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  • The U.S. dollar edged higher in early European trading Monday, while sterling also gained after the U.K. government agreed to water down its plans for unfunded tax cuts. GBP/USD climbed 0.3% to 1.1188 after the British government decided to reverse the proposed scrapping of the highest rate of income tax, a plan that has been widely criticized in the governing Conservative Party as well as the country as a whole. New Finance Minister Kwasi Kwarteng announced his plan to substantially cut taxes, including the 45p highest rate of income tax, as part of a mini-budget on Sept. 23. The need for vast government borrowing to pay for the plan resulted in the value of the pound and government bonds slumping dramatically. Prime Minister Liz Truss attempted to defend the plan in the press over the weekend, but her pleas didn’t work with several senior lawmakers voicing their opposition to the policy at the party's annual conference which began on Sunday. The European Central Bank is expected to announce another hefty interest rate rise later this month after data on Friday showed that Eurozone inflation beat forecasts, climbing to a record high of 10.0% in September. The German manufacturing PMI release is due later in the session, and this could show that this important sector in the Eurozone’s economic powerhouse has fallen further into contraction. USD/JPY rose 0.1% to 144.95, just under the psychologically-important 145 line which could prompt Japanese officials to step in again after they conducted their first yen buying intervention since 1998 last month. Japanese Finance Minister Shunichi Suzuki stated that Japan stood ready for "decisive" steps in the foreign exchange market if excessive yen moves persisted.
  • Most Asian currencies crept lower on Monday as concerns over worsening global economic growth kept the dollar close to a 20-year peak, while Australian and New Zealand currencies rose ahead of their respective interest rate decisions this week. Both central banks are grappling with elevated inflation amid rising food and fuel prices. The rate hikes also come as central banks move to shield their currencies from rising rates across the globe. The U.S. dollar index fell marginally to about 112.07 on Monday, after losing nearly 1% last week. But the greenback remained pinned near a 20-year peak, with the prospect of further weakness in the currency remaining low ahead of more interest rate hikes by the Federal Reserve. Focus is now on U.S. nonfarm payrolls data this week, which is broadly expected to factor into the Fed’s plans for future rate hikes. The Japanese yen was little changed as traders weighed more weak economic signals from the country against assurances from the government that it will act decisively to curb more weakness in the currency. Japanese business sentiment worsened more than expected in the third quarter, a Bank of Japan survey showed on Monday. The reading casts more doubts over a potential recovery in the world’s third-largest economy this year. The country’s finance minister Shunichi Suzuki said on Monday that the government stands ready to intervene in currency markets, as it did in September, to prevent deeper losses in the yen. The yen has fallen sharply this year to 24-year lows, pressured by a widening gap between local and foreign interest rates. Broader Asian currencies are also under pressure from rising U.S. interest rates, and are expected to see pronounced weakness until the Fed decides to end its tightening cycle. But Asian trading volumes are expected to be somewhat muted this week due to a week-long holiday in China.
  • Oil prices jumped more than 3% in early Asian trade on Monday, as OPEC+ considers cutting output by more than 1 million barrels a day, for its biggest reduction since the pandemic, in a bid to support the market. Oil prices have tumbled for four straight months since June, as COVID-19 lockdowns in top energy consumer China hurt demand, while rising interest rates and a surging U.S. dollar weighed on global financial markets. To support prices, the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, is considering an output cut of more than 1 million bpd ahead of Wednesday's meeting, OPEC+ sources told Reuters. If agreed, it will be the group's second consecutive monthly cut after reducing output by 100,000 bpd last month. But analysts expect the hit to supply from the cut will be markedly lower than the headline number, as many OPEC+ members are producing far less than their quotas. With just a handful of producers hitting output targets, it is likely that only they would have to cut, ING analysts said in a note. OPEC+ missed its production targets by nearly 3 million bpd in July, two sources from the producer group said, as sanctions on some members and low investment by others stymied its ability to raise output. While prompt Brent prices could strengthen further in the immediate short term, concerns over a global recession are likely to limit the upside, consultancy FGE said. Also on Friday, China issued its biggest quota for exports of oil products this year and topped up crude import quotas for independent refiners. State and private refiners can export as much as 15 million tonnes of gasoline, diesel, jet fuel and low-sulphur fuel oil, adding much needed supplies into global markets to replace Russian exports the European Union embargoed in February. However, analysts and traders said some of China's exports were likely to spill over into early 2023 as refiners will need time to ramp up. The dollar index fell for a fourth consecutive day on Monday after touching its peak in two decades. A cheaper dollar could bolster the appetite of oil buyers who use other currencies and support oil prices.

 

 
Intraday RESISTANCE LEVELS
3rd October 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 82.10-83.55 84.60 86.00-87.90
EURO/USD 0.9800-0.9860 0.9910 0.9995-1.0105
GBP/USD 1.1260-1.1360 1.1390 1.1450-1.1500
USD/JPY 145.30-145.95 146.90 147.50-148.00

Intraday SUPPORTS LEVELS
3rd October 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 80.90-79.00 77.90 76.20-74.90
EURO/USD 0.9740-0.9610 0.9550-0.9440 0.9390-0.9300
GBP/USD 1.1150-1.1100 1.0995-1.0910 1.0800-1.0710
USD/JPY 144.70–143.10 142.00 141.40-140.70

Intra-Day Strategy (3rd October 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$1675.29/oz and low of $1641.50/oz. Gold is down by 0.0174% at US$1660.85/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  

42.052

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$19.28/oz and low of US18.76/oz settled up by 1.197% at US$19.02/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 18.90-17.00, targeting 19.80-20.45-20.70 and 21.45-22.00 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   52.304 Buy
20-DMA   19.02 Buy
50-DMA   19.31 Sell
100-DMA   20.09 Sell
200-DMA   21.29 Sell
STOCH(5,3)   52.734 Sell
MACD(12,26,9)   -0.053 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$82.10/bbl, an intraday low of US$78.71/bbl, and settled down by 2.41% to close at US$79.26/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     80.90-79.00
S2     77.90
S3     76.20-74.90

Intraday Resistance Levels
R1     82.10-83.55
R2     84.60
R3     86.00-87.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   44.797 Sell
20-DMA   83.05 Sell
50-DMA   89.97 Sell
100-DMA   92.41 Sell
200-DMA   91.95 Sell
STOCH(5,3)   67.424 Sell
MACD(12,26,9)   -1.971 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$0.9734/EUR, a high of US$0.9853/EUR, and settled the day down by 0.145% to close at US$0.9800/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 Friday made an intra‐day low of US$1.024/GBP, a high of US$1.1234/GBP, and settled the day up 0.1898% to close at US$1.1155/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 1.1150-1.0640 with a target of 1.1260-1.1360 and 1.1390-1.1450 with stop loss closing below 1.0640 Sell in between 1.1260-1.1410 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     1.1150-1.1100
S2     1.0995-1.0910
S3     1.0800-1.0710

Intraday Resistance Levels
R1     1.1260-1.1360
R2     1.1390
R3     1.1450-1.1500

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 Friday made an intra‐day low of JPY144.19/USD and made an intraday high of JPY144.80/USD and settled the day up by 0.172% at JPY144.73/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 145.30-148.90 with risk above 148.90 targeting 144.70-143.10-142.00 and 141.40-140.70-139.95. 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     144.70–143.10
S2     142.00
S3     141.40-140.70

INTRADAY RESISTANCE LEVELS
R1     145.30-145.95
R2     146.90
R3     147.50-148.00

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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