AAFX TRADING

Daily Market Lookup

  • The U.S. dollar soared in early European trading Thursday, posting a new 24-year high against the yen after the Federal Reserve’s hawkish interest-rate projections contrasted with the Bank of Japan’s dovish stance. The U.S. central bank lifted rates by 75 basis points on Wednesday, as widely expected, but it also signaled that its policy rate would rise by 4.4% by year-end and top out at 4.6% by the end of 2023. This suggests interest rates will climb higher and stay elevated for longer than the markets had previously priced in This dollar strength played out especially against the yen after the Bank of Japan held interest rates at ultra-low rates and maintained its dovish stance. Japanese authorities have been muttering about intervention given the yen’s 20% slide against the dollar this year. This continued Thursday as Masato Kanda, vice finance minister for international affairs, said Japan has not intervened in the currency market yet but will "most certainly" do so when necessary. EUR/USD dropped 0.2% to 0.9817, just off a new 20-year low of 0.9809, with the single currency already weighed by Russian President Vladimir Putin's move Wednesday to mobilize a portion of the country's 2-million-strong military reserve, upping the political temperature in the region. The BoE is widely expected to increase interest rates for the sixth consecutive meeting later in the session, with an increase of 75 bps to match the Fed’s move - the current market favorite. However, it’s debatable whether such a move will give the pound much of a boost given the country is heading for a deep recession at the end of the year, according to the Bank of England’s own forecasts, and the government is likely to have to borrow heavily to pay for the recently announced support to businesses for energy costs.
  • The U.S. dollar surged to a new 24-year high against the yen after the Bank of Japan stuck to ultra-easing stimulus on Thursday, just hours after the Federal Reserve surprised markets with hawkish interest-rate projections. The greenback had already pushed to a new 37-year peak to sterling ahead of the Bank of England's policy announcement later in the day, and to a two-decade top versus the euro. Japan's top currency diplomat said later that officials had not intervened in the market On Wednesday, the Fed issued new projections showing rates peaking at 4.6% next year with no cuts until 2024. It raised its target interest rate range by another 75 basis points (bps) overnight to 3.00%-3.25%, as was widely expected. The dollar was already supported by demand for safe-haven assets after Putin announced he would call up reservists to fight in Ukraine and said Moscow would respond with the might of all its vast arsenal if the West pursued what he called its "nuclear blackmail" over the conflict there. The market currently sees 80% odds for a 75 bps rate hike by the BOE, and 20% probably of a half point increase.
  • Oil prices extended losses on Thursday after the U.S. Federal Reserve struck a more hawkish tone than expected, raising concerns that heightened interest rates and inflation will weigh on crude demand in the coming months. Crude prices sank in choppy trade on Wednesday after the Fed hiked interest rates by 75 basis points, as expected. But comments from Fed Chair Jerome Powell, who stated that more aggressive measures were needed to curb inflation, rattled markets with the prospect of tighter monetary policy. Powell said the central bank is now willing to risk weakness in the economy and the labor market as it moves to rein in inflation. Other major central banks are also expected to hike rates to curb high inflation, with the Bank of England set to act later today. Rising rates, coupled with heightened inflation, are expected to weigh on crude demand by eventually slowing economic growth. High interest rates also limit the spending ability of consumers, weighing on gasoline demand. Strength in the dollar, which hit a 20-year high on Thursday, has also dented overseas crude demand this year by making oil imports more expensive. Fears of these trends have dragged oil prices down from annual highs hit during the onset of the Russia-Ukraine war. Measures by the U.S. government to lower fuel prices have also flooded the market with crude, as the White House steadily drew from the Strategic Petroleum Reserve this year. But an escalation in the Russia-Ukraine conflict could further disrupt Russian crude supply, indicating a potential upside for prices. President Vladimir Putin this week announced a partial mobilization of troops to “annex” certain Ukrainian territories. Russia’s initial invasion of Ukraine had caused oil prices to skyrocket in February, given that major consumers in Europe and Asia rely heavily on Moscow for supplies. Tightening supply, particularly as the war escalates, could push oil prices higher. A harsh European winter is also expected to boost crude demand as more countries switch to heating oil.

 

 
Intraday RESISTANCE LEVELS
22nd 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 84.00- 85.10 85.90 87.20-88.40
EURO/USD 0.9860-0.9910 0.9995-1.0090 1.0120-1.0190
GBP/USD 1.1250-1.1310 1.1350-1.1380 1.1460-1.1540
USD/JPY 146.00-146.90 147.50 148.00-148.90

Intraday SUPPORTS LEVELS
22nd September 2022 S1 S2 S3
GOLD-XAU 1,660-1,651 1,640-1,631 1,620-1,610
Silver-XAG 18.90-18.40 17.80 17.40-17.00
Crude Oil 82.90-82.10 81.50 80.90-79.00
EURO/USD 0.9800-0.9740 0.9690 0.9650-0.9580
GBP/USD 1.1210-1.1150 1.1100 1.0995-1.0910
USD/JPY 144.60-145.30 143.10-142.00 141.40-140.70

Intra-Day Strategy (22nd 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$1687.99/oz and low of $1653.67/oz. Gold is up by 0.538% at US$1673.69/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 1660-1650 with risk below 1650, targeting 1690-1711-1732 and 1740-1751-1760.

 
Intraday Support Levels
S1     1,660-1,651
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 Wednesday made its intraday high of US$19.91/oz and low of US19.23/oz settled up by 1.484% 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 Wednesday made an intra‐day high of US$86.50/bbl, an intraday low of US$82.38/bbl, and settled down by 1.52% to close at US$82.83/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 84.00-90.80 with stop loss at 90.80; targeting 83.00-82.10-81.50 and 80.90-79.00. Buy above 82.10-79.00 with risk daily closing below 79.00; targeting 84.00-85.10-85.90 and 87.20-88.00-88.90.

 
Intraday Support Levels
S1     82.90-82.10
S2     81.50
S3     80.90-79.00

Intraday Resistance Levels
R1     84.00- 85.10
R2     85.90
R3     87.20-88.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   40.783 Sell
20-DMA   86.41 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$0.9812/EUR, a high of US$0.9975/EUR, and settled the day down by 1.327% to close at US$0.9836/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 0.9860-1.0430, targeting 0.9800-0.9740-0.9690 and 0.9650-0.9580 with stop-loss at daily closing above 1.0430. Buy above 0.9800-0.9590 with risk below 0.9590, targeting 0.9860-0.9910-0.9995 and 1.0090-1.0120-1.0190.

 
Intraday Support Levels
S1     0.9800-0.9740
S2     0.9690
S3     0.9650-0.9580

Intraday  Resistance Levels
R1     0.9860-0.9910
R2     0.9995-1.0090
R3     1.0120-1.0190

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$1.1235/GBP, a high of US$1.1384/GBP, and settled the day down 0.927% to close at US$1.1263/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 1.1210-1.1100 with a target of 1.1250-1.1310-1.1380 and 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     1.1210-1.1150
S2     1.1100
S3     1.0995-1.0910

Intraday Resistance Levels
R1     1.1250-1.1310
R2     1.1350-1.1380
R3     1.1460-1.1540

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

25.445

Buy
20-DMA   1.1522 Sell
50-DMA   1.1762 Sell
100-DMA   1.2056 Sell
200-DMA   1.2474 Sell
STOCH(5,3)   7.5660 Sell
MACD(12,26,9)   -0.0148 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made an intra‐day low of JPY143.33/USD and made an intraday high of JPY144.69/USD and settled the day up by 0.237% at JPY144.06/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 146.00-148.90 with risk above 148.90 targeting 144.60-145.30-143.10 and 142.00-141.40-140.70. Long positions above 144.60-140.70 with targets of 146.00 and 146.70-147.50 with stops below 128.50.

 
Intraday Support Levels
S1     144.60-145.30
S2     143.10-142.00
S3     141.40-140.70

INTRADAY RESISTANCE LEVELS
R1     146.00-146.90
R2     147.50
R3     148.00-148.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   71.493 Buy
20-DMA   142.04 Buy
50-DMA   138.95 Buy
100-DMA   135.17 Buy
200-DMA   129.19 Buy
STOCH(9,6)   73.647 Buy
MACD(12,26,9)   1.987 Sell

AAFX TRADING
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