AAFX TRADING

Daily Market Lookup

  • The U.S. dollar retreated in early European trading Tuesday with risk sentiment on the rise, while sterling retained its recent gains after the U.K. government’s policy u-turn. Traders are beginning to wonder if the slowdown visible in the U.S. and world economies will force the Federal Reserve to adjust its rate-hiking trajectory lower. This has driven a sharp rally in government bonds over the last week, driving benchmark Treasury yields down all along the yield curve, a move which has continued Tuesday. New Finance Minister Kwasi Kwarteng also announced he would be bringing forward his fiscal statement in an attempt to calm markets as he is likely to announce spending cuts to try and limit the government’s borrowing. Britain's bond market is undergoing "a major repricing", but should comfortably absorb the extra 62 billion pounds ($69 billion) of debt announced, the head of the U.K. Debt Management Office said on Monday. Elsewhere, EUR/USD rose 0.4% to 0.9864, ahead of the release of the latest producer prices for the Eurozone as a whole for August. These are expected to remain at highly elevated levels, increasing the pressure on the European Central Bank to continue with another hefty interest rate rise later this month.
  • 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.
  • Oil prices rose on Tuesday as expectations that OPEC+ may agree to a large cut in crude output on Wednesday offset concerns about the global economy. The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, is expected to cut output by more than 1 million barrels per day (bpd) at their first in-person meeting since 2020 on Wednesday, according to OPEC sources. Voluntary cuts by individual members could come on top of this, making it their largest cut since the start of the COVID-19 pandemic, OPEC sources said. Kuwait's oil minister said OPEC+ would make a suitable decision to guarantee energy supply and to serve the interests of producers and consumers. Edward Moya, a senior analyst with OANDA, said: "Despite everything going on with the war in Ukraine, OPEC+ has never been this strong and they will do whatever it takes to make sure prices are supported here." OPEC+ has boosted output this year after record cuts put in place in 2020 when the pandemic slashed demand. But in recent months, the organisation has failed to meet its planned output increases, missing in August by 3.6 million bpd. The production target cut being considered was justified by the sharp decline in oil prices from recent highs, said Goldman Sachs (NYSE:GS), adding that this reinforced its bullish outlook on oil. Oil prices have dropped for four straight months as COVID-19 lockdowns in top oil importer China curbed demand while interest rate hikes and a soaring U.S. dollar pressured global financial markets. Major central banks have embarked on the most aggressive round of rate rises in decades, sparking fears of a global economic slowdown. However, Swiss lender UBS said going into the year-end it saw several bullish factors that could send crude prices higher, including "recovering Chinese demand, OPEC+ further supply cut, the end of the U.S. Strategic Petroleum Reserve (SPR) release and the upcoming EU ban on Russian crude exports." U.S. crude oil stocks were estimated to have increased by around 2 million barrels in the week to Sept. 30, a preliminary Reuters poll showed on Monday. The move would be the cartel’s biggest supply cut since a similar move during the COVID-19 pandemic, and comes after a drastic fall in oil prices this year. The OPEC is set to meet in Vienna on Wednesday- its first in-person meeting since 2020- where it will decide on trimming supply. Several members of the cartel have already warned that production will be cut to support prices, which are languishing near eight-month lows. Oil prices fell sharply from a 14-year high this year as concerns over dwindling demand largely offset curbs to Russian supply from the Ukraine war. Rising interest rates, inflation, and signs of weakening global economic activity were the biggest weights on crude this year. The United States’ depletion of its Strategic Petroleum Reserve also increased supply, bringing down prices ahead of the November midterm elections.S trength in the dollar this year also weighed on crude, as the greenback reached 20-year highs. A stronger dollar makes commodity imports more expensive, as they are priced in the currency.

 

 
Intraday RESISTANCE LEVELS
4th October 2022 R1 R2 R3
GOLD-XAU 1,714-1,731 1,740 1,752-1,760
Silver-XAG 21.30-21.90 22.55 23.00-23.40
Crude Oil 83.55-84.60 86.00 87.90-88.50
EURO/USD 0.9910-0.9995 1.0105 1.0150-1.0205
GBP/USD 1.1390-1.1450 1.1500 1.
USD/JPY 145.30-145.95 146.90 147.50-148.00

Intraday SUPPORTS LEVELS
4th October 2022 S1 S2 S3
GOLD-XAU 1,700-1,690 1,679-1,670 1,660-1,651
Silver-XAG 20.70–20.20 19.80-18.90 18.00-17.80
Crude Oil 82.10-80.90 79.00 77.90-76.06
EURO/USD 0.9860-0.9800 0.9740-0.9610 0.9550-0.9440
GBP/USD 1.1360-1.1260 1.1150-1.1100 1.0995-1.0910
USD/JPY 144.70–143.10 142.00 141.40-140.70

Intra-Day Strategy (4th 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 Monday made its intraday high of US$1701.42/oz and low of $1659.66/oz. Gold is up by 2.36% at US$1699.64/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 1714-1760 keeping stop loss closing above 1760, targeting 1700-1690-1681 and 1660-1651-1640. Buy in between 1700-1660 with risk below 1590, targeting 1714-1732-1740 and 1751-1760.

 
Intraday Support Levels
S1     1,700-1,690
S2     1,679-1,670
S3     1,660-1,651
Intraday Resistance Levels
R1     1,714-1,731
R2     1,740
R3     1,752-1,760

Technical Indicators

Name   Value Action
14DRSI  

55.702

Buy
20-DMA   1681.64 Sell
50-DMA  

1713.45

Sell
100-DMA   1752.79 Sell
200-DMA   1787.43 Sell
STOCH(5,3)   76.820 Sell
MACD(12,26,9)   -21.943 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$20.70/oz and low of US19.00/oz settled up by 8.92% at US$20.699/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 20.70-17.80, targeting 21.45-22.00-22.55 and 23.00-23.50 with stop loss should be placed on the breakage below 17.80. Sell in between 21.50-23.40 with stop loss above 23.40; targeting 20.70-20.20-19.80 and 18.00-17.50.

 
Intraday  Support Levels
S1     20.70–20.20
S2     19.80-18.90
S3     18.00-17.80

Intraday  Resistance Levels
R1     21.30-21.90
R2     22.55
R3     23.00-23.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   66.436 Buy
20-DMA   19.33 Buy
50-DMA   19.43 Sell
100-DMA   20.14 Sell
200-DMA   21.30 Sell
STOCH(5,3)   95.734 Sell
MACD(12,26,9)   -0.053 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday 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 83.55-88.50 with stop loss at 88.50; 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     82.10-80.90
S2     79.00
S3     77.90-76.06

Intraday Resistance Levels
R1     83.55-84.60
R2     86.00
R3     87.90-88.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   48.290 Sell
20-DMA   83.19 Sell
50-DMA   87.84 Sell
100-DMA   92.25 Sell
200-DMA   91.88 Sell
STOCH(5,3)   77.221 Sell
MACD(12,26,9)   -2.170 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$0.9752/EUR, a high of US$0.9844/EUR, and settled the day by 0.510% to close at US$0.9824/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 0.9910-1.0430, targeting 0.9860-0.9800-0.9740 and 0.9610-0.9550-0.9440 with stop-loss at daily closing above 1.0430. Buy above 0.9860-0.9390 with risk below 0.9390, targeting 0.9910-0.9995-1.0105 and 1.0150-1.0205.

 
Intraday Support Levels
S1     0.9860-0.9800
S2     0.9740-0.9610
S3     0.9550-0.9440

Intraday  Resistance Levels
R1     0.9910-0.9995
R2     1.0105
R3     1.0150-1.0205

TECHNICAL INDICATORS
Name   Value Action
14DRSI   44.852 Buy
20-DMA   0.9860 Sell
50-DMA   1.0003 Sell
100-DMA   1.0212 Sell
200-DMA   1.0551 Sell
STOCH(5,3)   87.552 Buy
MACD(12,26,9)   -0.0025 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.0849/GBP, a high of US$1.1334/GBP, and settled the day up 1.449% to close at US$1.1321/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     1.1360-1.1260
S2     1.1150-1.1100
S3     1.0995-1.0910

Intraday Resistance Levels
R1     1.1390-1.1450
R2     1.1500
R3     1.

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 Monday made an intra‐day low of JPY144.15/USD and made an intraday high of JPY145.31/USD and settled the day down by 0.0926% at JPY144.51/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 144.70-139.70 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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