold production as Western sanctions begin to bite. IEA members nations could release more oil from strategic petroleum reserves (SPR) if they find it necessary when the current scheme expires, the head of the agency also said. However, political violence on Monday night in Iraq, OPEC's second-largest producer, supported prices. Government security forces and militias loyal to Shi'ite cleric Moqtada al-Sadr clashed around the Green Zone that houses government headquarters and embassies in the capital Baghdad, killing 20, in a long-running dispute over the formation of a new government since elections last year. Also offering some support to prices is tight supply. Saudi Arabia, top producer in the Organization of the Petroleum Exporting Countries (OPEC), last week raised the possibility of production cuts, which sources said could coincide with a boost in supply from Iran should it clinch a nuclear deal with the West. OPEC+, comprising OPEC, Russia and allied producers, meets to set policy on Sept. 5. The American Petroleum Institute, an industry group, is due to release data on U.S. crude inventories on Tuesday with the Energy Information Administration, the statistical arm of the U.S. Department of Energy, to follow on Wednesday. U.S. crude oil stockpiles likely fell 600,000 barrels with distillates and gasoline inventories also seen down, a preliminary Reuters poll showed on Monday.

 

 
Intraday RESISTANCE LEVELS
30th August 2022 R1 R2 R3
GOLD-XAU 1,732-1,740 1,751 1,760-1,774
Silver-XAG 18.90-19.50 19.80-20.00 20.70-21.00
Crude Oil 96.30-97.00 98.30 99.00-99.90
EURO/USD 0.9950-0.9995 1.0030-1.0090 1.0150-1.0190
GBP/USD 1.1760-1.1850 1.1930 1.2060-1.2010
USD/JPY 139.40-140.0 140.70 141.40-142.00

Intraday SUPPORTS LEVELS
30th August 2022 S1 S2 S3
GOLD-XAU 1,718-1,706 1,700 1,690-1,679
Silver-XAG 18.40-17.80 17.40 17.00-16.50
Crude Oil 95.00-94.20 93.00 92.35-90.50
EURO/USD 0.9910-0.9850 0.9790 0.9700-0.9640
GBP/USD 1.1695-1.1600 1.1540-1.1480 1.1410-1.1350
USD/JPY 138.50-137.90 136.50-136.00 135.20-134.10

Intra-Day Strategy (30th 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 Friday made its intraday high of US$1745.46/oz and low of US$1720.29/oz. Gold is up by 0.0858% at US$1737.43/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 1732-1800 keeping stop loss closing above 1800, targeting 1718-1707 and 1700-1690-1671. Buy in between 1718-1679 with risk below 1679, targeting 1732-1740-1760 and 1774-1785-1798.

 
Intraday Support Levels
S1     1,718-1,706
S2     1,700
S3     1,690-1,679
Intraday Resistance Levels
R1     1,732-1,740
R2     1,751
R3     1,760-1,774

Technical Indicators

Name   Value Action
14DRSI  

37.095

Buy
20-DMA   1755.77 Sell
50-DMA  

1772.60

Sell
100-DMA   1799.90 Sell
200-DMA   1817.81 Sell
STOCH(5,3)   34.008 Sell
MACD(12,26,9)   -7.270 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$18.90/oz and low of US18.50/oz settled down by 0.0798% at US$18.75/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     18.40-17.80
S2     17.40
S3     17.00-16.50

Intraday  Resistance Levels
R1     18.90-19.50
R2     19.80-20.00
R3     20.70-21.00

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$96.95/bbl, an intraday low of US$92.00/bbl, and settled down by 4.27% to close at US$96.57/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, giving 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 96.50-99.90 with stop loss at 100.05; targeting 95.00-94.20-93.00 and 92.35-91.30-90.50. 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
S3     92.35-90.50

Intraday Resistance Levels
R1     96.30-97.00
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 Monday made an intraday low of US$0.9913/EUR, a high of US$1.0028/EUR, and settled the day up by 0.283% to close at US$0.9993/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$1.1647/GBP, a high of US$1.1743/GBP, and settled the day down 0.781% to close at US$1.1706/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 1.1695-1.1350 with a target of 1.1760-1.1850 and 1.1890-1.1930-1.2060 with stop loss closing below 1.1480. Sell in between 1.1760-1.2010 with targets at 1.1695-1.1600-1.1540 and 1.1480-1.1410-1.1350 with stop loss should be 1.2630.

 
Intraday Support Levels
S1     1.1695-1.1600
S2     1.1540-1.1480
S3     1.1410-1.1350

Intraday Resistance Levels
R1     1.1760-1.1850
R2     1.1930
R3     1.2060-1.2010

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

33.005

Buy
20-DMA   1.1908 Sell
50-DMA   1.2054 Sell
100-DMA   1.2294 Sell
200-DMA   1.2659 Sell
STOCH(5,3)   20.734 Sell
MACD(12,26,9)   -0.0049 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made an intra‐day low of JPY137.55/USD and made an intraday high of JPY138.99/USD and settled the day up by 0.773% at JPY138.70/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 139.40-142.00 with risk above 142.00 targeting 136.00-135.20-134.10 and 133.00-132.50-131.90. Long positions above 136.60-132.50 with targets of 137.90-138.50 and 139.40-140.00 with stops below 128.50.

 
Intraday Support Levels
S1     138.50-137.90
S2     136.50-136.00
S3     135.20-134.10

INTRADAY RESISTANCE LEVELS
R1     139.40-140.0
R2     140.70
R3     141.40-142.00

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