AAFX TRADING

Daily Market Lookup

  • The dollar hit multi-year highs on Tuesday against the risk-sensitive Aussie and Kiwi dollars and the yen hovered near the level that prompted intervention as worries about rising interest rates and geopolitical tensions unsettled investors. Strong U.S. labour data and an expectation of inflation figures on Thursday to remain stubbornly high have all but dashed bets on anything but high interest rates through 2023 and are driving the dollar back toward multi-decade highs. Risk appetite was also hurt on Tuesday after Russia rained missiles upon Ukraine's cities on Monday in retaliation for blast that damaged the only bridge linking Russia to the annexed Crimean peninsula. Sim Moh Siong, currency strategist at Bank of Singapore, said things are still uncertain because of geopolitical risks such as the war in Ukraine, escalating U.S.-China tensions and a sell-off in gilts on Monday. Fear of intervention has held the yen firm in recent weeks, but as it drifts back to multi-decade lows analysts aren't convinced it can hold the line. The risk-sensitive Australian dollar made a 2-1/2 year low of $0.6275 on Monday and hovered at $0.6267 on Tuesday. Analysts at the National Australia Bank (OTC:NABZY) said the Aussie was the market's "whipping boy" in a sell off and that further lows were possible in the near term as sentiment is fragile. Britain's markets remain on edge and not exactly soothed by the Bank of England stepping up bond buying and finance minister Kwasi Kwarteng promising to bring forward some budget announcements.
  • The dollar was broadly higher in early trading in Europe on Tuesday as the pound weakened amid fresh signs of trouble in the U.K. government bond market. The Bank of England said it would widen its purchases of Gilts to include index-linked bonds, after a disorderly selloff in the asset class on Monday which appeared to be triggered - again - by pension funds raising cash to meet margin calls on longer-dated interest rate swaps. The move raises doubts as to whether the Bank will be able to end its outright purchases of Gilts on Friday as planned. On Monday, it had said it would replace the daily auctions with repo operations, whose effect on the money supply - and consequently inflation - can be mitigated by other actions to manage the money market. Index-linked bonds are arguably the safest security in U.K. financial asset universe, given that their returns are pegged to inflation. The sight of them experiencing what the Bank called "fire-sale" conditions is unprecedented in recent history. During the Asian session, the dollar had touched its highest level in two weeks after Federal Reserve vice-chair Lael Brainard repeated that the central bank will keep raising U.S. interest rates in the near term, amid signs that the labor market is proving resilient to the tightening of monetary policy seen so far. That prompted traders to increase their bets that the Fed will hike the fed funds rate by 75 basis points for the third time in a row when it meets at the start of November. However, both Brainard and, before her, Chicago Fed President Charles Evans had also said that the Fed needs to be cautious with any future rate hikes, acknowledging the risk of overshooting. Elsewhere, the Hungarian sunk back toward the all-time low it hit on Monday amid concerns that the missile attacks on Ukrainian cities at the start of the week signal a new escalation of the war in Ukraine. President Vladimir Putin threatened more "severe" actions, and various reports indicated thousands more Russian troops would be deployed to Belarus in what was seen as a possible prelude to another invasion of Ukraine from the north. Russia's first invasion from Belarusian territory ended in ignominy in March after its troops ran out of fuel.
  • Oil prices slid on Tuesday, extending losses of nearly 2% in the previous session, as a stronger U.S. dollar and a flare-up in COVID-19 cases in China raised concerns of slowing global demand. The dollar hit multi-year highs on Tuesday, with worries about rising interest rates and geopolitical tensions unsettling investors. A strong greenback reduces demand for oil by making it more expensive for buyers using other currencies. Rate increases to date were starting to slow the economy and the full brunt of tighter policy would not be felt for months to come, Fed Vice Chair Lael Brainard said on Monday. The sustained zero COVID-19 policy in China ahead of the Communist Party Congress is "not helping" demand, the analysts added. COVID-19 cases in the world's second-largest oil consumer rose to their highest since August. Its services activity in September contracted for the first time in four months, as pandemic restrictions weighed. In response to the rise in cases, Chinese authorities have stepped up testing in Shanghai and other megacities, as well as extending quarantine times and closing some public spaces where the virus could spread. Capping losses, the Organization of the Petroleum Exporting Countries and allies including Russia, together known as OPEC+, decided last week to lower their output target by 2 million barrels per day, further raising concerns about tightening oil supplies. "More critical is the bullish signal OPEC+ sends here by responding to short-term market dynamics and trying to stabilise or raise prices despite the medium view that demand growth will outpace supply growth for the remainder of the year," said Stephen Innes, managing partner at SPI Asset Management. EU sanctions on Russian crude and oil products will take effect in December and February, respectively, while the bloc last week gave its final approval for a new batch of sanctions against Russia including a price cap on Russian oil exports. India maintains a "healthy dialogue" with Russia and will look at what is offered following an announced ownership revamp to the Sakhalin-1 oil and gas project, Petroleum Minister Hardeep Singh Puri told Reuters. On Friday, Russia issued a decree allowing it to seize Exxon Mobil's 30% stake and gave a Russian state-run company the authority to decide whether foreign shareholders including India's ONGC Videsh can retain their participation in the project.

 

 
Intraday RESISTANCE LEVELS
11th October 2022 R1 R2 R3
GOLD-XAU 1,670-1,679 1,690 1,700-1,714
Silver-XAG 19.60-20.10 20.60-21.30 21.90-22.55
Crude Oil 91.30-92.60 93.20-94.00 95.40-96.70
EURO/USD 0.9740-0.9800 0.9860-0.9910 0.9995-1.0105
GBP/USD 1.1100-1.1150 1.1260-1.1295 1.1450-1.1500
USD/JPY 145.30-145.95 146.90 147.50-148.00

Intraday SUPPORTS LEVELS
11th October 2022 S1 S2 S3
GOLD-XAU 1,660-1,651 1,640 1,628-1,614
Silver-XAG 18.90-18.30 17.80 17.50-17.10
Crude Oil 89.40-88.50 .87.90-86.00
EURO/USD 0.9700-0.9610 0.9530 0.9440-0.9400
GBP/USD 1.1020-1.0980 1.0930 1.0860-1.0800
USD/JPY 144.00–143.10 142.00 141.40-140.70

Intra-Day Strategy (11th 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$1699.79/oz and low of $1665.67/oz. Gold is down by 1.622% at US$1668.04/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 1670-1714 keeping stop loss closing above 1714, targeting 1660-1651-1640 and 1628-1614. Buy in between 1660-1614 with risk below 1614, targeting 1670-1679-1690 and 1700-1714-1732.

 
Intraday Support Levels
S1     1,660-1,651
S2     1,640
S3     1,628-1,614
Intraday Resistance Levels
R1     1,670-1,679
R2     1,690
R3     1,700-1,714

Technical Indicators

Name   Value Action
14DRSI  

42.907

Buy
20-DMA   1685.26 Sell
50-DMA  

1709.77

Sell
100-DMA   1747.18 Sell
200-DMA   1782.90 Sell
STOCH(5,3)   20.637 Sell
MACD(12,26,9)   -6.796 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$20.17/oz and low of US19.51/oz settled down by 2.56% at US$19.59/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 18.90-17.10, targeting 19.60-20.10-20.60 and 21.45-22.00-22.55 with stop loss should be placed on the breakage below 17.10. Sell in between 19.60-23.40 with stop loss above 23.40; targeting 19.60-18.30-17.90 and 17.50-17.10.

 
Intraday  Support Levels
S1     18.90-18.30
S2     17.80
S3     17.50-17.10

Intraday  Resistance Levels
R1     19.60-20.10
R2     20.60-21.30
R3     21.90-22.55

TECHNICAL INDICATORS
Name   Value Action
14DRSI   48.670 Buy
20-DMA   19.60 Buy
50-DMA   19.54 Sell
100-DMA   20.13 Sell
200-DMA   21.24 Sell
STOCH(5,3)   22.501 Sell
MACD(12,26,9)   -0.232 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US$92.59/bbl, an intraday low of US$89.55/bbl, and settled down by 2.782% to close at US$89.82/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 93.10-96.70 with stop loss at 96.70; targeting 92.10-91.30-89.40 and 88.50-87.90-86.00. Buy above 92.10-86.00 with risk daily closing below 86.00; targeting 93.10-94.00-95.40 and 96.70-97.50.

 
Intraday Support Levels
S1    
S2     89.40-88.50
S3     .87.90-86.00

Intraday Resistance Levels
R1     91.30-92.60
R2     93.20-94.00
R3     95.40-96.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   62.2149 Sell
20-DMA   84.98 Sell
50-DMA   88.09 Sell
100-DMA   92.12 Sell
200-DMA   91.82 Sell
STOCH(5,3)   98.344 Sell
MACD(12,26,9)   -0.1820 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$0.9681/EUR, a high of US$0.9752/EUR, and settled the day down by 0.301% to close at US$0.9701/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 0.9740-1.0105, targeting 0.9740-0.9610-0.9550 and 0.9440-0.9400 with stop-loss at daily closing above 1.0105. Buy above 0.9700-0.9390 with risk below 0.9390, targeting 0.9740-0.9800-0.9910 and 0.9995-1.0105.

 
Intraday Support Levels
S1     0.9700-0.9610
S2     0.9530
S3     0.9440-0.9400

Intraday  Resistance Levels
R1     0.9740-0.9800
R2     0.9860-0.9910
R3     0.9995-1.0105

TECHNICAL INDICATORS
Name   Value Action
14DRSI   41.3857 Buy
20-DMA   0.9852 Sell
50-DMA   0.9980 Sell
100-DMA   1.0184 Sell
200-DMA   1.0524 Sell
STOCH(5,3)   34.552 Buy
MACD(12,26,9)   -0.0057 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.1019/GBP, a high of US$1.1110/GBP, and settled the day down 0.2310% to close at US$1.1054/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 1.1020-1.0640 with a target of 1.1100-1.1150-1.1260 and 1.1360-1.1390-1.1450 with stop loss closing below 1.0640 Sell in between 1.1100-1.1410 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     1.1020-1.0980
S2     1.0930
S3     1.0860-1.0800

Intraday Resistance Levels
R1     1.1100-1.1150
R2     1.1260-1.1295
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 Thursday made an intra‐day low of JPY144.49/USD and made an intraday high of JPY145.43/USD and settled the day up by 0.137% at JPY145.32/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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