AAFX TRADING

Daily Market Lookup

  • The U.S. dollar drifted lower in early European trade Wednesday, retreating from the 20-year peak seen earlier in the week as a nascent rebound in the euro gathers pace. The latest U.S. employment data, the JOLTS report on job openings, pointed to continued strength in the labor market despite the string of large rate hikes by the Federal Reserve. This, combined with continued hawkish comments from a number of Fed officials, point to the U.S. central bank hiking by a probable 75 basis points in September. However, the dollar is struggling to make any further headway as European Central Bank members have joined the fight to combat inflation, also expressing strong determination to do so at the Jackson Hole symposium. The ECB must act decisively to contain inflation, Bundesbank chief Joachim Nagel said on Tuesday, while Belgian central bank Chief Pierre Wunsch said interest rates need to rise to a level that starts to restrict economic activity or above what is considered the "neutral" rate. The euro plays a big role in the overall direction of the greenback, making up almost 60% of the dollar index, and this hawkish testimony has helped the single currency climb over 1% from its Aug. 23 two-decade low. With this in mind, the Eurozone August CPI release will be in focus later Wednesday, with annual inflation expected to accelerate to 9.0% from 8.9% in July, well above the ECB’s 2% target. The Eurozone and the U.K. are both heading for recessions this year, Goldman Sachs said, in a recent note, but surging inflation will still force the region's two biggest central banks to raise interest rates sharply. Chinese yuan benefiting from data showing manufacturing activity shrank slightly less than expected in August - the manufacturing purchasing managers index coming in at 49.4, slightly above expectations of 49.2.
  • 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.
  • Gold prices fell further on Thursday as the U.S. dollar gained ahead of key payrolls data due this week, while copper prices sank on growing concerns over a global economic slowdown. Bullion prices retreated this week, while the dollar stuck to 20-year highs ahead of key U.S. nonfarm payrolls data due on Friday. The dollar index rose 0.3% on Thursday. While U.S. payrolls are expected to be lower in August than the prior month, a stronger-than-expected reading could give the Federal Reserve more space to hike interest rates aggressively this year. Data on Wednesday, however, showed that U.S. private payrolls grew substantially less than expected in August, indicating that the labor market may be cooling. Still, hawkish comments from Fed Chair Jerome Powell last week saw gold and most other metals lose substantially in the past three sessions. Investors are penciling in an over 70% chance that the Fed will hike interest rates by 75 basis points later in September. The red metal fell sharply on Wednesday after data showed Chinese manufacturing activity shrank for a second straight month in August. Weak economic readings from Germany and Japan, coupled with surging inflation in the euro zone also trumped up concerns over slowing economic activity, denting the demand for copper.
  • Oil firms operating in Kurdistan have asked the United States to help defuse an upsurge in tension between Iraq's central government and the semi-autonomous region, according to a letter seen by Reuters and three sources. They say intervention is needed to ensure oil continues to flow from the north of Iraq to Turkey to prevent Turkey having to increase oil shipments from Iran and Russia. They also say the economy of the Kurdistan region (KRI) could be at risk of collapse if it loses oil revenues. Relations soured in February when Iraq's federal court deemed an oil and gas law regulating the oil industry in Iraqi Kurdistan was unconstitutional. Following the ruling, Iraq’s federal government, which has long opposed allowing the Kurdistan regional government (KRG) to independently export oil, has increased its efforts to control export revenues from Erbil, the capital of the KRI. The final hearing from the case took place in Paris in July, and the International Chamber of Commerce will issue a final decision in the coming months, Iraq's oil ministry said.
  • Apart from requiring Turkey to get more crude from Iran and Russia, a cessation of oil flows through the ITP, would cause the KRI's economy to collapse, HKN's letter to U.S. representatives said. Already Iraq is getting less than the full benefit of high oil prices, which leapt to 14-year-highs after major oil exporter Russia invaded Ukraine in February and they remain close to $100 a barrel. The ITP has the capacity to pump up to 900,000 barrels per day (bpd) of crude, roughly 1% of daily world oil demand, from state-owned oil marketer SOMO as well as the KRG. For now it is pumping 500,000 bpd from northern Iraqi fields, which will struggle to boost production further without new investment. Analysts have said companies will withdraw from the Kurdistan region unless the environment showed improves.

 

 
Intraday RESISTANCE LEVELS
1st September 2022 R1 R2 R3
GOLD-XAU 1,718-1,732 1,740-1,751 1,760-1,774
Silver-XAG 18.40-18.90 19.50-19.80 20.00-20.70
Crude Oil 89.40-90.50 91.30 93.00-94.20
EURO/USD 1.0030-1.0090 1.0150 1.0190-1.0280
GBP/USD 1.1655-1.1760 1.1655-1.1760 1.2060-1.2010
USD/JPY 140.00-140.70 141.40 142.00

Intraday SUPPORTS LEVELS
1st September 2022 S1 S2 S3
GOLD-XAU 1,700-1,690 1,679 1,670-1,664
Silver-XAG 17.80-17.40 17.00 16.50-16.00
Crude Oil 88.00-87.20 86.50 86.00-85.10
EURO/USD 0.9995-0.9950 0.9910 0.9850-0.9790
GBP/USD 1.1600-1.1540 1.1480 1.1410-1.1350
USD/JPY 139.10-137.90 136.50 136.00-135.20

Intra-Day Strategy (1st September 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$1726.43/oz and low of US$1709.52/oz. Gold is down by 0.751% at US$1710.97/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 1718-1774 keeping stop loss closing above 1774, targeting 1700-1690-1679 and 1671-1664. Buy in between 1700-1664 with risk below 1664, targeting 1718-1732-1740 and 1760-1774-1785.

 
Intraday Support Levels
S1     1,700-1,690
S2     1,679
S3     1,670-1,664
Intraday Resistance Levels
R1     1,718-1,732
R2     1,740-1,751
R3     1,760-1,774

Technical Indicators

Name   Value Action
14DRSI  

32.349

Buy
20-DMA   1745.60 Sell
50-DMA  

1766.39

Sell
100-DMA   1795.13 Sell
200-DMA   1814.87 Sell
STOCH(5,3)   4.546 Sell
MACD(12,26,9)   -12.794 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$18.53/oz and low of US17.92/oz settled down by 2.271% at US$17.98/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 17.70-16.00, targeting 18.40-18.90-19.50 and 20.45-20.70-21.45 with stop loss should be placed on the breakage below 16.90. Sell in between 18.40-20.75 with stop loss above 20.75; targeting 17.70-17.50-16.90 and 16.40-.

 
Intraday  Support Levels
S1     17.80-17.40
S2     17.00
S3     16.50-16.00

Intraday  Resistance Levels
R1     18.40-18.90
R2     19.50-19.80
R3     20.00-20.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   28.000 Buy
20-DMA   19.11 Buy
50-DMA   19.76 Sell
100-DMA   20.71 Sell
200-DMA   21.86 Sell
STOCH(5,3)   6.746 Sell
MACD(12,26,9)   -0.448 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$92.43/bbl, an intraday low of US$88.05/bbl, and settled down by 3.787% to close at US$88.55/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 92.40-96.50 with stop loss at 100.05; targeting 91.30-90.50-89.40 and 88.00-87.20. Buy above 93.00-86.10 with risk daily closing below 86.10; targeting 93.00-94.20-95.00 and 96.30-97.00-98.30.

 
Intraday Support Levels
S1     88.00-87.20
S2     86.50
S3     86.00-85.10

Intraday Resistance Levels
R1     89.40-90.50
R2     91.30
R3     93.00-94.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.418 Sell
20-DMA   91.75 Buy
50-DMA   95.30 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$0.9970/EUR, a high of US$1.0078/EUR, and settled the day up by 0.383% to close at US$1.0051/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 1.0030-1.0430, targeting 0.9950-0.9900-0.9860-0.9790 and 0.9700-0.9640 with stop-loss at daily closing above 1.0430. Buy above 0.9950-0.9640 with risk below 0.9640, targeting 1.0030-1.0090 and 1.0150-1.0190-1.0290.

 
Intraday Support Levels
S1     0.9995-0.9950
S2     0.9910
S3     0.9850-0.9790

Intraday  Resistance Levels
R1     1.0030-1.0090
R2     1.0150
R3     1.0190-1.0280

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$1.1598/GBP, a high of US$1.1692/GBP, and settled the day down 0.272% to close at US$1.1619/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 1.1600-1.1350 with a target of 1.1670-1.1760-1.1850 and 1.1890-1.1930-1.2060 with stop loss closing below 1.1480. Sell in between 1.1695-1.2010 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     1.1600-1.1540
S2     1.1480
S3     1.1410-1.1350

Intraday Resistance Levels
R1     1.1655-1.1760
R2     1.1655-1.1760
R3     1.2060-1.2010

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

28.480

Buy
20-DMA   1.1850 Sell
50-DMA   1.2018 Sell
100-DMA   1.2266 Sell
200-DMA   1.2638 Sell
STOCH(5,3)   10.415 Sell
MACD(12,26,9)   -0.0049 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made an intra‐day low of JPY138.26/USD and made an intraday high of JPY138.99/USD and settled the day up by % at JPY138.95/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     139.10-137.90
S2     136.50
S3     136.00-135.20

INTRADAY RESISTANCE LEVELS
R1     140.00-140.70
R2     141.40
R3     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
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