AAFX TRADING

Daily Market Lookup

  • The British pound edged higher Tuesday, rebounding to a degree after falling to a record low against the U.S. dollar as traders paused for breath after a couple of volatile sessions. GBP/USD rose 0.9% to 1.0783, bouncing after falling to an all-time low of 1.0327 on Monday, helped by Bank of England Governor Andrew Bailey attempting to soothe markets by stating that the bank will raise rates as much as necessary at its next meeting. Sterling’s weakness followed new U.K. finance minister Kwasi Kwarteng unveiling on Friday the country’s biggest package of tax cuts in 50 years, likely funded by a massive increase in borrowing even with the country facing slowing growth and twin deficits. That said, it’s debatable how much higher the pound can go from here, with Bailey effectively ruling out an emergency rate hike for now. Additionally, the Federal Reserve doesn’t look like pulling back from its aggressive stance on combating inflation any time soon. Cleveland Fed President Loretta Mester said on Monday the U.S. central bank should lift rates higher and keep policy restrictive for some time, adding if there is an error to be made, better that the Fed do too much than to do too little. There are a number of speeches by central bank officials this week, with the Fed's Charles Evans speaking later this session. Also, expectations are for a small lift to 104.5 from 103.2 in the U.S. Conference Board consumer confidence later in the day, while durable goods orders are set to fall 0.4% on the month in August. EUR/USD rose 0.5% to 0.9650, bouncing from Monday’s 20-year low, helped by European Central Bank president Christine Lagarde stating that the central bank is expected to raise interest rates further over its "next several meetings" in a bid to tamp down soaring inflation.
  • Gold prices rose slightly from two-year lows on Tuesday as a rally in the dollar paused, while a recovery in copper was cut short by data showing more weakness in Chinese industrial activity. Both instruments recovered from their lowest levels since early 2020, as pressure from the dollar appeared to have eased. A rout in most other asset classes and rising interest rates boosted the greenback’s safe haven demand, helping the currency largely overtake gold as a preferred safe haven buy this year. Bullion prices on the other hand have plummeted from highs hit during the Russian invasion of Ukraine, as rising interest rates across the globe dented the metal’s appeal. With gold prices falling below two key support levels in recent weeks - $1,700 and $1,650 - markets broadly expect the yellow metal to sink below $1,600 in the coming days. There appear to be few factors providing an upside for gold in the near term. Spot gold is down more than 10% this year. Focus is now on an address by Federal Reserve Chairman Jerome Powell on Wednesday for more cues on U.S. monetary policy. Powell had struck an extremely hawkish tone during the Fed’s meeting last week, Among industrial metals, copper prices trimmed early gains on Tuesday after data showed Chinese industrial profits fell for a second consecutive month in August. Fears that rising interest rates will dent global economic activity have weighed heavily on copper prices this year, as has a pronounced slowdown in industrial production. Signs of prolonged economic weakness in China- the world’s largest copper importer- also weighed heavily on prices this year, as investors positioned for a demand crunch.
  • Oil rose more than 1% on Tuesday from a nine-month low a day earlier, supported by supply curbs in the U.S. Gulf of Mexico ahead of Hurricane Ian and a slight softening in the U.S. dollar. Analyst expectations that the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, may take action to stem the drop in prices by cutting supply also lent support. OPEC+ meets to set policy on Oct. 5. Crude soared in early 2022, with Brent coming close to its all-time high of $147 in March after Russia invaded Ukraine, adding to supply concerns. Worries about recession, high interest rates and dollar strength have since weighed. A lull in the strength of the U.S. dollar, which earlier hit a 20-year high, provided some support. A strong dollar makes crude more expensive for buyer using other currencies and tends to weigh on risk assets. Supply cuts were back in focus on Tuesday lending some support. BP (NYSE:BP) and Chevron (NYSE:CVX) said on Monday they shut production at offshore platforms in the Gulf of Mexico as Hurricane Ian approached the region. The price drop has raised speculation that OPEC+ could intervene. Iraq's oil minister on Monday said the group was monitoring prices and didn't want a sharp increase or a collapse. In focus also on Tuesday will be the latest U.S. inventory reports, which analysts expect will show a 300,000-barrel increase in crude stocks. The American Petroleum Institute's report is out at 2030 GMT.

 

 
Intraday RESISTANCE LEVELS
27th 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
27th 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 0.9610-0.9580 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 (27th 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$1649.72/oz and low of $1621.12/oz. Gold is down by 1.375% at US$1622.37/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 Monday made its intraday high of US$19.02/oz and low of US18.32/oz settled down by 2.75% at US$18.34/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 Monday made an intra‐day high of US$80.09/bbl, an intraday low of US$76.06/bbl, and settled down by 3.789% to close at US$76.11/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 Monday made an intraday low of US$0.9550/EUR, a high of US$0.9708/EUR, and settled the day down by 0.615% to close at US$0.9608/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     0.9610-0.9580
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 Buy

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
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