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Daily Market Lookup

  • The U.S. dollar edged higher Monday, remaining near a 20-year high at the start of a week dominated by a number of central bank meetings, including a crucial Federal Reserve gathering. The main focus of attention this week will be on the U.S. Federal Reserve, which is scheduled to start its latest two-day policy-setting meeting on Tuesday. The hotter-than-expected U.S. consumer prices for August have cemented expectations for another large rate increase at the conclusion of its meeting on Wednesday. A 75-basis-point rate hike is widely expected, but some investors are bracing for a full percentage point hike, and it’s this possibility which is keeping the dollar fully supported. The Fed isn’t the only central bank meeting this week – policymakers in the U.K., Switzerland, Norway and Japan will also meet during the week as the global fight against inflation intensifies. USD/JPY rose 0.3% to 143.28, in quiet trading with Japan on holiday and ahead of Thursday’s Bank of Japan meeting. The Japanese central bank is very likely to stick with its very loose monetary policy, which has weighed heavily on the year. That said, the central bank may say something about yen weakness amid speculation that Japanese authorities are close to intervening in the foreign exchange market to support the weak currency, which hit a 24-year low against the dollar earlier this month. Elsewhere, the Bank of England, the Swiss National Bank and the Norges Bank are all expected to hike interest rates even as growth in Europe weakens substantially. The World Bank warned last week that the world’s economy has been slowing sharply, and even a "moderate hit to the global economy over the next year could tip it into recession." USD/CNY rose 0.4% to 7.0103, with the pair climbing to an over two-year high, remaining above the psychologically-important 7 level after the People’s Bank of China cut a repo rate on Monday, attempting to support an economy that was severely dented by COVID-related lockdowns.
  • The dollar lingered near a two-decade top on major peers on Monday, ahead of a week loaded with market holidays and central bank decisions from Washington to London and Tokyo. Investors have scrambled to price in higher U.S. interest rates and a stronger dollar, as U.S. consumer price rises have proved stubbornly persistent. Currently, markets have priced in at least another 75 basis point increase for this week's Federal Open Market Committee's meeting, and 19% odds of a super-sized full percentage point bump. This week is also smattered with holidays that could thin liquidity and result in sharper price moves, with Japan and Britain off on Monday, Australia on Thursday, and Japan again on Friday, among others. The poor economic outlook will keep the euro, sterling and pro-cyclical currencies like the Australian dollar under pressure, they said. The BOJ is widely expected to stick with massive stimulus on Thursday, standing out among developed-nation central banks that are all rapidly tightening policy to tame inflation. At the same time, a turning point may come sooner than many policy watchers expect after the BOJ recently dropped the word "temporary" for its description of consumer price rises, even though the level is much lower than places like the United States and Britain. China's yuan was kept to the weaker side of 7 per dollar as economic worries and the possibility of more benchmark interest rate cuts loom on Tuesday. Markets are split on whether the Bank of England will raise rates by 50 or 75 basis points on Thursday. Monetary tightening will clash with new British finance minister Kwasi Kwarteng's emergency mini-budget, to be delivered on Friday, that will give more details about support to help ease the country's cost-of-living crisis.
  • Oil prices started the week on a strong note as the lifting of COVID lockdowns in a major Chinese city boosted optimism over an eventual demand recovery in the world’s largest crude importer. The Chinese megacity Chengdu - which was the biggest city to face COVID lockdowns after Shanghai earlier this year - is set to begin scaling back a two-week lockdown from Monday. The move is expected to boost economic activity in the city, with the resumption of public and private transport likely helping fuel demand. Both contracts were recovering from three consecutive weeks of losses, amid concerns over a possible global recession. Oil prices plummeted from highs hit earlier this year, as lockdowns in China, coupled with rising inflation and interest rates severely dented the outlook for demand this year. Chinese demand in particular suffered greatly as industrial production was suspended across several major hubs. Supply gluts caused by a steady drawdown from the U.S. Strategic Petroleum Reserve, and supply increases by Russia, also pulled prices off annual highs. Focus this week is on a U.S. Federal Reserve meeting, where the central bank is widely expected to raise rates by 75 basis points and signal more tightening to come. The move is also expected after U.S. inflation data read higher than expected in August, indicating that inflationary pressures in the country are yet to ease. Both these factors are set to weigh heavily on economic growth, potentially hurting crude demand in the country. They are also expected to boost the dollar, making crude expensive for overseas importers. Oil prices fell sharply last week after the U.S. inflation reading, while speculation over increased Russian supply also weighed. Still, global oil demand is expected to benefit going into winter, with high natural gas prices pushing more countries to adopt oil for heating purposes. U.S. gasoline demand has also shown resilience so far this year, and is expected to remain steady in the coming months.

 

 
Intraday RESISTANCE LEVELS
19th September 2022 R1 R2 R3
GOLD-XAU 1,664-1,670 1,679 1,690-1,700
Silver-XAG 19.80-20.20 20.70 21.50-21.90
Crude Oil 85.90-87.20 88.40 88.90-89.50
EURO/USD 0.9995-1.0090 1.0120-1.0190 1.0280-1.0340
GBP/USD 1.1460-1.1540 1.1600-1.1665 1.1765-1.1850
USD/JPY 144.60-145.30 146.00 146.90-147.50

Intraday SUPPORTS LEVELS
19th September 2022 S1 S2 S3
GOLD-XAU 1,651-1,640 1,631 1,620-1,610
Silver-XAG 18.90 18.40-17.80 17.40-17.00
Crude Oil 85.10-84.00 82.10 81.50-80.90
EURO/USD 0.9910-0.9860 0.9800 0.9740-0.9690
GBP/USD 1.1380-1.1350 1.1310 1.1250-1.1210
USD/JPY 143.10-142.00 141.40-140.70 140.00-139.40

Intra-Day Strategy (19th 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$1680.26/oz and low of $1654.16/oz. Gold is up by 0.648% at US$1675.28/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 1664-1700 keeping stop loss closing above 1700, targeting 1651-1640-1631 and 1620-1610. Buy in between 1712-1664 with risk below 1664, targeting 1732-1740 and 1760-1774-1785.

 
Intraday Support Levels
S1     1,651-1,640
S2     1,631
S3     1,620-1,610
Intraday Resistance Levels
R1     1,664-1,670
R2     1,679
R3     1,690-1,700

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 Friday made its intraday high of US$19.61/oz and low of US18.77/oz settled up by 0.829% at US$19.57/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 19.00-16.00, 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     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 Friday made an intra‐day high of US$86.10/bbl, an intraday low of US$83.76/bbl, and settled up by 0.425% to close at US$84.91/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 85.90-90.80 with stop loss at 90.80; targeting 85.60-84.00 and 83.00-82.10. Buy above 85.10-82.10 with risk daily closing below 82.10; targeting 85.90-87.20-88.00 and 88.90-89.50-90.80.

 
Intraday Support Levels
S1     85.10-84.00
S2     82.10
S3     81.50-80.90

Intraday Resistance Levels
R1     85.90-87.20
R2     88.40
R3     88.90-89.50

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 Friday made an intraday low of US$0.9944/EUR, a high of US$1.0036/EUR, and settled the day up by 0.180% to close at US$1.0014/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 Friday made an intra‐day low of US$1.1350/GBP, a high of US$1.14795/GBP, and settled the day down 0.381% to close at US$1.1418/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     1.1380-1.1350
S2     1.1310
S3     1.1250-1.1210

Intraday Resistance Levels
R1     1.1460-1.1540
R2     1.1600-1.1665
R3     1.1765-1.1850

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

32.830

Buy
20-DMA   1.1625 Sell
50-DMA   1.1839 Sell
100-DMA   1.2118 Sell
200-DMA   1.2521 Sell
STOCH(5,3)   10.784 Sell
MACD(12,26,9)   -0.0136 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made an intra‐day low of JPY142.82/USD and made an intraday high of JPY143.68/USD and settled the day down by 0.402% at JPY142.91/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   65.699 Buy
20-DMA   141.00 Buy
50-DMA   138.06 Buy
100-DMA   134.43 Buy
200-DMA   128.58 Buy
STOCH(9,6)   64.647 Buy
MACD(12,26,9)   2.184 Sell

AAFX TRADING
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