AAFX TRADING

Daily Market Lookup

  • The U.S. dollar stabilized in early European trade Wednesday, pausing for breath after the previous session’s sharp gains in the wake of the hotter-than-expected U.S. inflation report. U.S. inflation turned out stronger than expected in August. In particular, the so-called 'core CPI' rose a thumping 0.6%, twice what was expected, driving the annual core inflation rate up to 6.3% from 5.9% in July. That's the highest it's been since the 40-year high that it hit in March. This largely cements another big hike in interest rates from the Federal Reserve when its policymakers meet next week. Markets have already priced in a high possibility that the Fed will raise rates by 75 basis points next week, but the chance of a full 1% rate increase is now also being considered. Bank of Japan conducted a rate check, making traders wary that it was preparing to intervene to support the beleaguered currency. Japanese Finance Minister Shunichi Suzuki also said that recent moves in the yen have been "rapid and one-sided", the conditions that could prompt the government to support the currency. The euro selloff occurred despite last week’s historic 75 basis-point hike by the European Central Bank, and the signaling of more hikes to come by a number of policymakers. This hawkish rhetoric continued Tuesday, with Governing Council member Gediminas Simkus, the Lithuanian central bank chief, saying the central bank should raise interest rates by at least a half-point at its October meeting. GBP/USD rose 0.1% to 1.1498, attempting to recover from a 1.6% fall overnight, despite the rate of inflation in the U.K. dropping back under 10% in August as falling fuel prices took a little of the heat out of the ongoing cost-of-living crisis. That said, sterling losses were limited Wednesday as core inflation remained strong, suggesting that the headline figures were flattered by the drop in fuel prices.
  • 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. Analysts expect the headline number to be 8.1%, which would be down from 8.5% in July, with gasoline prices having fallen nearly 10% since last month. 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. 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.
  • Oil fell on Thursday as expectations of weaker demand and a strong U.S. dollar ahead of a potentially large interest rate increase outweighed supply concerns. The International Energy Agency said this week oil demand growth would grind to a halt in the fourth quarter. [IEA/M] The dollar held near recent peaks, supported by expectations the U.S. Federal Reserve will continue to tighten policy. Crude has dropped substantially after a surge close to its all-time highs in March after Russia's invasion of Ukraine added to supply concerns, pressured by the prospects of recession and weaker demand. New clashes between Armenia and Azerbaijan, an oil producer, raised concern of threats to supply and limited the decline.
  • Gold prices held just above the $1,700 mark on Wednesday, remaining under pressure after stronger-than-expected U.S. inflation data pointed to more dollar strength in the coming weeks. Bullion prices plummeted on Tuesday after data showed the U.S. consumer price index grew more than expected in August, cementing expectations that the Federal Reserve will not let up in its tightening path this year. Spot gold briefly broke below $1,700- a level that has served as a key point of support for the yellow metal this year. Analysts expect losses in gold to deepen substantially if prices break reliably below the $1,700 mark. The dollar rallied after the CPI data, jumping 1.7% on Tuesday and coming back up to near 20-year highs, which further pressured metal prices. Investors held off from making big trades on gold ahead of a Fed meeting next week, where the central bank is widely expected to raise interest rates by 75 basis points. Stubborn inflation is likely to spur a similar hike when the bank meets in November. Other precious metals were also pressured by a strong dollar on Wednesday. Silver futures plummeted 0.9%, while platinum lost 0.2%. Gold and its precious metal peers have fallen substantially from peaks hit earlier in the year, as a sharp rise in interest rates saw investors seek better yields in the dollar and sovereign debt. Among industrial metals, copper prices were flat on Wednesday, after plummeting over 2% in the prior session. Strength in the dollar was the biggest factor behind its losses. Prices of the red metal trended higher over the past few sessions as traders foresaw tighter supply stemming from a strike at Chile’s Escondida, the world’s largest copper mine. But slowing economic growth across the globe, especially as interest rates keep rising, is expected to dent demand and offset tightness in supply.

 

 
Intraday RESISTANCE LEVELS
15th September 2022 R1 R2 R3
GOLD-XAU 1,721-1,732 1,740-1,751 1,760-1,774
Silver-XAG 19.80-20.20 20.70 21.50-21.90
Crude Oil 88.40-88.90 89.50 90.00-90.80
EURO/USD 0.9995-1.0090 1.0120-1.0190 1.0280-1.0340
GBP/USD 1.1540-1.1600 1.1665 1.1765-1.1850
USD/JPY 144.60-145.30 146.00 146.90-147.50

Intraday SUPPORTS LEVELS
15th September 2022 S1 S2 S3
GOLD-XAU 1,700-1,690 1,679 1,670-1,664
Silver-XAG 19.20-18.90 18.40-17.80 17.40-17.00
Crude Oil 87.20-85.90 85.10 84.00-82.10
EURO/USD 0.9910-0.9860 0.9800 0.9740-0.9690
GBP/USD 1.1460-1.1380 1.1350 1.1310-1.1250
USD/JPY 143.10-142.00 141.40-140.70 140.00-139.40

Intra-Day Strategy (15th 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 Wednesday made its intraday high of US$1707.03/oz and low of $1693.59/oz. Gold is down by 0.274% at US$1697.33/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 1721-1774 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     1,700-1,690
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  

39.035

Buy
20-DMA   1724.47 Sell
50-DMA  

1749.36

Sell
100-DMA   1781.12 Sell
200-DMA   1805.85 Sell
STOCH(5,3)   38.828 Sell
MACD(12,26,9)   -14.133 Buy

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$19.69/oz and low of US19.22/oz settled down by 2.27% at US$19.63/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     19.20-18.90
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 Wednesday made an intra‐day high of US$89.61/bbl, an intraday low of US$85.73/bbl, and settled up by 1.291% to close at US$88.48/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 88.40-90.80 with stop loss at 90.80; targeting 88.00-87.20-85.60 and 84.00-83.00-82.10. Buy above 87.20-82.10 with risk daily closing below 82.10; targeting 88.00-88.90 and 89.50-90.80-93.00.

 
Intraday Support Levels
S1     87.20-85.90
S2     85.10
S3     84.00-82.10

Intraday Resistance Levels
R1     88.40-88.90
R2     89.50
R3     90.00-90.80

TECHNICAL INDICATORS
Name   Value Action
14DRSI   44.970 Sell
20-DMA   88.22 Sell
50-DMA   92.40 Sell
100-DMA   95.61 Sell
200-DMA   93.37 Sell
STOCH(5,3)   77.424 Sell
MACD(12,26,9)   -1.971 Buy

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$0.9954/EUR, a high of US$1.0023/EUR, and settled the day down by 0.104% to close at US$0.9980/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 0.9950-1.0430, targeting 0.9950-0.9900-0.9860 and 0.9800-0.9740-0.9690 with stop-loss at daily closing above 1.0430. Buy above 0.9910-0.9690 with risk below 0.9690, targeting 0.995-1.009-1.0120 and 1.0190-1.0280-1.0340.

 
Intraday Support Levels
S1     0.9910-0.9860
S2     0.9800
S3     0.9740-0.9690

Intraday  Resistance Levels
R1     0.9995-1.0090
R2     1.0120-1.0190
R3     1.0280-1.0340

TECHNICAL INDICATORS
Name   Value Action
14DRSI   43.786 Buy
20-DMA   1.0023 Buy
50-DMA   1.0133 Buy
100-DMA   1.0328 Sell
200-DMA   1.0652 Sell
STOCH(5,3)   41.104 Buy
MACD(12,26,9)   -0.0025 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.1479/GBP, a high of US$1.1589/GBP, and settled the day up 0.408% to close at US$1.1538/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 1.1460-1.1250 with a target of 1.1540-1.1600-1.1665 and 1.1760-1.1850-1.1890 with stop loss closing below 1.1250. Sell in between 1.1540-1.1850 with targets at 1.1460-1.1380-1.1350 and 1.1310-1.1250 with stop loss should be 1.2630.

 
Intraday Support Levels
S1     1.1460-1.1380
S2     1.1350
S3     1.1310-1.1250

Intraday Resistance Levels
R1     1.1540-1.1600
R2     1.1665
R3     1.1765-1.1850

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

37.214

Buy
20-DMA   1.1652 Sell
50-DMA   1.1858 Sell
100-DMA   1.2133 Sell
200-DMA   1.2533 Sell
STOCH(5,3)   23.320 Sell
MACD(12,26,9)   -0.0136 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made an intra‐day low of JPY142.54/USD and made an intraday high of JPY144.95/USD and settled the day up by 1.088% at JPY142.97/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 144.40-147.50 with risk above 147.50 targeting 143.10-142.00-141.40 and 140.70-140.00 Long positions above 143.10-140.70 with targets of 144.60-145.30-146.00 and 146.70-147.50 with stops below 128.50.

 
Intraday Support Levels
S1     143.10-142.00
S2     141.40-140.70
S3     140.00-139.40

INTRADAY RESISTANCE LEVELS
R1     144.60-145.30
R2     146.00
R3     146.90-147.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   67.114 Buy
20-DMA   140.50 Buy
50-DMA   137.63 Buy
100-DMA   134.07 Buy
200-DMA   128.29 Buy
STOCH(9,6)   64.647 Buy
MACD(12,26,9)   2.184 Sell

AAFX TRADING
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