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. The British currency jumped the most since mid-June as a result, but this bounce hasn’t lasted long, with GBP/USD dropping 0.9% to 1.0787 on Thursday. 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.
  • Sterling rose sharply in volatile trading on Thursday, rallying from record lows hit on Monday, after the Bank of England conducted a second day of bond buying to stabilize financial markets. The recovery in the British currency was due in part to the BoE's action. On Thursday, the BoE bought 1.415 billion pounds ($1.55 billion) of British government bonds with maturities of more than 20 years, the second day of a multi-billion pound program designed to stabilize the market. But he noted that sterling gains as a result of the BoE's moves are not sustainable. Anderson added that he will be a seller of the pound at $1.10, with the likelihood of the currency going back down to $1.05. Sterling initially fell on Thursday as Prime Minister Liz Truss defended her government tax-cutting budget. Data showed euro zone economic sentiment fell sharply and by more than expected in September as confidence dropped among companies and consumers, who are also downbeat about price trends in the coming months. The big focus, however, was German inflation, which jumped to 10.9% this month, far beyond expectations for a reading of 10%. That suggests the figure for the wider 19-country euro zone, due on Friday, is also likely to exceed the predicted 9.6%, reinforcing the case for another 75 basis-point increase at the next European Central Bank policy meeting. That said, some analysts think the ECB's potential action is likely just a short-term boost for the euro. Japan intervened last week to shore up a struggling yen. Finance Minister Shunichi Suzuki said on Thursday Japan's recent currency intervention was conducted to rectify market distortion caused by speculative currency moves. He signalled his readiness to intervene again if speculation persists. Elsewhere, China's offshore yuan bounced about 1% to 7.0894 per dollar after Reuters reported state banks have been told to stock up for yuan intervention. The risk-sensitive Australian dollar sank 0.4% to US$0.6494. A new measure of consumer prices showed annual inflation eased a bit from August to July, offering hope that cost pressures might be close to a peak.
  • Oil prices were little changed during Asian trade on Friday, though headed for their first weekly gain in five weeks, underpinned by a weaker U.S. dollar and the possibility that OPEC+ may agree to cut crude output when it meets on Oct. 5. Both Brent and WTI are on track to rise by about 3% for the week, their first weekly rise since August, after hitting nine-month lows earlier in the week. Oil prices were shored up by a drop in the dollar from 20-year highs earlier in the week. A weaker greenback makes dollar-denominated oil cheaper for buyers holding other currencies, improving demand for the commodity. For the month of September, Brent is poised to drop 8.3%, down for a fourth month. For the third quarter, Brent will likely have plunged 23%, its first quarterly loss since the fourth quarter of 2021. Analysts said the market appeared to have found a floor, with supply set to tighten as the European Union will ban Russian oil imports from Dec. 5. However, the key unknown is how much demand will drop as global growth slows in the face of aggressive interest rate hikes. Leading members of the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, together called OPEC+, have begun discussing an output cut ahead of their meeting on Wednesday, three people told Reuters. Russia could suggest a cut of up to 1 million barrels per day, a person familiar with Russian thinking on the matter said earlier this week.

 

 
Intraday RESISTANCE LEVELS
30th September 2022 R1 R2 R3
GOLD-XAU 1,670-1,679 1,690-1,700 1,714-1,731
Silver-XAG 19.80–20.20 20.70 21.50-21.90
Crude Oil 80.90-81.50 82.10 83.55-84.60
EURO/USD 0.9800-0.9860 0.9910 0.9995-1.0105
GBP/USD 1.1150-1.1260 1.1360 1.1390-1.1450
USD/JPY 144.70-145.30 146.00 146.90 147.50

Intraday SUPPORTS LEVELS
30th September 2022 S1 S2 S3
GOLD-XAU 1,660-1,651 1,640-1,631 1,620-1,610
Silver-XAG 18.90-18.00 17.80 17.40-17.00
Crude Oil 79.00-77.90 76.20 74.90-73.80
EURO/USD 0.9740-0.9610 0.9550-0.9440 0.9390-0.9300
GBP/USD 1.1100-1.0995 1.0910-1.0800 1.0710-1.0640
USD/JPY 143.10-142.00 141.40-140.70 139.95-139.00

Intra-Day Strategy (30th 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$1664.84/oz and low of $1641.50/oz. Gold is down by 0.0379% at US$1660.46/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 1670-1731 keeping stop loss closing above 1731, targeting 1660-1651-1640 and 1631-1620-1610. Buy in between 1660-1590 with risk below 1590, targeting 1670-1679 and 1690-1711-1732.

 
Intraday Support Levels
S1     1,660-1,651
S2     1,640-1,631
S3     1,620-1,610
Intraday Resistance Levels
R1     1,670-1,679
R2     1,690-1,700
R3     1,714-1,731

Technical Indicators

Name   Value Action
14DRSI  

43.162

Buy
20-DMA   1677.08 Sell
50-DMA  

1714.41

Sell
100-DMA   1754.86 Sell
200-DMA   1789.16 Sell
STOCH(5,3)   76.820 Sell
MACD(12,26,9)   -21.943 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$18.90/oz and low of US18.48/oz settled down by 0.079% at US$18.81/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     18.90-18.00
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   48.324 Buy
20-DMA   18.98 Buy
50-DMA   19.30 Sell
100-DMA   20.11 Sell
200-DMA   21.30 Sell
STOCH(5,3)   58.734 Sell
MACD(12,26,9)   -0.152 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$82.47/bbl, an intraday low of US$79.90/bbl, and settled down by 0.320% to close at US$81.19/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 Thursday made an intraday low of US$0.9635/EUR, a high of US$0.9815/EUR, and settled the day up by 0.847% to close at US$0.9814/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 0.9800-1.0430, targeting 0.9550 and 0.9440-0.9390 with stop-loss at daily closing above 1.0430. Buy above 0.9740-0.9390 with risk below 0.9390, targeting 0.9620-0.9740-0.9800 and 0.9860-0.9910-0.9995.

 
Intraday Support Levels
S1     0.9740-0.9610
S2     0.9550-0.9440
S3     0.9390-0.9300

Intraday  Resistance Levels
R1     0.9800-0.9860
R2     0.9910
R3     0.9995-1.0105

TECHNICAL INDICATORS
Name   Value Action
14DRSI   43.092 Buy
20-DMA   0.9863 Sell
50-DMA   1.0011 Sell
100-DMA   1.0220 Sell
200-DMA   1.0559 Sell
STOCH(5,3)   74.610 Buy
MACD(12,26,9)   -0.0025 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.0761/GBP, a high of US$1.1118/GBP, and settled the day up 0.1898% to close at US$1.1108/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 1.1100-1.0640 with a target of 1.1150-1.1260-1.1360 and 1.1390-1.1450 with stop loss closing below 1.0640 Sell in between 1.1150-1.1410 with targets at 1.0995-1.0910-1.0800 and 1.0710-1.0640-1.0590 with stop loss should be 1.1450.

 
Intraday Support Levels
S1     1.1100-1.0995
S2     1.0910-1.0800
S3     1.0710-1.0640

Intraday Resistance Levels
R1     1.1150-1.1260
R2     1.1360
R3     1.1390-1.1450

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

42.164

Buy
20-DMA   1.1255 Sell
50-DMA   1.1580 Sell
100-DMA   1.1927 Sell
200-DMA   1.2383 Sell
STOCH(5,3)   75.829 Sell
MACD(12,26,9)   -0.0021 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made an intra‐day low of JPY144.03/USD and made an intraday high of JPY144.80/USD and settled the day up by 0.167% at JPY144.42/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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