AAFX TRADING

Daily Market Lookup

  • The U.S. dollar resumed its seemingly relentless march higher in early European trading Thursday, while sterling slumped as the relief rally attached to the Bank of England’s intervention into the bond market dissipated. The Bank of England announced an emergency bond-buying on Wednesday, attempting to shore up the gilt market which had slumped, along with the pound, after the new U.K. government announced substantial tax cuts, likely funding by hefty borrowing. This will put pressure on the BoE to announce a substantial interest rate hike at its next meeting in early November, if it continues to rule out an emergency hike, in order to support the beleaguered pound. Appearances from Bank of England officials David Ramsden, Silvana Tenreyro, and Huw Pill later on Thursday will be closely watched. The single currency is also weighed by the recent escalation of the Eurozone's energy crisis, with Sweden's coast guard announcing it has discovered a fourth gas leak on the damaged Nord Stream pipelines. The European Union suspects sabotage was behind the leaks on the pipelines carrying gas from Russia to Europe and has promised a "robust" response to any intentional disruption of its energy infrastructure.
  • After tumbling earlier, sterling rallied against the dollar on Wednesday following the Bank of England's (BOE) purchase of UK government bonds, letting some air out of the greenback's progress broadly after it had touched a fresh 20-year high. The BoE said it received 2.587 billion pounds' ($2.78 billion) worth of offers in its first bond buyback operation aimed at stabilizing the market, and had accepted only 1.025 billion pounds' worth. The central bank had committed to buying as many long-dated government bonds, know as gilts, as needed between Wednesday and Oct. 14. As markets tried to digest what the move meant for the pound, the currency whipsawed during Wednesday's session, jumping as high as $1.09165 and falling as low as $1.05390. It was last up 1.51% at $1.08921. The BoE intervention was driving currency trading broadly, according to Erik Nelson, macro strategist at Wells Fargo. But the relief for sterling may be temporary as the UK still has to deal with macro trends such as high inflation. Currency investors have also been monitoring Russia's war against Ukraine and energy uncertainty in Europe after leaks on Nord Stream pipelines between Russia and Europe spewed gas into the Baltic Sea, said Brad Bechtel, global head of FX at Jefferies in New York. NATO Secretary-General Jens Stoltenberg and others have attributed the leaks to acts of sabotage.
  • Oil prices fell on Thursday after gaining more than $3 in the prior session, with a strong dollar capping oil demand and concerns over the faltering global economic outlook clouding market sentiment. Both benchmarks had rebounded in the prior two sessions, after reaching nine-month lows this week, after a temporary dive in the dollar index and a larger-than-expected drawdown of U.S. fuel inventory raised hopes of a consumer demand recovery. However, the dollar index trended upward again on Thursday, dampening investor risk appetite and stoking fears of a global recession. The Bank of England said it is committed to buying as many long-dated government bonds, know as gilts, as needed between Wednesday and Oct. 14 to stabilise its currency after the British government's budgetary plans announced last week caused the sterling to tumble. Goldman Sachs (NYSE:GS) cut its 2023 oil price forecast on Tuesday, citing expectations of weaker demand and a stronger U.S. dollar, but said global supply disappointments reinforced its long-term bullish outlook. In China, the world's biggest crude oil importer, travel during the upcoming week-long national holiday is set to hit the lowest level in years as Beijing's persistent zero-COVID rules prompt people to stay at home and economic woes dampen spending. Citi economists have lowered their China GDP forecast from 5% year-on-year growth to 4.6% for the fourth quarter of 2022. On the other side of the world, the European Union proposed a new round of sanctions against Russia over its invasion of Ukraine, including tighter trade restrictions, more individual blacklistings and an oil price cap for third countries. But the bloc's 27 member countries will need to overcome their own differences to implement them.

 

 
Intraday RESISTANCE LEVELS
29th September 2022 R1 R2 R3
GOLD-XAU 1,651-1,660 1,679 1,690-1,700
Silver-XAG 18.90-19.80 20.20-20.70 21.50-21.90
Crude Oil 80.90-81.50 82.10 83.55-84.60
EURO/USD 0.9740-0.9800 0.9860 0.9910-0.9995
GBP/USD 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
29th September 2022 S1 S2 S3
GOLD-XAU 1,640-1,631 1,620-1,610 1,601-1,590
Silver-XAG 18.00-17.80 17.40 17.00-16.50
Crude Oil 79.00-77.90 76.20 74.90-73.80
EURO/USD 0.9610-0.9550 0.9440 0.9390-0.9300
GBP/USD 1.0710-1.0640 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 (29th 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$1662.66/oz and low of $1614.83/oz. Gold is down by 1.895% at US$1659.86/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 1651-1690 keeping stop loss closing above 1690, targeting 1640-1631-1620 and 1610-1600-1590. Buy in between 1631-1590 with risk below 1590, targeting 1651-1660-1679 and 1690-1711-1732.

 
Intraday Support Levels
S1     1,640-1,631
S2     1,620-1,610
S3     1,601-1,590
Intraday Resistance Levels
R1     1,651-1,660
R2     1,679
R3     1,690-1,700

Technical Indicators

Name   Value Action
14DRSI  

37.139

Buy
20-DMA   167647 Sell
50-DMA  

1717.19

Sell
100-DMA   1757.86 Sell
200-DMA   1791.33 Sell
STOCH(5,3)   40.941 Sell
MACD(12,26,9)   -28.501 Buy

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$18.96/oz and low of US17.95/oz settled up by 2.06% at US$18.89/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 Wednesday made an intra‐day high of US$81.91/bbl, an intraday low of US$76.22/bbl, and settled up by 4.68% to close at US$81.44/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 80.90-84.00 with stop loss at 84.00; targeting 79.00-77.90-77.00 and 76.20-74.90-73.00. Buy above 79.00-72.10 with risk daily closing below 72.00; targeting 80.90 and 81.50-82.90-84.00.

 
Intraday Support Levels
S1     79.00-77.90
S2     76.20
S3     74.90-73.80

Intraday Resistance Levels
R1     80.90-81.50
R2     82.10
R3     83.55-84.60

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 WEDNESDAY made an intraday low of US$0.9535/EUR, a high of US$0.9750/EUR, and settled the day up by 1.455% to close at US$0.9732/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 0.9550 and 0.9440-0.9390 with stop-loss at daily closing above 1.0430. Buy above 0.9610-0.9390 with risk below 0.9390, targeting 0.9620-0.9740-0.9800 and 0.9860-0.9910-0.9995.

 
Intraday Support Levels
S1     0.9610-0.9550
S2     0.9440
S3     0.9390-0.9300

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   34.150 Buy
20-DMA   0.9854 Sell
50-DMA   1.0013 Sell
100-DMA   1.0225 Sell
200-DMA   1.0565 Sell
STOCH(5,3)   31.610 Buy
MACD(12,26,9)   -0.0025 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.0538/GBP, a high of US$1.0915/GBP, and settled the day up 0.458% to close at US$1.0884/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     1.0590-1.0500
S3     1.0410-1.0335

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

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 JPY143.90/USD and made an intraday high of JPY144.90/USD and settled the day up by 0.384% at JPY144.17/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 144.70-148.90 with risk above 148.90 targeting 143.10-142.00-141.40-140.70 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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