AAFX TRADING

Daily Market Lookup

  • The U.S. dollar edged lower in early European trading Tuesday, but remained near a 20-year high as the market geared up for another aggressive rate increase by the Federal Reserve. The U.S. Federal Reserve starts its latest two-day policy-setting meeting later this session, and is set to continue its policy of super-sized interest rate hikes to try and rein in overheated inflation. An increase of 75 basis points is widely expected, but some investors are bracing for a full percentage point hike as last week’s consumer price index showed inflation remaining stubbornly high. The decision will be accompanied by a fresh set of projections on inflation, economic growth and the future path of interest rates, which will be studied very closely for guidance towards the central bank’s terminal or peak rate. EUR/USD rose 0.1% to 1.0035, strengthening its position above parity after German producer prices rose in August at their strongest rate since records began, climbing 45.8% on the same month last year, with soaring energy prices continuing to act as a main driver. The European Central Bank raised interest rates by 75 basis points last week as the policymakers attempted to tackle inflation nearing double digits. This news from the Eurozone’s largest economy can only strengthen their resolve. The Bank of Japan holds a policy meeting on Thursday, but is widely expected to keep its ultra-easy stimulus settings unchanged. This difference in stance between the Fed and the BOJ is weighing heavily on the yen, with the pair climbing as high as 144.99 in early September for the first time in 24 years. The Bank of England will also decide policy on Thursday, and another interest rate hike is expected, either of 50 or 75 basis points. USD/CNY rose 0.1% to 7.0128, remaining above the psychologically-important 7 level with the Chinese authorities having to strike a delicate balance between loosening monetary policy to support a weakening economy and preventing further losses in the currency.
  • The dollar remained firm near a two-decade high versus major peers on Tuesday as investors braced for another aggressive rate hike by the Federal Reserve as it battles to rein in overheated inflation. Investors have fully priced another 75 basis point bump by the Federal Open Market Committee (FOMC) on Wednesday, and lay 19% odds for a super-sized full percentage point increase. While still elevated, those bets have come down from around 38% on Wednesday, when they were shocked higher by a surprise acceleration in U.S. consumer prices for August. The Bank of Japan decides policy on Thursday, and is widely expected to keep its ultra-easy stimulus settings unchanged -- including pinning the 10-year yield near zero -- to support a fragile economic recovery. That's despite data on Tuesday showing core consumer inflation quickened to an eight-year high of 2.8% in August, exceeding the central bank's 2% target for a fifth straight month. The euro was little changed at $1.00235, after grinding slowly higher over the past week and strengthening its position above parity. It dropped as low as $0.9864 on Sept. 6 for the first time in two decades. Meanwhile, minutes of the Reserve Bank of Australia's meeting this month showed that policymakers see a case for slowing the pace of hikes as rates approached more normal levels.
  • Oil prices steadied on Tuesday after rising in the previous session on concerns that further U.S. interest rate hikes this week to tame inflation will curb economic growth and fuel demand in the world's biggest oil consumer. The dollar remained firm below a two-decade high versus major peers on Tuesday, ahead of a slew of central bank meetings around the world this week led by the U.S. Federal Reserve, which is likely to raise interest rates by another 75 basis points to rein in inflation. The stronger greenback makes dollar-denominated oil more expensive for buyers using other currencies and the expected rate increases have increased concerns that the tightening could trigger a global recession. While other major economies are tightening, China, the world's second-largest oil user on Tuesday left its benchmark lending rates unchanged as it tries to balance supporting its sluggish economic growth against the weakening yuan. U.S. crude oil stocks are estimated to have risen last week by around 2 million barrels in the week to Sept. 16, a preliminary Reuters poll showed on Monday. The U.S. Energy Department will sell up to 10 million barrels of oil from the Strategic Petroleum Reserve for delivery in November, extending the timing of a plan to sell 180 million barrels from the stockpile to tame fuel prices. Signs that major producers are unable to meet their output quotas did give prices some support. An internal document from the Organization of Petroleum Exporting Countries and allies led by Russia, known as OPEC+, showed the group fell short of its oil production target by 3.583 million barrels per day (bpd) in August. In July, the group missed its target by 2.892 million bpd. The impasse over a revival of the Iran nuclear deal is also continuing to keep that country's exports from fully returning to the market. Russia said on Monday that unresolved issues remained in the negotiations while France's foreign minister said that it was up to Tehran to make a decision as the window to find a solution was closing. However, they are signs that higher oil prices this year are curbing demand. U.S. vehicle travel in July fell 3.3% from a year earlier, dropping for a second month.

 

 
Intraday RESISTANCE LEVELS
20th September 2022 R1 R2 R3
GOLD-XAU 1,679-1,690 1,700 1,721-1,730
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
20th September 2022 S1 S2 S3
GOLD-XAU 1,664-1,651 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 (20th 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$1679.89/oz and low of $1659.62/oz. Gold is up by % at US$1675.63/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 1679-1730 keeping stop loss closing above 1700, targeting 1664-1651-1640-1631 and 1620-1610. Buy in between 1712-1664 with risk below 1664, targeting 1732-1740 and 1760-1774-1785.

 
Intraday Support Levels
S1     1,664-1,651
S2     1,640-1,631
S3     1,620-1,610
Intraday Resistance Levels
R1     1,679-1,690
R2     1,700
R3     1,721-1,730

Technical Indicators

Name   Value Action
14DRSI  

34.708

Buy
20-DMA   1707.05 Sell
50-DMA  

1737.81

Sell
100-DMA   1777.66 Sell
200-DMA   1800.57 Sell
STOCH(5,3)   29.145 Sell
MACD(12,26,9)   -20.030 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$19.64/oz and low of US19.21/oz settled up by 0.102% at US$19.55/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     18.90-18.40
S2     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$85.77/bbl, an intraday low of US$81.66/bbl, and settled up by 0.168% to close at US$84.90/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 Monday made an intraday low of US$0.9965/EUR, a high of US$1.0028/EUR, and settled the day up by 0.143% to close at US$1.0021/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 Monday made an intra‐day low of US$1.1354/GBP, a high of US$1.1441/GBP, and settled the day up 0.145% to close at US$1.1428/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 Monday made an intra‐day low of JPY135.54/USD and made an intraday high of JPY136.80/USD and settled the day down by 0.214% at JPY135.71/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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