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Daily Market Lookup

  • The U.S. dollar retained a positive tone Tuesday, climbing to a fresh 24-year high against the rate-sensitive Japanese yen, while the euro bounced from its lowest level since 2002 ahead of this week’s European Central Bank meeting. The dollar came off its recent highs on Monday, with the U.S. on holiday, but the currency remains in demand on expectations that the Federal Reserve will continue with its aggressive monetary tightening later this month, with solid labor market data giving the policymakers greater license to try and rein in inflation at 40-year highs. Futures markets have priced in a more than 50% chance the Fed will hike by 75 basis points at its September policy meeting. This dollar strength is best illustrated Tuesday against the Japanese yen, with U.S. monetary policy tightening seen widening the gap with Japan's stubbornly low interest rates. Elsewhere, the dollar eased slightly from multi-year highs against the euro and sterling, although recession fears and an energy crisis mean both these currencies remain weak. The European Central Bank meets later this week, and is widely expected to raise interest rates given inflation is rapidly approaching double digits in the Eurozone. That said, the central bank policymakers have a difficult balancing act to overcome. The weak euro could make already record-high inflation worse through more expensive imports, but growth in the region is already slowing and the threat of energy rationing in winter could throw the Eurozone into a deep recession. German industrial orders fell for the sixth month in a row in July, falling 1.1% on the month and 13.6% on the year, as the war in Ukraine continues to take its toll on Europe's largest economy. Sterling has benefited from reports that Truss has drafted plans to avert an energy crisis, promising tax cuts and financial support for beleaguered homeowners. USD/CNY rose 0.1% to 6.9383, with the yuan trading around its weakest level in more than two years despite the People’s Bank of China saying on Monday that it will cut the amount of foreign exchange reserves needed to be held by financial institutions.
  • Gold prices recovered sharply from a six-week low on Tuesday as a worsening energy crisis in Europe drove up safe-haven demand, while copper extended gains on expectations of more Chinese stimulus measures. Demand for conventional safe havens rose after Russia shut a major gas pipeline to Europe, putting the continent at risk of a major energy crisis. The euro slumped to new 20-year lows this week, given that the crisis is expected to severely impact economic growth in the eurozone. Focus is now on a European Central Bank meeting later in the week, where the bank is widely expected to begin raising interest rates. A rally in the dollar index also appeared to have paused on Tuesday, as traders await more details on the path of U.S. monetary policy. But expectations of more interest rate hikes by the Federal Reserve kept the dollar underpinned around 20-year highs. Rising interest rates have weighed heavily on gold prices this year, as traders sought better yields from the dollar and Treasuries. The Fed is also broadly expected to maintain its pace of rate hikes this month. Chinese government officials said on Monday that the country would likely increase its pace of stimulus measures in the third quarter, after the economy barely expanded in the second quarter. The world’s second-largest economy is facing severe headwinds from COVID-19 lockdowns imposed this year, as well as a potential energy crisis.
  • Oil prices edged lower on Tuesday, paring gains from the previous session, as an OPEC+ deal to cut output by 100,000 barrels per day in October was seen as a largely symbolic move to bolster prices after the market's recent slide. The Organization of Petroleum Exporting Countries and allies led by Russia, together called OPEC+, decided to reverse a 100,000 bpd increase for September after top producer Saudi Arabia and other members voiced concern about the slump in prices since June despite tight supply. Analysts, who had not expected the agreement even after Saudi Arabia had said it wanted to shore up prices, said the cut was mostly symbolic and had limited impact on actual supply given that OPEC+ had been producing below production targets. But the move was important in terms of signalling as it "indicates that OPEC+ is watching demand very closely and is trying to manage supply to keep a floor on oil prices," Noah Barrett, research analyst for energy and utilities at Janus Henderson Investors, wrote in a note. Other factors weighing on the market included a weaker oil demand outlook due to renewed lockdowns in some parts of China as well as an agreement to put price caps on Russian oil exports, said Tina Teng, an analyst at CMC Markets. In response to the price caps on its oil, Russia will ship more supplies to Asia, its energy minister, Nikolai Shulginov, told reporters at the Eastern Economic Forum in Vladivostok on Tuesday. Supporting prices, the European Union's foreign policy chief said he was less hopeful about reaching an agreement on a revival of the Iran nuclear deal, which would delay any return of around 1 million bpd of Iranian crude to the market.

 

 
Intraday RESISTANCE LEVELS
6th September 2022 R1 R2 R3
GOLD-XAU 1,721-1,732 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 1.1600--1.1655 1.1765 1.1850-1.1900
USD/JPY 142.00-142.50 143.10 144.00

Intraday SUPPORTS LEVELS
6th 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 1.1540-1.1490 1.1380 1.1350-1.1295
USD/JPY 141.40-140.70 140.00-139.10 137.90-136.50

Intra-Day Strategy (6th 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 Monday made its intraday high of US$1715.73/oz and low of $1707.67/oz. Gold is up by 0.0992% at US$1710.51/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     1,721-1,732
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 Monday made its intraday high of US$18.23/oz and low of US17.93/oz settled up by 0.687% at US$18.14/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$90.10/bbl, an intraday low of US$86.77/bbl, and settled up by 1.818% to close at US$88.78/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 Monday made an intraday low of US$0.9877/EUR, a high of US$0.9943/EUR, and settled the day down by % to close at US$0.9925/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 Monday made an intra‐day low of US$1.14430/GBP, a high of US$1.1520/GBP, and settled the day up 0.332% to close at US$1.1513/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     1.1540-1.1490
S2     1.1380
S3     1.1350-1.1295

Intraday Resistance Levels
R1     1.1600--1.1655
R2     1.1765
R3     1.1850-1.1900

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 Monday made an intra‐day low of JPY140.06/USD and made an intraday high of JPY140.65/USD and settled the day up by 0.328% at JPY140.57/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     141.40-140.70
S2     140.00-139.10
S3     137.90-136.50

INTRADAY RESISTANCE LEVELS
R1     142.00-142.50
R2     143.10
R3     144.00

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

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