AAFX TRADING

Daily Market Lookup

  • Most Asian currencies sank to multi-year lows on Wednesday as investors awaited an interest rate hike and more hawkish signals from the U.S. Federal Reserve later in the day. U.S. Treasury yields and the dollar were buoyant as markets anticipated an at least 75 basis point hike by the Fed at the conclusion of a two-day meeting later in the day. Hotter-than-expected U.S. inflation data last week also saw traders begin pricing in the slim possibility of a 100 basis point hike. The dollar index and dollar index futures both traded just below 20-year highs, with U.S. interest rates now expected to end the year well above 4%. This would put them at highs seen around the 2008 financial crisis. Asian currencies have fallen sharply this year as a series of rate hikes by the Fed narrowed the gap between risky and low-risk debt. Increasing fears of a global economic recession, as inflation surged, have also severely dented appetite for high-yield, risk-driven assets. Investors will be watching for cues from the Fed on its plans for future rate hikes, as well as the central bank’s outlook on inflation, to gauge how much pressure regional markets will face for the remainder of the year. The Fed has signaled that it intends to keep raising rates until inflation shows clear signs of falling within its target range. China’s yuan fell 0.4% to an over two-year low. Fresh losses in the currency were spurred by a European industry group warning over China’s viability as an investment destination amid continued disruptions from COVID-linked lockdowns. The yuan is one of the worst-performing Asian currencies this year, marred largely by China’s reluctance to scale back its zero-COVID policy, which ground economic activity to a halt.
  • The dollar hovered near a two-decade peak against a basket of currencies on Wednesday, after yields on U.S. Treasuries leaped ahead of another aggressive rate hike expected from the Federal Reserve. Higher yields increase the attraction of owning Treasuries and the dollars with which to buy them. At 1800 GMT the Federal Reserve will announce policy settings, and markets have fully priced in a 75 basis point (bp) rate increase, with a 19% chance of a 100 bp increase and a forecast for rates to peak around 4.5% by March 2023. Investors' focus will also be on the updated economic projections and dot plot estimates showing where Fed officials see interest rates heading. Sweden's Riksbank surprised markets on Tuesday with a bigger-than-expected 100 bp increase, but it was little help to the currency - weighed by growth risks - which fell to a 20-year low after the decision. The Bank of England and the Bank of Japan will announce policy decisions on Thursday, with markets split on the magnitude of a rate hike by the former while policymakers in Japan are expected to stand pat. Japan's core consumer inflation quickened to 2.8% in August, hitting its fastest annual pace in nearly eight years and exceeding the central bank's 2% target for a fifth straight month, data released on Tuesday showed.
  • Oil prices extended losses on Wednesday as traders feared more pressure on crude demand from a widely anticipated interest rate hike by the Federal Reserve, while signs of a potential build in U.S. gasoline inventories also weighed. The Fed is expected to raise interest rates by at least 75 basis points (bps) at the conclusion of a two-day meeting on Wednesday. The move will be the bank’s fifth hike this year, as it moves to temper runaway inflation in the country. But the move will tighten monetary conditions in the U.S., which is expected to weigh on economic activity and in turn on oil demand. Crude demand in the country is already reeling from the double whammy of high inflation and a sharp rise in interest rates this year. The dollar rose in anticipation of the hike. A stronger dollar also weighs on overseas crude demand by making oil imports more expensive. Major importers India and Indonesia in particular have faced pressure on their crude consumption from a stronger dollar. Data from the American Petroleum Institute (API), released on Tuesday, also showed some weakness in crude demand among U.S. consumers. While overall weekly inventories grew less than expected, the API showed that U.S. gasoline inventories grew by 3.2 million barrels last week. The reading, coupled with data earlier this week showing a slowdown in U.S. road travel, pointed to sluggish gasoline demand in the country, even as gas prices fell from record highs. The API data serves as a precursor to official data from the Energy Information Administration, due later today. EIA data is expected to show gasoline inventories fell 0.4 million barrels last week. Oil prices have fallen sharply from highs hit during the onset of the Russia-Ukraine war, amid growing concerns over slowing demand this year. A steady drawdown from the U.S. Strategic Petroleum Reserve has also increased crude supply, weighing on prices. But a harsh European winter could push up crude demand this year, particularly for heating purposes. Tightening supply, as the U.S. considers more sanctions on Russian oil, is also expected to benefit prices.

 

 
Intraday RESISTANCE LEVELS
21st 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 1.1350-1.1380 1.1460-1.1540 1.1600-1.1665
USD/JPY 144.60-145.30 146.00 146.90-147.50

Intraday SUPPORTS LEVELS
21st 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 1.1310-1.1250 1.1210 1.1150-1.1100
USD/JPY 143.10-142.00 141.40-140.70 140.00-139.40

Intra-Day Strategy (21st 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 Tuesday made its intraday high of US$1679.34/oz and low of $1659.91/oz. Gold is down by 0.658% at US$1664.66/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 1664-1650 with risk below 1650, targeting 1690-1711-1732 and 1740-1751-1760.

 
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  

37.024

Buy
20-DMA   1703.05 Sell
50-DMA  

1735.02

Sell
100-DMA   1770.56 Sell
200-DMA   1799.23 Sell
STOCH(5,3)   29.145 Sell
MACD(12,26,9)   -20.030 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$19.57/oz and low of US19.05/oz settled down by 1.44% at US$19.26/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 Tuesday made an intra‐day high of US$85.99/bbl, an intraday low of US$82.90/bbl, and settled down by 0.914% to close at US$84.12/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 Tuesday made an intraday low of US$0.9954/EUR, a high of US$1.0049/EUR, and settled the day down by 0.525% to close at US$0.9968/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 Tuesday made an intra‐day low of US$1.1356/GBP, a high of US$1.1460/GBP, and settled the day down 0.525% to close at US$1.1379/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 1.1310-1.1100 with a target of 1.1350-1.1380-1.1540 and 1.1600-1.1665- 1.1760 with stop loss closing below 1.1250. Sell in between 1.1380-1.1850 with targets at 1.1310-1.1250-1.1210 and 1.1150-1.1100 with stop loss should be 1.2630.

 
Intraday Support Levels
S1     1.1310-1.1250
S2     1.1210
S3     1.1150-1.1100

Intraday Resistance Levels
R1     1.1350-1.1380
R2     1.1460-1.1540
R3     1.1600-1.1665

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

29.402

Buy
20-DMA   1.1560 Sell
50-DMA   1.1787 Sell
100-DMA   1.2075 Sell
200-DMA   1.2487 Sell
STOCH(5,3)   15.784 Sell
MACD(12,26,9)   -0.0136 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made an intra‐day low of JPY142.92/USD and made an intraday high of JPY143.92/USD and settled the day up by 0.370% at JPY143.72/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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