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Daily Market Lookup

  • The dollar steadied and pushed higher in early dealings in Europe on Wednesday, after senior Federal Reserve officials played down suggestions of an imminent 'pivot' in its monetary policy amid signs that the U.S. labor market is cooling down. The dollar had slumped on Tuesday after the Labor Department reported one of the biggest ever monthly drops in the number of job vacancies, a relatively clear and strong signal that the Fed's series of rate hikes this year is forcing companies to pare back their hiring plans. However, San Francisco Fed President Mary Daly had told CNN after the numbers that "There's a lot of room to slow the labor market before we get into severe recessionary conditions that people are predicting," while Philip Jefferson, one of the recent additions to the Fed's Washington, D.C.- based board of governors, repeated the Fed's willingness to accept "a period of below-trend growth" as it fights to bring inflation down. The so-called JOLTs survey was the first of a series of big numbers from the U.S. labor market scheduled this week, which will culminate with the official payrolls report on Friday. In the meantime, ADP will report its assessment of private-sector hiring in September at 08:15 ET (12:15 GMT). The pound and euro were the two weakest of the major currencies, losing 0.5% and 0.3%, respectively, ahead of a key meeting of oil exporters in Vienna that is set to announce radical output cuts in order to support prices. As net energy importers, higher oil prices typically act as a headwind to the U.K. and Eurozone economies. The massive increase in the cost of the Eurozone's energy bill was evident again earlier in German trade data for August, which showed the country's second-smallest monthly trade surplus in 30 years (the smallest was posted only three months ago). There were also downward revisions to S&P's final purchasing managers indices for all four of the Eurozone's big economies. The pound, for its part, also continued to struggle with the new government's mixed messaging over its spending plans, an issue which may not be resolved even with Prime Minister Liz Truss's speech to the Conservative Party conference later Wednesday. The central banks of Iceland, Romania and Poland all have their regular policy meetings later Wednesday.
  • The dollar suffered a bruising encounter Tuesday, but its swing lower may come to an abrupt end in the coming days as Friday’s U.S. monthly jobs data has the potential to drown out recent hopes of a Federal Reserve pivot. Data on Friday is expected to show the U.S. economy created about 250,000 jobs last month, below the 315,000 seen in August, with average hourly earnings forecast to remain steady at about 0.3% and the unemployment rate at 3.8%. As the labor market has remained tight, threatening an uptick in wages, the Fed has made it clear that slowing the economy, and job growth remain central to its plans to cool inflation. Against the backdrop of red-hot inflation, Fed chairman Jerome Powell has insisted on a need-for-speed approach to get its benchmark rate into restrictive territory and has repeatedly pushed back against bets on a Fed pivot. But a recent wave of softer global economic data has revived hopes of a Fed pivot, pushing Treasury yields lower and pressuring the greenback. Yet, even if the Fed does signal a pause may be offing, the Fed’s fund rate, at 3% to 3.25%, still has plenty of room until reaching an expected peak, or terminal rate, of around 4.5% leaving ample ammunition for the dollar to snap its downturn.
  • OPEC+ looks set for deep cuts to its oil output targets when it meets on Wednesday, curbing supply in an already tight market despite pressure from the United States and others to pump more. The potential OPEC+ cut could spur a recovery in oil prices that have dropped to about $90 from $120 three months ago due to fears of a global economic recession, rising U.S. interest rates and a stronger dollar. OPEC+, which includes Saudi Arabia and Russia, is working on cuts of 1-2 million barrels per day, sources told Reuters, with several sources saying cuts could be closer to 2 million. The United States is pushing OPEC not to proceed with the cuts arguing that fundamentals don't support them, a source familiar with the matter said. Sources said it remained unclear if cuts could include additional voluntary reductions by members such as Saudi Arabia or if cuts could include existing under-production by the group. OPEC+ fell about 3.6 million bpd short of its output target in August. JP Morgan also said it expected Washington to put in place countermeasures by releasing more oil stocks. Saudi Arabia and other members of OPEC+ - which groups the Organization of the Petroleum Exporting Countries and other producers including Russia - have said they seek to prevent volatility rather than to target a particular oil price. Benchmark Brent crude traded flat at below $92 per barrel on Wednesday after rising on Tuesday. The West has accused Russia of weaponising energy, creating a crisis in Europe that could trigger gas and power rationing this winter. Moscow accuses the West of weaponising the dollar and financial systems such as SWIFT in retaliation for Russia sending troops into Ukraine in February. The West accuses Moscow of invading Ukraine while Russia calls it a special military operation. Part of the reason Washington wants lower oil prices is to deprive Moscow of oil revenue while Saudi Arabia has not condemned Moscow's actions. Relations have been strained between the kingdom and the administration of Biden, who travelled to Riyadh this year but failed to secure any firm cooperation commitments on energy.

 

 
Intraday RESISTANCE LEVELS
5th 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 86.00-87.90 88.50-89.40 91.30-92.10
EURO/USD 0.9910-0.9995 1.0105 1.0150-1.0205
GBP/USD 1.1450-1.1500 1.1560-1.1640 1.1760-1.1895
USD/JPY 145.30-145.95 146.90 147.50-148.00

Intraday SUPPORTS LEVELS
5th October 2022 S1 S2 S3
GOLD-XAU 1,700-1,690 1,679-1,670 1,660-1,651
Silver-XAG 20.60–20.20 19.80-18.90 18.00-17.80
Crude Oil 84.60-83.55 82.10 80.90-79.00
EURO/USD 0.9860-0.9800 0.9740-0.9610 0.9550-0.9440
GBP/USD 1.1295-1.1260 1.1150-1.1100 1.0995-1.0910
USD/JPY 144.00–143.10 142.00 141.40-140.70

Intra-Day Strategy (5th 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$1729.46/oz and low of $1659.13/oz. Gold is up by 1.579% at US$1726.26/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 Tuesday made its intraday high of US$21.23/oz and low of US20.60/oz settled up by 1.827% at US$21.05/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     20.60–20.20
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 Tuesday made an intra‐day high of US$86.33/bbl, an intraday low of US$82.67/bbl, and settled up by 3.57% to close at US$85.67/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 86.00-92.10 with stop loss at 92.50; targeting 84.60-83.55-82.10 and 80.90-79.00-77.90. Buy above 84.60-79.10 with risk daily closing below 79.00; targeting 86.00-87.90-88.50 and 89.40-91.30-92.10.

 
Intraday Support Levels
S1     84.60-83.55
S2     82.10
S3     80.90-79.00

Intraday Resistance Levels
R1     86.00-87.90
R2     88.50-89.40
R3     91.30-92.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   51.721 Sell
20-DMA   83.60 Sell
50-DMA   87.83 Sell
100-DMA   92.16 Sell
200-DMA   91.83 Sell
STOCH(5,3)   89.720 Sell
MACD(12,26,9)   -1.59 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$0.9805/EUR, a high of US$0.9993/EUR, and settled the day up by 1.635% to close at US$0.9984/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 Tuesday made an intra‐day low of US$1.1279/GBP, a high of US$1.1489/GBP, and settled the day up 1.309% to close at US$1.1469/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     1.1295-1.1260
S2     1.1150-1.1100
S3     1.0995-1.0910

Intraday Resistance Levels
R1     1.1450-1.1500
R2     1.1560-1.1640
R3     1.1760-1.1895

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 Tuesday made an intra‐day low of JPY143.88/USD and made an intraday high of JPY144.93/USD and settled the day down by 0.304% at JPY144.07/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     144.00–143.10
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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