AAFX TRADING

Daily Market Lookup

  • The dollar rose on Thursday, climbing for a second straight session, as investors bet on another strong U.S. non-farm payrolls report that should keep the Federal Reserve on an aggressive tightening path for some time. U.S. non-farm payrolls for September are due to be released on Friday, with economists forecasting a headline print of 250,000 new jobs, compared with 315,000 in August. Chicago Fed President Charles Evans on Thursday said the Fed's policy rate is likely headed to 4.5%-4.75% by the spring of 2023 as the Fed increases borrowing costs to bring down too-high inflation. The euro was down 0.9% against the dollar at $0.9794, earlier falling after the release of European Central Bank minutes from last month's meeting that showed policymakers were worried that inflation could get stuck at exceptionally high levels. Separately, a source told Reuters on Thursday, citing provisional figures that the German government expects Europe's largest economy to slide into recession next year, contracting 0.4% as an energy crisis, rising prices and supply bottlenecks take their toll. Currency markets have struggled to find a clear direction this week, following a dramatic third quarter. The dollar initially slid against most majors, before regaining ground. A major factor driving currency markets currently has been changing expectations of how aggressively central banks' - particularly the Fed - will raise interest rates. A key question is whether policymakers will pivot from primarily worrying about inflation to also considering slowing economic growth, and possibly leading to more cautious interest rate hikes. U.S. inflation data next week will be closely watched.
  • The dollar rose in early trade in Europe on Thursday, after a top Federal Reserve official warned that the U.S. central bank isn't close to ending its cycle of interest rate hikes yet. Atlanta Fed President Raphael Bostic said that the U.S. policy tightening cycle is "still in its early days" and warned explicitly against betting on an early 'pivot'. Despite "glimmers of hope" in recent data, Bostic said "the overarching message I’m drawing...is that we are still decidedly in the inflationary woods, not out of them," That warning assumed a greater significance after the Organization of Petroleum Exporting Countries and its allies (chiefly Russia) acted to keep oil prices high by announcing a big cut in their output from next month. High energy prices have been one of the strongest forces driving the global wave of inflation over the last year. Bostic hasn't been the only Fed official to push back against speculation on a pivot, with San Francisco's Mary Daly making similar comments on two occasions this week alone, despite a big drop in job vacancies that pointed to some cooling off in a red-hot labor market. More hard data from the labor market are due at 08:30 ET with the release of weekly U.S. jobless claims, but the market will get its marching orders for the next week from Friday's official labor market report on Friday. On the European crosses, the euro edged higher to 0.9905 after a big upward revision to German manufacturing orders in July, which suggested that the Eurozone economy will continue to enjoy some support from the easing of supply chain bottlenecks, despite its familiar problems with rising energy costs. The pound also edged up 0.2% to $1.1349, despite what was widely seen as an unconvincing keynote speech by new Prime Minister Liz Truss on Wednesday that left plenty of questions about the sustainability of her fiscal policy unanswered. The Polish zloty, meanwhile, continued to weaken after the National Bank of Poland surprisingly left its key rate at 6.75% at its monthly meeting on Wednesday, breaking a sequence of 11 straight increases.
  • Oil prices fell on Friday as markets awaited more economic cues from a closely-watched U.S. payrolls report, but were headed for strong weekly gains after the OPEC+ announced its biggest supply cut since the 2020 COVID pandemic. Both contracts were up 7.4% and 11% this week, respectively, and were set for their best weekly gain since the start of the Russia-Ukraine war in March. Prices rallied for four straight sessions, recovering sharply from eight-month lows hit earlier as markets positioned for much tighter supply conditions this year. The Organization of Petroleum Exporting Countries and its allies said it will cut production by two million barrels per day in the coming months. The move was largely in response to a sharp fall in oil prices this year, with the cartel expressing discomfort over prices staying below $90 a barrel. Crude oil prices are still trading well below their annual peaks, having taken a beating from a rising dollar and concerns that higher interest rates and inflation will erode demand. Friday’s nonfarm payrolls report is expected to shine more light on that aspect of the market, given that the reading is expected to factor into the Federal Reserve’s plans to hike interest rates. While Friday’s data is expected to show a decline in the rate of new jobs being created, any signs of a stable labor market will give the Fed more space to keep hiking rates at a sharp clip. Fed officials this week largely dismissed speculation that increasing economic ructions will deter the bank from tempering its pace of rate hikes. Their comments supported the dollar, which in turn halted the oil rally. Strength in the greenback was also one of the biggest weights on crude prices this year, given that it makes dollar-denominated commodities more expensive. Apart from the payrolls data, crude markets are also awaiting measures from the U.S. government to counter the OPEC+ cut. The Biden administration had largely opposed the cut, and is expected to release more oil from its Strategic Petroleum Reserve to prevent a major jump in fuel prices ahead of the midterm elections in November.

 

 
Intraday RESISTANCE LEVELS
7th 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 87.90-88.50 89.40 91.30-92.10
EURO/USD 0.9860-0.9910 0.9995-1.0105 1.0150-1.0205
GBP/USD 1.1260-1.1295 1.1450-1.1500 1.1560-1.1640
USD/JPY 145.30-145.95 146.90 147.50-148.00

Intraday SUPPORTS LEVELS
7th 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 86.00- 84.60 83.55-82.10 80.90-79.00
EURO/USD 0.9800-0.9740 0.9610 0.9550-0.9440
GBP/USD 1.1150-1.1100 1.0995 1.0910-1.0860
USD/JPY 144.00–143.10 142.00 141.40-140.70

Intra-Day Strategy (7th 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 Thursday made its intraday high of US$1725.48/oz and low of $1706.87/oz. Gold is down by 0.22% at US$1712.53/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 Thursday made its intraday high of US$20.86/oz and low of US20.60/oz settled up by 1.827% at US$20.64/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 Thursday made an intra‐day high of US$88.42/bbl, an intraday low of US$86.40/bbl, and settled up by 1.070% to close at US$88.30/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 87.90-92.10 with stop loss at 92.50; targeting 84.60-83.55-82.10 and 80.90-79.00-77.90. Buy above 87.00-79.10 with risk daily closing below 79.00; targeting 87.90-88.50 and 89.40-91.30-92.10.

 
Intraday Support Levels
S1     86.00- 84.60
S2     83.55-82.10
S3     80.90-79.00

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   55.106 Sell
20-DMA   84.54 Sell
50-DMA   87.91 Sell
100-DMA   92.03 Sell
200-DMA   91.78 Sell
STOCH(5,3)   94.720 Sell
MACD(12,26,9)   -1.59 Buy

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$0.9787/EUR, a high of US$0.9925/EUR, and settled the day up by 0.837% to close at US$0.9790/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     0.9800-0.9740
S2     0.9610
S3     0.9550-0.9440

Intraday  Resistance Levels
R1     0.9860-0.9910
R2     0.9995-1.0105
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 Thursday made an intra‐day low of US$1.1382/GBP, a high of US$1.1382/GBP, and settled the day down -1.463% to close at US$1.1158/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 the zero line but histograms are increasing leading to 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
S3     1.0910-1.0860

Intraday Resistance Levels
R1     1.1260-1.1295
R2     1.1450-1.1500
R3     1.1560-1.1640

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 JPY144.38/USD and made an intraday high of JPY145.13/USD and settled the day up by 0.412% at JPY145.12/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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