AAFX TRADING

Daily Market Lookup

  • The Japanese yen soared across the board on Thursday after monetary authorities intervened in the foreign exchange market to boost the battered currency for the first time since 1998, although analysts said Japan may struggle to keep the yen strong. North American traders cautiously pushed the dollar higher against the yen after Japan stepped in, but for now, few are challenging Japan's action. Confirmation of the intervention came just hours after the BOJ decided to maintain low interest rates to support the country's fragile economic recovery. BOJ Governor Haruhiko Kuroda told reporters the central bank could hold off on hiking rates or changing its dovish policy guidance for years. In contrast, central banks around the world, most notably the Federal Reserve, are raising rates aggressively and the policy divergence has weighed on the yen. However, analysts said Japan can't keep propping up the currency on a sustained basis. In a busy day for markets, the pound pared the small advance it had made in London trading after the Bank of England raised interest rates by 50 basis points. The hike was in line with expectations, although markets had been pricing in a small chance of a larger 75 bp move. 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%-3.25%, as widely expected. The dollar was already supported by demand for safe-haven assets after Russian President Vladimir Putin announced on Wednesday he would call up reservists to fight in Ukraine. Separately, the Swiss franc tumbled after Switzerland's central bank raised rates by 75 bps, when some had talked up the possibility of a full percentage point move. The Norwegian crown eased against the euro and dollar after the country's central bank hiked interest rates by an expected 50 bps, and signalled a more gradual approach to tightening ahead. The intervention helped the yen recover from the double whammy of a hawkish Fed as the BoJ maintained its ultra-loose monetary policy despite economic pressure from rising inflation and slowing growth. The currency was set to rise 0.6% this week after five straight weeks of losses. Still, the outlook for the yen remains dim, given that the BoJ is now the only central bank in the world to maintain negative interest rates, putting it at odds with rising lending rates across the globe. This has severely pressured the yen this year, and also caused considerable weakness in the Japanese economy.
  • Gold prices steadied on Friday, and were set to end the week largely unchanged as selling pressure from a hawkish Federal Reserve appeared to have eased. Bullion prices showed surprising resilience this week after the Fed hiked rates and struck a more hawkish tone than many were expecting, with U.S. interest rates now set to end the year well above 4%, But prices of the yellow metal were still trading well below $1,700 - a key support level they lost this week. This also spurred some bargain hunting for gold. The near-term outlook for gold is still constrained by the prospect of rising U.S. interest rates, which boosted the dollar and dragged bullion prices off record highs this year. But expectations of more economic ructions from the Fed’s hawkish moves have raised expectations that the yellow metal may eventually regain its safe haven status. Traders are also pricing in the possibility that the Fed will begin cutting rates in late 2023 to prevent broader economic shocks from high rates. Prices of the red metal were set to end the week 1.4% lower, down for a second consecutive week as traders feared that rising interest rates across the globe would weigh on industrial activity. Apart from the Fed, the Bank of England also hiked rates this week to combat rising inflation, as did central banks in Europe and Asia.
  • Oil prices fell on Friday amid recession fears and a stronger U.S. dollar, though losses were capped by supply concerns after Moscow's new mobilization campaign in its war with Ukraine and an apparent deadlock in talks on reviving the Iran nuclear deal. "However, a sharp fall in the U.S. SPR and drawdown in inventories may still keep oil prices supported at some point as there is still an inevitable undersupply issues in the physical markets, while Iran's nuclear deal is in stalemate," she said, referring to crude oil in the U.S. Strategic Petroleum Reserve which dropped last week to its lowest since 1984.
  • Following the U.S. Federal Reserve's hefty 75 basis point increase on Wednesday for a third time, central banks around the world also followed suit in hiking interest rates, raising the risk of economic slowdowns. A senior U.S. State Department official said that efforts to revive the 2015 Iran nuclear deal have stalled due to Tehran's insistence on the closure of the U.N. nuclear watchdog's investigations, easing expectations of a resurgence of Iranian crude oil.

 

 
Intraday RESISTANCE LEVELS
23rd 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 143.10-144.60 145.30-146.00 146.90-147.50

Intraday SUPPORTS LEVELS
23rd 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 142.00-141.40 140.70 139.95-139.00

Intra-Day Strategy (23rd 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 Thursday made its intraday high of US$1684.82/oz and low of $1655.65/oz. Gold is down by 0.150% at US$1671.16/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 Thursday made its intraday high of US$19.85/oz and low of US19.23/oz settled up by 1.484% at US$19.62/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 Thursday made an intra‐day high of US$85.82/bbl, an intraday low of US$82.26/bbl, and settled up by 0.759% to close at US$82.35/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 Thursday made an intraday low of US$0.9954/EUR, a high of US$0.9907/EUR, and settled the day down by 0.0132% to close at US$0.9834/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 Thursday made an intra‐day low of US$1.1211/GBP, a high of US$1.1363/GBP, and settled the day down 0.070% to close at US$1.1254/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 Thursday made an intra‐day low of JPY140.34/USD and made an intraday high of JPY145.89/USD and settled the day down by 1.177% at JPY142.34/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 143.10-148.90 with risk above 148.90 targeting 142.00-141.40-140.70 and 139.95-139.00. Long positions above 142.00-139.70 with targets of 143.10-144.60-145.30 and 146.70-147.50 with stops below 139.00.

 
Intraday Support Levels
S1     142.00-141.40
S2     140.70
S3     139.95-139.00

INTRADAY RESISTANCE LEVELS
R1     143.10-144.60
R2     145.30-146.00
R3     146.90-147.50

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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