AAFX TRADING

Daily Market Lookup

  • The British pound continued to slump in early European trading Monday, falling to a record low against the soaring U.S. dollar as traders doubted the sustainability of the new U.K. government's economic plan. This weakness followed hefty selling on Friday after new U.K. finance minister Kwasi Kwarteng unveiled the country’s biggest package of tax cuts in 50 years, which would likely have to be funded by the biggest increase in borrowing since 1972 even with the country facing slowing growth and twin deficits. Kwarteng added in an interview on Sunday that he wants to keep cutting taxes as part of an effort to boost U.K. economic growth, telling the BBC there was "more to come". Traders are now pricing in a more robust response from the Bank of England after its hike of just 50 basis points last week, with the market now pricing in interest rate increases of at least another 135 basis points by November. Still, it's debatable how much this will do to support the beleaguered currency. Sterling’s weakness helped the safe-haven U.S. dollar climb to a new two-decade peak against a basket of major peers. The escalation in the Ukraine war, with Russia holding widely-criticized votes aimed at annexing territory it has taken by force, has hit the single currency, along with the uncertainty surrounding the weekend election in Italy which is set to propel a right-wing alliance to power in the Eurozone’s third-largest economy. Data showed that Japanese business activity grew slightly in September, but the outlook for the Japanese economy remained pressured by high inflation and a weakening yen. Data on Friday also showed that UK business activity shrank in September for a second consecutive month. The Bank of England, which recently hiked interest rates, also warned that the UK economy may already be in recession. High inflation has been the biggest headwind for UK and Eurozone economies this year, as both business and consumer spending wilted under increased price pressures. Weakness in the pound and the euro saw the dollar index touch a new 20-year high on Monday, as the greenback continued to benefit from safe-haven buying. Rising U.S. interest rates have greatly boosted the reserve currency this year, and are likely to keep it elevated in the near term.
  • Gold and copper prices retreated further on Monday as the dollar notched a new 20-year high amid growing fears of rising interest rates and a potential economic recession. Metal markets plummeted last week after the U.S. Federal Reserve hiked interest rates and warned of potential economic pain as it looks to combat runaway inflation. Economic indicators from the Eurozone and the UK also showed a pronounced contraction in business activity, ramping up fears of a recession and denting the demand outlook for metal markets. The dollar index fell slightly on Monday after briefly hitting a new 20-year high. Strength in the greenback is expected to persist as the Fed keeps raising interest rates. Gold prices have suffered heavy losses this year as the prospect of rising yields pushed traders into the dollar and Treasuries. Traders are now positioning for more dips in bullion prices, given that gold fell below two key support levels last week- $1,700 and $1,650. Among industrial metals, copper futures sank 0.4% on Monday to $3.3575 a pound, trading near two-month lows. Prices of the red metal tumbled nearly 5% last week after a swathe of weak economic readings raised concerns over a slowdown in global economic growth. Copper prices have been hit particularly hard this year by an economic slowdown in major importer China. Slowing industrial activity in the U.S. and Europe has only exacerbated recent losses. Still, a potential supply crunch, stemming from a strike at Escondida, the world’s largest copper mine, may potentially benefit prices in the long term.
  • Oil prices fell for a second day on Monday on fears of lower fuel demand from an expected global recession sparked by rising worldwide interest rates and as a surging U.S. dollar limits the ability of non-dollar consumers to purchase crude. The dollar index that measures the greenback against a basket of major currencies climbed to a 20-year high on Monday. A stronger greenback tends to curtail demand for dollar-denominated oil since buyers using other currencies must spend more to buy crude. Central banks in numerous oil-consuming countries, including the United States, the world's biggest crude user, have raised interest rates to fight surging inflation which has led to concerns the tightening could trigger an economic slowdown. The disruptions in the oil market from the Russia-Ukraine war, with European Union sanctions banning Russian crude set to start in December, has lent some support to prices. The chief executive officer of energy trader Vitol, Russell Hardy, said that fuel shipments are being affected with Russian oil products expected to flow to Asia and the Middle East while supplies from their go to Europe. Additionally, Hardy told an oil conference in Singapore that more than a million barrels per day (bpd) of U.S. crude is expected to go to Europe to fill the gap in Russian supplies. The head of Colombian state energy company Ecopetrol said at the same conference that it has been selling more oil to Europe, replacing Russian supplies, while it sees growing competition for market share in Asia. Attention is turning to what the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, together called OPEC+, may do when they meet on Oct. 5, after agreeing to cut output modestly at their last meeting. But, since OPEC+ is producing well below its targeted output, any announced cut may not have much impact on supply. Data last week showed OPEC+ missed its target by 3.58 million bpd in August, a bigger shortfall than in July.

 

 
Intraday RESISTANCE LEVELS
26th September 2022 R1 R2 R3
GOLD-XAU 1,640-1,651 1,660 1,679-1,690
Silver-XAG 18.90-19.80 20.20-20.70 21.50-21.90
Crude Oil 77.90-79.00 80.90-81.50 82.10-82.90
EURO/USD 0.9740-0.9800 0.9860-0.9910 0.9995-1.0090
GBP/USD 1.0800-1.0910 1.0995-1.1100 1.1150-1.1210
USD/JPY 144.60 145.30-146.00 146.90-147.50

Intraday SUPPORTS LEVELS
26th September 2022 S1 S2 S3
GOLD-XAU 1,631-1,620 1,610 1,601-1,590
Silver-XAG 18.40-17.80 17.40 17.00-16.50
Crude Oil 77.00-76.20 74.90-73.80 73.00-72.90
EURO/USD 0.9650-0.9580 0.9550 0.9440-0.9390
GBP/USD 1.0710-1.0640 1.0590 1.0500-1.0410
USD/JPY 143.10-142.00 141.40-140.70 139.95-139.00

Intra-Day Strategy (26th 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$1675.75/oz and low of $1639.70/oz. Gold is down by 1.662% at US$1643.35/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 1641-1679 keeping stop loss closing above 1690, targeting 1631-1620 and 1610-1600-1590. Buy in between 1626-1590 with risk below 1590, targeting 1690-1711-1732 and 1740-1751-1760.

 
Intraday Support Levels
S1     1,631-1,620
S2     1,610
S3     1,601-1,590
Intraday Resistance Levels
R1     1,640-1,651
R2     1,660
R3     1,679-1,690

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 Friday made its intraday high of US$19.70/oz and low of US19.76/oz settled down by 3.539% at US$19.85/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 18.40-16.00, targeting 18.90-19.80 and 20.45-20.70-21.45 with stop loss should be placed on the breakage below 16.00. 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     18.40-17.80
S2     17.40
S3     17.00-16.50

Intraday  Resistance Levels
R1     18.90-19.80
R2     20.20-20.70
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$83.76/bbl, an intraday low of US$77.97/bbl, and settled down by 5.23% to close at US$79.11/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 77.90-84.00 with stop loss at 84.00; targeting 77.00-76.20-74.90 and 73.80-73.00-72.90. Buy above 77.00-72.10 with risk daily closing below 72.00; targeting 77.90-79.00-80.90 and 81.50-82.90-84.00.

 
Intraday Support Levels
S1     77.00-76.20
S2     74.90-73.80
S3     73.00-72.90

Intraday Resistance Levels
R1     77.90-79.00
R2     80.90-81.50
R3     82.10-82.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   32.548 Sell
20-DMA   86.96 Sell
50-DMA   89.74 Sell
100-DMA   93.71 Sell
200-DMA   92.57 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$0.9667/EUR, a high of US$0.9851/EUR, and settled the day down by 1.428% to close at US$0.9694/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 0.9740-1.0430, targeting 0.9650-0.9590-0.9550 and 0.9440-0.9390 with stop-loss at daily closing above 1.0430. Buy above 0.9650-0.9390 with risk below 0.9390, targeting 0.9740-0.9800-0.9860 and 0.9910-0.9995-1.0090.

 
Intraday Support Levels
S1     0.9650-0.9580
S2     0.9550
S3     0.9440-0.9390

Intraday  Resistance Levels
R1     0.9740-0.9800
R2     0.9860-0.9910
R3     0.9995-1.0090

TECHNICAL INDICATORS
Name   Value Action
14DRSI   28.295 Buy
20-DMA   0.9930 Sell
50-DMA   1.0061 Sell
100-DMA   1.0262 Sell
200-DMA   1.0593 Sell
STOCH(5,3)   16.50 Buy
MACD(12,26,9)   -0.0025 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.10834/GBP, a high of US$1.1273/GBP, and settled the day down 3.61% to close at US$1.0848/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 1.0710-1.0410 with a target of 1.0800-1.0910-1.0995 and 1.1100-1.1150-1.1250 with stop loss closing below 1.1250. Sell in between 1.0800-1.1210 with targets at 1.0710-1.0640-1.0590 and 1.0500-1.0410 with stop loss should be 1.2630.

 
Intraday Support Levels
S1     1.0710-1.0640
S2     1.0590
S3     1.0500-1.0410

Intraday Resistance Levels
R1     1.0800-1.0910
R2     1.0995-1.1100
R3     1.1150-1.1210

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 Friday made an intra‐day low of JPY141.76/USD and made an intraday high of JPY143.45/USD and settled the day up by 0.696% at JPY143.33/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 143.90-148.90 with risk above 148.90 targeting 142.00-141.40-140.70 and 139.95-139.00. Long positions above 143.00-139.70 with targets of 143.10-144.60-145.30 and 146.70-147.50 with stops below 139.00.

 
Intraday Support Levels
S1     143.10-142.00
S2     141.40-140.70
S3     139.95-139.00

INTRADAY RESISTANCE LEVELS
R1     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
AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING