AAFX TRADING

Daily Market Lookup

  • Nervous financial markets propelled the safe-haven dollar to a two-decade peak on Wednesday as rising global interest rates fed recession worries, while sterling drifted lower after the latest warnings about Britain's radical tax cut plans. The Federal Reserve has led the global fight against surging inflation, turning even more aggressive recently by signalling further big rate increases on top of super-sized moves in the past few months. That message was reinforced on Tuesday by Chicago Fed President Charles Evans, St. Louis Fed President James Bullard and Minneapolis Federal Reserve Bank President Neel Kashkari, with Evans saying that the central bank will need to raise interest rates to a range between 4.50% and 4.75%. The rising borrowing costs have intensified fears of a global recession, adding to the surge in bond yields worldwide. But the dollar's gains against the pound have also been driven by British domestic factors after the British government, last week announced a plan to slash taxes and ramp up borrowing. Bank of England Chief Economist Huw Pill said on Tuesday that the central bank is likely to deliver a "significant policy response" in response to finance minister Kwasi Kwarteng's huge tax cut plans. But he added that the central bank wants to wait until its next scheduled meeting in November before making its move, quashing market speculations of a potential inter-meeting interest rate hike. There are signs policy makers are starting to get concerned. Reuters reported Tuesday that Chinese monetary authorities are asking local banks to revive a yuan fixing tool it abandoned two years ago as they seek to steer and defend the rapidly weakening currency.
  • The safe-haven U.S. dollar soared to a new 20-year high in early European trading Wednesday, as more hawkish Fed speak and rising Treasury yields spurred fresh recession fears. The Federal Reserve has made it clear that its fight against surging inflation is currently its most important mission, and it would be continuing with big interest rate increases even at the potential expense of sending the country’s economy into recession. That message was reinforced overnight by Chicago Fed President Charles Evans, St. Louis Fed President James Bullard and Minneapolis Federal Reserve Bank President Neel Kashkari, with Bullard saying that rates would need to stay at a higher rate for “some time to make sure we’ve got the inflation problem under control. Elsewhere, GBP/USD fell 0.8% to 1.0649, remaining near all-time lows as the repercussions following the new U.K. government’s radical tax cut plans continue to be felt within the markets. The International Monetary Fund openly criticized the new economic strategy on Tuesday, saying “given elevated inflation pressures in many countries, including the U.K., we do not recommend large and untargeted fiscal packages at this juncture, as it is important that fiscal policy does not work at cross purposes to monetary policy." The slump in sterling prompted Bank of England Chief Economist Huw Pill, on Tuesday, to state that the central bank was likely to deliver a "significant" rate increase when it meets next in November. Russian gas monopoly Gazprom (MCX:GAZP) said late Tuesday that it may seek to add the Ukrainian gas pipeline operator Naftogaz Ukrainy to Russia's list of sanctioned entities, likely cutting off almost all of its remaining supplies to the EU. This followed accusations of sabotage directed at Moscow after major leaks into the Baltic Sea from two Russian gas pipelines at the center of an energy standoff. Consumer sentiment in Germany is expected to slump to a fresh record low in October, with the GfK forecasting Wednesday that its consumer confidence index will fall to -42.5 next month, dropping from a downwardly revised reading of 36.8 in September.
  • Oil prices fell more than 1% on Wednesday, pressured by a strengthening dollar and crude storage builds that offset support from U.S. production cuts caused by Hurricane Ian. The dollar hit a fresh two-decade peak against a basket of currencies on Wednesday as rising global interest rates fed recession concerns. A strong dollar reduces demand for oil by making it more expensive for buyers using other currencies. Asian share markets sank as surging borrowing costs stoked fears of a global recession, spooking investors into the safe-haven dollar. U.S. crude oil stocks rose by about 4.2 million barrels for the week ended Sept. 23, while gasoline inventories fell about 1 million barrels, according to market sources on Tuesday, citing figures from industry group the American Petroleum Institute. Distillate stocks rose by about 438,000 barrels, according to the sources, who spoke on condition of anonymity. The report comes ahead of official Energy Information Administration data due on Wednesday at 4:30 p.m. EDT. Goldman Sachs cut its 2023 oil price forecast on Tuesday, due to expectations of weaker demand and a stronger U.S. dollar, but said global supply disappointments only reinforced its long-term bullish outlook. Producers began returning workers to offshore oil platforms after shutting in output ahead of Hurricane Ian, which entered the U.S. Gulf of Mexico on Tuesday and is forecast to become a dangerous Category 4 storm over the warm waters of the Gulf. About 190,000 barrels per day of oil production, or 11% of the Gulf's total were shut-in, according to offshore regulator the Bureau of Safety and Environmental Enforcement (BSEE). Producers lost 184 million cubic feet of natural gas, or nearly 9% of daily output. Personnel were evacuated from 14 production platforms and rigs, the BSEE said. Ian is the first hurricane this year to disrupt oil and gas production in the U.S. Gulf of Mexico, which produces about 15% of the United States' crude oil and 5% of its dry natural gas.

 

 
Intraday RESISTANCE LEVELS
28th September 2022 R1 R2 R3
GOLD-XAU 1,631-1,640 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
EURO/USD 0.9610-0.9740 0.9800-0.9860 0.9910-0.9995
GBP/USD 1.0710-1.0800 1.0910-1.0995 1.1100-1.1150
USD/JPY 144.70-145.30 146.00 146.90 147.50

Intraday SUPPORTS LEVELS
28th September 2022 S1 S2 S3
GOLD-XAU 1,620-1,610 1,601 1,590-1,582
Silver-XAG 18.00-17.80 17.40 17.00-16.50
Crude Oil 76.20-74.90 73.80 72.90-72.00
EURO/USD 0.9550 0.9440-0.9390 0.9300
GBP/USD 1.0640-1.0590 1.0500 1.0410-1.0335
USD/JPY 143.10-142.00 141.40-140.70 139.95-139.00

Intra-Day Strategy (28th 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$1642.38/oz and low of $1621.98/oz. Gold is down by 1.66% at US$1629.15/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 1631-1679 keeping stop loss closing above 1690, targeting 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     1,620-1,610
S2     1,601
S3     1,590-1,582
Intraday Resistance Levels
R1     1,631-1,640
R2     1,651-1,660
R3     1,679-1,690

Technical Indicators

Name   Value Action
14DRSI  

28.140

Buy
20-DMA   1676.53 Sell
50-DMA  

1717.19

Sell
100-DMA   1757.86 Sell
200-DMA   1791.33 Sell
STOCH(5,3)   5.941 Sell
MACD(12,26,9)   -28.501 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$18.77/oz and low of US18.31/oz settled up by 0.245% at US$18.38/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 18.00-16.00, 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 18.90-21.50 with stop loss above 21.50; targeting 18.00-17.70 and 17.50-16.90-16.40.

 
Intraday  Support Levels
S1     18.00-17.80
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   38.965 Buy
20-DMA   18.94 Buy
50-DMA   19.31 Sell
100-DMA   20.14 Sell
200-DMA   21.35 Sell
STOCH(5,3)   2.734 Sell
MACD(12,26,9)   -0.152 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$79.26/bbl, an intraday low of US$76.18/bbl, and settled up by 1.905% to close at US$77.69/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     76.20-74.90
S2     73.80
S3     72.90-72.00

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   33.595 Sell
20-DMA   86.96 Sell
50-DMA   89.74 Sell
100-DMA   93.71 Sell
200-DMA   92.57 Sell
STOCH(5,3)   8.424 Sell
MACD(12,26,9)   -1.971 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$0.9568/EUR, a high of US$0.9670/EUR, and settled the day down by 0.166% to close at US$0.9592/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 0.9650-1.0430, targeting 0.9550 and 0.9440-0.9390 with stop-loss at daily closing above 1.0430. Buy above 0.9550-0.9390 with risk below 0.9390, targeting 0.9620-0.9740-0.9800 and 0.9860-0.9910-0.9995.

 
Intraday Support Levels
S1     0.9550
S2     0.9440-0.9390
S3     0.9300

Intraday  Resistance Levels
R1     0.9610-0.9740
R2     0.9800-0.9860
R3     0.9910-0.9995

TECHNICAL INDICATORS
Name   Value Action
14DRSI   23.878 Buy
20-DMA   0.9860 Sell
50-DMA   1.0021 Sell
100-DMA   1.0233 Sell
200-DMA   1.0572 Sell
STOCH(5,3)   9.610 Buy
MACD(12,26,9)   -0.0025 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.0649/GBP, a high of US$1.0838/GBP, and settled the day up 0.458% to close at US$1.0729/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     1.0640-1.0590
S2     1.0500
S3     1.0410-1.0335

Intraday Resistance Levels
R1     1.0710-1.0800
R2     1.0910-1.0995
R3     1.1100-1.1150

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 Tuesday made an intra‐day low of JPY144.05/USD and made an intraday high of JPY144.90/USD and settled the day up by 0.006% at JPY144.74/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     144.70-145.30
R2     146.00 146.90
R3     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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