AAFX TRADING

Daily Market Lookup

  • The U.S. dollar touched a new 20-year high against a basket of currencies on Monday, benefiting from weakness in the euro amid a worsening energy crisis, while investors continued to bet on more interest rate hikes by the Federal Reserve. The greenback advanced further against the euro on Monday, after Russia shut a major gas pipeline to Europe, raising concerns over a severe power shortage in the bloc. Strength in the dollar also comes on the heels of better-than-expected nonfarm payrolls data on Friday, which gives the Federal Reserve more space to hike interest rates sharply. While wage growth slowed and unemployment rose unexpectedly, investors remained confident that relative tightness in the jobs market would give the central bank enough impetus to raise rates sharply in September. Traders are pricing in a 57% chance the Fed will raise rates by 75 basis points this month. The central bank has hiked rates four times this year, as it struggles to combat inflation running at 40-year highs. Hawkish signals from Fed Chair Jerome Powell in August suggested that the Fed likely sees inflation sticking to elevated levels for longer, which is likely to invite more interest rate hikes. Most Fed officials now see rates ending the year comfortably above 3%. Rising interest rates in the U.S. have steadily pressured most other currencies this year, as the gap between U.S. and other yields narrowed.
  • The U.S. dollar edged lower in early European trade Friday, but remained near a two-decade high ahead of the widely watched monthly U.S. jobs report which could point to further hefty interest rate hikes. The U.S. August nonfarm payroll release is due at 08:30 ET (12:30 GMT) and is expected to show that 300,000 jobs were added last month, while the unemployment rate is seen remaining at 3.5%. While this would represent a slowing in job growth from July’s 528,000, it would still mark the 20th straight month of job growth and likely support a continuation of aggressive rate hikes from the Fed to the benefit of the dollar. Futures markets have priced in as much as a 75% chance the Fed will hike by 75 basis points at its September policy meeting. This expectation of further Fed interest rate hikes has been reflected most acutely in the USD/JPY pair, as traders increasingly see a widening interest rate gap. The euro has received some support ahead of next week’s European Central Bank meeting, as the bank is widely expected to lift interest rates by a hefty 75 basis points next week after Eurozone CPI climbed to a new record in August.
  • Gold prices fell slightly on Monday, extending sharp declines from last week as strength in the dollar and growing uncertainty over hawkish U.S. monetary policy weighed on appetite for the yellow metal Bullion prices saw fresh pressure on Monday as the greenback jumped to a new 20-year high, while Treasury yields also advanced. Data on Friday showed that U.S. nonfarm payrolls grew more than expected in August, giving the Fed more space to keep hiking rates sharply. While U.S. wage growth lagged and unemployment rose, traders are pricing in a 57% chance of a 75 basis point hike at the Fed’s next meeting, seeing sufficient tightness in the labor market. Gold prices have fallen significantly from 2022 highs as the Fed began hiking interest rates and pushed up yields. The Fed is looking to combat inflation reaching 40-year highs on rising food and fuel prices. Several members of the central bank recently indicated that interest rates are likely to keep increasing until inflation is substantially closer to the bank’s 2% target. The prospect of stronger interest rates has also seen the dollar largely overtake gold as a go-to safe haven. This saw the yellow metal benefit little from a recent escalation in geopolitical tensions between China and Taiwan Among industrial metals, copper prices reversed early losses and traded flat after better-than-expected Chinese services sector activity data. Caixin data showed that a recovery in China’s services sector persevered through August, indicating that certain facets of the economy remained robust despite a slowdown in manufacturing activity China is the world’s largest importer of copper. Slowing economic growth in the country has severely dented copper prices so far this year.
  • Oil prices rose more than $2 a barrel on Monday, extending gains as investors eyed possible moves by OPEC+ producers to cut output and support prices at a meeting later in the day. U.S. markets are closed for a public holiday on Monday. At their meeting later on Monday, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, may decide to keep current output levels or even cut production to bolster prices, despite supplies remaining tight. Russia, the world's second-largest oil producer and a key OPEC+ member, does not support a production cut at this time, and the group will likely keep its output steady when it meets on Monday, the Wall Street Journal reported on Sunday, citing unidentified people familiar with the matter. Despite the possibility for output cuts, CMC's Teng pointed out that downside risks also remain, naming potential exports from Iran amid its ongoing nuclear deal negotiations and recession fears as two such risks. Oil prices have fallen in the past three months, after touching multi-year highs in March, on concerns that interest rate rises and COVID-19 curbs in parts of China, the world's top crude importer, may slow global economic growth and cool oil demand. Lockdown measures in China's southern tech hub of Shenzhen, however, eased on Monday as new infections showed signs of stabilising though the city remained on high vigilance. Negotiations to revive the West's 2015 nuclear deal with Iran have dragged on though an agreement could allow Tehran to increase exports and improve global supplies. The White House on Friday rejected linking the deal with the closure of investigations by the U.N. nuclear watchdog, a day after Iran reopened the issue, according to a Western diplomat.

 

 
Intraday RESISTANCE LEVELS
5th 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 0.9995-1.0030 1.0090-1.0150 1.0190-1.0280
GBP/USD 1.1480-1.1540 1.1600-1.1655 1.1760-1.1850
USD/JPY 140.70-141.40 142.00 142.50-143.10

Intraday SUPPORTS LEVELS
5th 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 0.9950-0.9910 0.9850 0.9790-0.9850
GBP/USD 1.1450-1.1380 1.1350 1.1295-1.1250
USD/JPY 140.00-139.10 137.90-136.50 136.00-135.20

Intra-Day Strategy (5th 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

old on Friday made its intraday high of US$1717.92/oz and low of $1694.97/oz. Gold is up by 0.890% at US$1694.97/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 Friday made its intraday high of US$18.28/oz and low of US17.76/oz settled down by 0.593% at US$18.04/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 Friday made an intra‐day high of US$89.31/bbl, an intraday low of US$86.01/bbl, and settled up by 0.099% to close at US$86.82/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-
R2     90.50-91.30
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 Friday made an intraday low of US$0.9941/EUR, a high of US$1.0033/EUR, and settled the day down by 0.099% to close at US$0.9953/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 0.9995-1.0430, 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     0.9950-0.9910
S2     0.9850
S3     0.9790-0.9850

Intraday  Resistance Levels
R1     0.9995-1.0030
R2     1.0090-1.0150
R3     1.0190-1.0280

TECHNICAL INDICATORS
Name   Value Action
14DRSI   34.295 Buy
20-DMA   1.0040 Buy
50-DMA   1.0174 Sell
100-DMA   1.0377 Sell
200-DMA   1.0699 Sell
STOCH(5,3)   18.104 Buy
MACD(12,26,9)   -0.0034 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.1495/GBP, a high of US$1.1588/GBP, and settled the day down 0.293% to close at US$1.1507/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     1.1450-1.1380
S2     1.1350
S3     1.1295-1.1250

Intraday Resistance Levels
R1     1.1480-1.1540
R2     1.1600-1.1655
R3     1.1760-1.1850

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

23.544

Buy
20-DMA   1.1779 Sell
50-DMA   1.1975 Sell
100-DMA   1.2234 Sell
200-DMA   1.2615 Sell
STOCH(5,3)   8.255 Sell
MACD(12,26,9)   -0.0146 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made an intra‐day low of JPY139.86/USD and made an intraday high of JPY140.76/USD and settled the day down by 0.0242% at JPY140.16/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     140.00-139.10
S2     137.90-136.50
S3     136.00-135.20

INTRADAY RESISTANCE LEVELS
R1     140.70-141.40
R2     142.00
R3     142.50-143.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   70.99 Buy
20-DMA   137.48 Buy
50-DMA   135.74 Buy
100-DMA   132.66 Buy
200-DMA   127.19 Buy
STOCH(9,6)   90.298 Buy
MACD(12,26,9)   -0.0765 Sell

AAFX TRADING
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