AAFX TRADING

Daily Market Lookup

  • The U.S. dollar edged lower in early European trade Tuesday ahead of the release of the hotly anticipated U.S. inflation data, which is likely to set the tone ahead of next week’s Federal Reserve meeting. All eyes Tuesday will be on the release of the August U.S. consumer price index at 08:30 ET (12:30 GMT), which will be the last significant guide of the country’s inflationary pressures ahead of next week’s Fed policy-setting meeting. On a monthly basis, the outlook is for inflation to fall 0.1%, where it was flat the prior month. The market will be looking at not just the headline number but the core number that strips out food and fuel to see what the month-to-month trend is. The markets are currently factoring in roughly a 90% chance that the Federal Reserve lifts its benchmark interest rate by 75 basis points at next week's meeting. Elsewhere, EUR/USD rose 0.2% to 1.0139, with the euro continuing to benefit from last week’s jumbo rate hike by the European Central Bank and the associated hawkish comments by a number of officials, including the influential Deutsche Bundesbank President Joachim Nagel, pointing to further rate increases this year. German inflation remained elevated in August at 7.9% on the year, data released earlier Tuesday showed, and this is expected to result in a very weak German ZEW economic sentiment index, later in the session. GBP/USD rose 0.3% to 1.1708, continuing the steep gains seen overnight, despite employment growth in the U.K. slowing sharply in the three months through July. The Office for National Statistics said only 40,000 net jobs were created in the period, down from 160,000 in the three months through June. Even so, the jobless rate fell to 3.6% of the population, its lowest in nearly 50 years, because of the number of people leaving the workforce altogether.
  • The dollar fell to its lowest level in more than two weeks against a basket of currencies on Monday following recent strong gains, as investors grew nervous ahead of U.S. inflation data and as central banks outside of the United States appeared increasingly hawkish. The euro climbed to more than a three-week high against the dollar, with European Central Bank officials arguing for further aggressive monetary tightening. Strategists said the release on Tuesday of the monthly U.S. consumer price index report will be closely watched for clues on how aggressive the Federal Reserve may need to be in hiking interest rates next week to fight high inflation. The Federal Open Market Committee - the Fed's policy-setting arm - is expected at its Sept. 20-21 meeting to raise the central bank's benchmark overnight lending rate again from the current range of 2.25%-2.50%. The dollar index, which measures the currency against six major counterparts, has been strengthening on expectations of an aggressive Fed and reached a two-decade peak of 110.79 last Wednesday. On Monday, it was down 0.4% on the day at 108.31 after hitting its lowest since Aug. 26. The New York Fed's monthly consumer expectations survey showed on Monday that U.S. consumers' inflation expectations slid further in August as gasoline prices extended their steep decline from June's record high, a development likely to be bring some relief to U.S. central bank officials who have been worrying that the highest inflation in 40 years might change consumers' perceptions of how sticky the current price shocks may be. ECB policymakers see increasing risks that the central bank will need to hike its key interest rate to 2% or more to curb record inflation in the euro zone, sources told Reuters. At the same time, the Ifo institute said on Monday, in a U-turn from its forecast three months prior, that Germany's economy will contract next year as a dramatic rise in energy costs due to the Ukraine war extinguishes the chances of recovery after COVID-19 lockdowns. Over the weekend, Japanese officials hinted at intervention to stop the currency from weakening further. A senior government spokesman said in a local television interview that the administration must take steps as needed to counter excessive yen declines.
  • Oil prices rose in volatile trade on Tuesday as worries about tight fuel supplies ahead of winter offset investor concerns about lower demand in China, the world's biggest crude importer, and further increases in U.S. and European interest rates. Worries over tighter inventories continue to support prices. In the United States, the Strategic Petroleum Reserve (SPR) fell 8.4 million barrels to 434.1 million barrels in the week ended Sept. 9, the lowest since October 1984, according to data released on Monday by the Department of Energy. U.S. President Joe Biden in March set a plan to release 1 million barrels per day over six months from the SPR to tackle high U.S. fuel prices, which have contributed to inflation. U.S. commercial oil stocks are expected to have fallen for five weeks in a row, dropping by around 200,000 barrels in the week to Sept. 9, a preliminary Reuters poll showed on Monday. The American Petroleum Institute (API), an industry group, will issue its inventory report at 4:30 p.m. EDT (2030 GMT) on Tuesday. The U.S. Energy Information Administration (EIA) reports at 10:30 a.m. EDT (1430 GMT) on Wednesday. Prospects for a revival of the West's nuclear deal with Iran remained dim. Germany expressed regret on Monday that Tehran had not responded positively to European proposals to revive the 2015 agreement. U.S. Secretary of State Antony Blinken said that an agreement would be unlikely in the near term. Capping gains on oil prices on Tuesday were renewed concerns about lower global fuel demand, as China, the world's second-largest oil consumer, continues to impose COVID-19 curbs. The number of trips taken over China's three-day Mid-Autumn Festival holiday shrank, with tourism revenue also falling, official data showed, as strict COVID-19 rules discouraged people from travelling. The U.S CPI data is set for release at 1230 GMT on Tuesday. While expectations are that the core inflation rate may show a peak, the European Central Bank and the Federal Reserve are prepared to increase interest rates further to tackle inflation. That could lift the value of the U.S. dollar against other global currencies and make dollar-denominated oil more expensive for investors.

 

 
Intraday RESISTANCE LEVELS
13th September 2022 R1 R2 R3
GOLD-XAU 1,732-1,740 1,751 1,760-1,774
Silver-XAG 19.80-20.20 20.70 21.50-21.90
Crude Oil 88.00-88.90 89.50 90.00-90.80
EURO/USD 1.0190-1.0280 1.0340 1.0400-1.0480
GBP/USD 1.1765-1.1850 1.1910 1.1967-1.2050
USD/JPY 143.10-144.60 145.30 146.00-146.90

Intraday SUPPORTS LEVELS
13th September 2022 S1 S2 S3
GOLD-XAU 1,721-1,700 1,690-1,679 1,670-1,664
Silver-XAG 19.50-18.90 18.40-17.80 17.40-17.00
Crude Oil 87.20-85.90 85.10-84.00 83.00-82.10
EURO/USD 1.0120-1.0090 1.0030-0.9995 0.9910-0.9850
GBP/USD 1.1655-1.1600 1.1540-1.1460 1.1380-1.1350
USD/JPY 142.00-141.40 140.70 140.00-139.40

Intra-Day Strategy (13th 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$1735.09/oz and low of $1711.90/oz. Gold is up by 0.433% at US$1724.29/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 Monday made its intraday high of US$20.00/oz and low of US18.83/oz settled up by 4.964% at US$19.78/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 19.20-16.00, targeting 19.80 and 20.45-20.70-21.45 with stop loss should be placed on the breakage below 16.90. Sell in between 19.80-21.50 with stop loss above 21.50; targeting 18.90-18.40-17.70 and 17.50-16.90-16.40.

 
Intraday  Support Levels
S1     19.50-18.90
S2     18.40-17.80
S3     17.40-17.00

Intraday  Resistance Levels
R1     19.80-20.20
R2     20.70
R3     21.50-21.90

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 Monday made an intra‐day high of US$88.68/bbl, an intraday low of US$84.76/bbl, and settled up by 2.26% to close at US$87.73/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     87.20-85.90
S2     85.10-84.00
S3     83.00-82.10

Intraday Resistance Levels
R1     88.00-88.90
R2     89.50
R3     90.00-90.80

TECHNICAL INDICATORS
Name   Value Action
14DRSI   46.988 Sell
20-DMA   88.45 Sell
50-DMA   92.66 Sell
100-DMA   95.80 Sell
200-DMA   93.45 Sell
STOCH(5,3)   73.424 Sell
MACD(12,26,9)   -2.021 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.0058/EUR, a high of US$1.0197/EUR, and settled the day up by 0.122% to close at US$1.0121/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     1.0120-1.0090
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   57.048 Buy
20-DMA   1.0045 Buy
50-DMA   1.0146 Buy
100-DMA   1.0339 Sell
200-DMA   1.0661 Sell
STOCH(5,3)   78.104 Buy
MACD(12,26,9)   -0.0025 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.1599/GBP, a high of US$1.1710/GBP, and settled the day up 0.372% to close at US$1.1679/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 1.1670-1.1350 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 1.1670-1.1600-1.1540 and 1.1480-1.1410-1.1350 with stop loss should be 1.2630.

 
Intraday Support Levels
S1     1.1655-1.1600
S2     1.1540-1.1460
S3     1.1380-1.1350

Intraday Resistance Levels
R1     1.1765-1.1850
R2     1.1910
R3     1.1967-1.2050

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 Monday made an intra‐day low of JPY142.11/USD and made an intraday high of JPY143.49/USD and settled the day up by 0.502% at JPY142.83/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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