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Daily Market Lookup

  • The U.S. dollar weakened in early European trade Monday, while the euro jumped to a three-week high as traders reassessed the European Central Bank’s interest rate trajectory in the wake of last week’s jumbo rate hike. The European Central Bank raised its key deposit rate to 0.75% from zero last week, its largest ever hike, and President Christine Lagarde guided for another two or three hikes in an attempt to bring inflation at record levels back to the bank’s targeted 2%. The ECB officials see a rising risk that they will have to raise their key interest rate to 2% or more, at least another 125 basis points of hiking, to curb record-high inflation in the Eurozone despite a likely recession, Reuters reported Monday. The single currency has also been boosted by the news of substantial territorial gains made by Ukrainian troops over the weekend, raising the potential, however remote, of an early end to Russia’s invasion of Ukraine. Elsewhere, GBP/USD rose 0.7% to 1.1667, piggy-backing on the euro’s gains versus the dollar, although the latest economic data showed that Britain's economy grew by less than expected in July when it expanded by 0.2% from June. Gross domestic product fell by 0.6% in June, which included two days of public bank holidays to celebrate the late Queen Elizabeth's 70 years on the British throne. The Federal Reserve meets next week and is widely expected to hike interest rates by a substantial amount once more. Fed Governor Christopher Waller said on Friday that he supports "a significant increase at our next meeting," and St. Louis Fed President James Bullard called for another hike of 75 basis points, which would be the third increase of this size in a row. The euro jumped to a more than three-week peak versus the dollar on Monday, and sterling rose to the highest this month as European Central Bank officials pushed the case for further aggressive monetary tightening. The greenback idled not far from a two-week low against a basket of peers ahead of key U.S. inflation data this week that might give the Federal Reserve room to slow the pace of rate hikes at its Sept. 21 policy meeting. ECB policymakers see a rising risk that they will have to raise their key interest rate to 2% or more to curb record inflation in the euro zone, sources told Reuters. In an interview with German radio over the weekend, Bundesbank President Joachim Nagel said that if the picture for consumer prices doesn't change, "further clear steps must follow." It dipped to the lowest since Aug. 30 at 108.35 in the previous session. Investors are wary ahead of Tuesday's U.S. CPI report, even as Fed officials continued their hawkish rhetoric on Friday, the final day for such comments before a black-out period leading up to the Federal Open Market Committee's deliberations. Fed Governor Christopher Waller said he supports "a significant increase at our next meeting," while St. Louis Fed President James Bullard reiterated his call for a hike of 75 basis points. Japanese officials again hinted at intervention over the weekend, with a senior government spokesman saying in a local television interview that the administration must take steps as needed to counter excessive yen declines. Analysts though doubt intervention would work without the backing of the Fed and other central banks, considering that the Bank of Japan is alone among developed markets in pressing on with stimulus.
  • Gold prices inched higher on Monday, retaining mild gains from last week as the dollar fell further from 20-year highs ahead of key U.S. inflation data this week. The dollar index fell 0.2% on Monday, with focus turning to key U.S. CPI inflation data for August, due tomorrow. Inflation in the world’s largest economy is expected to have eased further from highs hit this year, a trend which may encourage the Federal Reserve to eventually bring down its pace of interest rate hikes. A series of sharp rate hikes by the Federal Reserve severely dented bullion prices this year, as investors sought better yields from U.S. Treasuries and the dollar. This trend is expected to continue in the near-term, with the Fed broadly expected to raise rates by 75 basis points - the upper end of expectations - at its meeting next week. While U.S. CPI inflation did ease slightly in the past month, it remained pinned near 40-year highs by elevated food and fuel costs. But with fuel costs now easing from record highs hit earlier this year, inflation may see more signs of cooling. Other precious metals also rose on weakness in the dollar. Platinum futures added 0.2%, while silver futures jumped nearly 0.7%, with both extending gains from last week. Focus is now on a potential supply shortfall of the red metal, stemming from a strike at the Escondida mine in Chile. Escondida is the largest copper mine in the world. Last week, unionized workers voted to begin partial production stoppages from this week, with plans for a full stoppage later in the month.
  • Oil prices fell on Monday with the global fuel demand outlook overshadowed by COVID-19 restrictions in China and the potential for further interest rate hikes in the United States and Europe. Prices were little changed last week as gains from a nominal supply cut by the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+, were offset by ongoing lockdowns in China, the world's top crude importer. China's oil demand could contract for the first time in two decades this year as Beijing's zero-COVID policy keeps people at home during holidays and reduces fuel consumption. Meanwhile, the European Central Bank and the Federal Reserve are prepared to increase interest rates further to tackle inflation, which could lift the value of U.S. dollar against currencies and make dollar-denominated oil more expensive for investors. Still, global oil prices may rebound towards the end of the year - supply is expected to tighten further when a European Union embargo on Russian oil take effect on Dec. 5. The G7 will implement a price cap on Russian oil to limit Russia's lucrative oil export revenue following its invasion of Ukraine in February, and plans to take measures to ensure that the oil could still flow to emerging nations. Moscow calls its actions in Ukraine "a special opertion".

 

 
Intraday RESISTANCE LEVELS
12th September 2022 R1 R2 R3
GOLD-XAU 1,732-1,740 1,751 1,760-1,774
Silver-XAG 19.50-19.80 20.20 20.70-21.50
Crude Oil 86.50-87.20 88.00 88.90-89.50
EURO/USD 1.0190-1.0280 1.0340 1.0400-1.0480
GBP/USD 1.1655-1.1765 1.1850 1.1910-1.1967
USD/JPY 143.10-144.60 145.30 146.00-146.90

Intraday SUPPORTS LEVELS
12th September 2022 S1 S2 S3
GOLD-XAU 1,721-1,700 1,690-1,679 1,670-1,664
Silver-XAG 18.90-18.40 17.80 17.40-17.00
Crude Oil 85.90-85.10 84.00 83.00-82.10
EURO/USD 1.0150-1.0090 1.0030-0.9995 0.9910-0.9850
GBP/USD 1.1600-1.1540 1.1460 1.1380-1.1350
USD/JPY 142.00-141.40 140.70 140.00-139.40

Intra-Day Strategy (12th 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 Friday made its intraday high of US$1729.43/oz and low of $1708.34/oz. Gold is up by 0.523% at US$1717.47/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 1727-1774 keeping stop loss closing above 1774, targeting 1700-1690-1679 and 1671-1664. Buy in between 1712-1664 with risk below 1664, targeting 1732-1740 and 1760-1774-1785.

 
Intraday Support Levels
S1     1,721-1,700
S2     1,690-1,679
S3     1,670-1,664
Intraday Resistance Levels
R1     1,732-1,740
R2     1,751
R3     1,760-1,774

Technical Indicators

Name   Value Action
14DRSI  

46.517

Buy
20-DMA   1730.92 Sell
50-DMA  

1754.87

Sell
100-DMA   1785.75 Sell
200-DMA   1808.88 Sell
STOCH(5,3)   72.828 Sell
MACD(12,26,9)   -13.853 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$18.94/oz and low of US18.51/oz settled up by 1.64% at US$18.82/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 18.20-16.00, 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 19.50-21.50 with stop loss above 21.50; targeting 18.90-18.40-17.70 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     20.20
R3     20.70-21.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   52.639 Buy
20-DMA   18.81 Buy
50-DMA   19.44 Sell
100-DMA   20.41 Sell
200-DMA   21.63 Sell
STOCH(5,3)   89.103 Sell
MACD(12,26,9)   -0.375 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$86.75/bbl, an intraday low of US$82.35/bbl, and settled up by 4.04% to close at US$85.75/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 85.50-90.40 with stop loss at 90.40; targeting 85.60-84.00-83.00 and 82.10-81.35. Buy above 84.00-81.10 with risk daily closing below 81.10; targeting 86.50-87.20-88.00 and 89.40-90.50-93.00.

 
Intraday Support Levels
S1     85.90-85.10
S2     84.00
S3     83.00-82.10

Intraday Resistance Levels
R1     86.50-87.20
R2     88.00
R3     88.90-89.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   44.261 Sell
20-DMA   88.38 Sell
50-DMA   92.80 Sell
100-DMA   95.94 Sell
200-DMA   93.50 Sell
STOCH(5,3)   43.932 Sell
MACD(12,26,9)   -2.348 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$0.9993/EUR, a high of US$1.0113/EUR, and settled the day up by 0.540% to close at US$1.0048/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 1.0190-1.0430, targeting 1.0150-1.0090-1.0030 and 0.9950-0.9900-0.9860 with stop-loss at daily closing above 1.0430. Buy above 1.0150-0.9850 with risk below 0.9850, targeting 1.0190-1.0280-1.0340 and 1.0400-1.0480.

 
Intraday Support Levels
S1     1.0150-1.0090
S2     1.0030-0.9995
S3     0.9910-0.9850

Intraday  Resistance Levels
R1     1.0190-1.0280
R2     1.0340
R3     1.0400-1.0480

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.061 Buy
20-DMA   1.0040 Buy
50-DMA   1.0149 Buy
100-DMA   1.0344 Sell
200-DMA   1.0667 Sell
STOCH(5,3)   83.104 Buy
MACD(12,26,9)   -0.0034 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.1497/GBP, a high of US$1.1647/GBP, and settled the day up 0.743% to close at US$1.1587/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 1.1655-1.2010 with targets at 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     1.1460
S3     1.1380-1.1350

Intraday Resistance Levels
R1     1.1655-1.1765
R2     1.1850
R3     1.1910-1.1967

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

37.670

Buy
20-DMA   1.1704 Sell
50-DMA   1.1912 Sell
100-DMA   1.2181 Sell
200-DMA   1.2573 Sell
STOCH(5,3)   63.320 Sell
MACD(12,26,9)   -0.0136 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made an intra‐day low of JPY141.49/USD and made an intraday high of JPY144.11/USD and settled the day down by 1.063% at JPY142.56/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 142.40-147.50 with risk above 147.50 targeting 141.40-140.70-140.00 Long positions above 143.10-140.70 with targets of 144.60-145.30-146.000 and 146.70-147.50 with stops below 128.50.

 
Intraday Support Levels
S1     142.00-141.40
S2     140.70
S3     140.00-139.40

INTRADAY RESISTANCE LEVELS
R1     143.10-144.60
R2     145.30
R3     146.00-146.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   64.074 Buy
20-DMA   139.33 Buy
50-DMA   136.83 Buy
100-DMA   133.46 Buy
200-DMA   127.81 Buy
STOCH(9,6)   67.260 Buy
MACD(12,26,9)   -0.0765 Sell

AAFX TRADING
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