AAFX TRADING

Daily Market Lookup

  • The dollar scaled fresh 24-year heights on the yen on Wednesday, breaching levels that prompted intervention by Japanese officials last month, as traders braced for U.S. inflation data and its implications for further Federal Reserve rate hikes. Sterling slipped to a new two-week trough after Bank of England Governor Andrew Bailey reiterated that the central bank will end its emergency bond-buying program on Friday and told pension fund managers to finish rebalancing their positions within that time frame. However, the pound rebounded slightly after a report in the Financial Times said the BoE has siganlled privately to lenders that it's prepared to prolong its bond purchases. The Japanese currency is particularly sensitive to the gap between U.S. and Japanese long-term bond yields. The benchmark 10-year Treasury yield jumped to the cusp of a 14-year high overnight at 4.006%, while the equivalent Japanese government bond yield is pinned near zero by the Bank of Japan. Japanese authorities staged their first yen-buying intervention since 1998 on Sept. 22, when the yen tumbled to as low as 145.90 per dollar. Chief Cabinet Secretary Hirokazu Matsuno said at a regular media briefing on Wednesday that officials remain ready to take appropriate steps to counter excessive currency moves. The BOJ is a major outlier among developed-nation central banks, committing to maintaining its massive bond-buying stimulus even as global policymakers have embarked on a wave of tightening to curb inflation Worries that continued aggressive policy tightening by the Fed and most of its peers will lead the global economy into recession have been a major driver of risk sentiment over recent months. The International Monetary Fund warned on Tuesday that countries representing a third of world output could be in recession next year, even as it urged central banks to keep up their fight against inflation. Recent strong U.S. labour market reports have scuppered hopes among some market participants that Fed policymakers may slow the pace of rate hikes into year-end. The U.S. consumer price report, due on Thursday, could be a flashpoint for currency volatility, and a sharp move higher in dollar-yen could become a trigger for intervention, Joseph Capurso, a currency strategist at Commonwealth Bank of Australia said.
  • Gold prices moved little on Wednesday as investors avoided big bets ahead of key U.S. inflation data this week, while the minutes of the Federal Reserve’s September meeting were also in focus. Bullion prices are now back below the key support level of $1,700, as pressure from the dollar increased amid more hawkish signals from the Federal Reserve. Minutes from the Fed’s September meeting, due later in the day, are also expected to reinforce the Fed’s stance, given that the central bank raised interest rates by 75 basis points and warned that it was willing to risk some economic headwinds from higher rates, as it moves to control inflation. U.S. inflation data for September is also a key point of focus for metal markets this week. Producer price inflation data is due later on Wednesday, and is expected to show that price headwinds for manufacturers persisted last month. Consumer price inflation, the more closely-watched inflation gauge, is due on Thursday, and is expected to show inflation remained pinned near 40-year highs last month. Both readings, coupled with strong jobs data last week, are expected to give the Fed enough impetus to keep raising interest rates at a sharp pace. Gold prices plummeted this year, recently sinking to a two-year low as rising interest rates across the globe increased the opportunity cost of holding the yellow metal. This trend is expected to continue as long as high inflation persists. Weakening appetite for bullion also robbed it of its safe haven status this year, with the dollar largely overtaking gold and other precious metals. Markets are now wary of any new lockdown measures in China that could potentially stifle demand, after a resurgence in COVID cases in the country. Focus is also on the announcement of any major stimulus measures during the 20th National Congress of the Communist Party later this week. Markets are also awaiting Chinese inflation and trade data, due on Friday, for more cues on a potential economic recovery.
  • Oil prices fell further on Wednesday, extending steep losses from the prior sessions amid growing concerns that a new COVID outbreak in China and a worsening global economic outlook will severely crimp demand. Oil prices fell sharply in recent sessions as major Chinese cities including Shanghai and Shenzhen ramped up COVID testing and introduced new curbs amid a spike in infections. Beijing’s zero-COVID policy ground Chinese economic growth to a halt this year as the government introduced a flurry of lockdowns in major business hubs. This saw oil imports by the country slow steadily through the year. Focus this week is on the 20th National Congress of the Chinese Communist Party, with markets waiting to see if the government will revise its zero-COVID policy amid increasing economic headwinds. Chinese trade data, due on Friday, is also expected to shine more light on the pace of crude imports to the country, although an increased export quota by local refiners bodes poorly for demand. Further weighing on oil prices, the International Monetary Fund (IMF) warned on Tuesday that the risk of a global recession was increasing. The fund also cut its global growth forecast for 2023, citing the combined effects of rising interest rates and inflation. The forecast boosted the dollar, and weighed on most asset classes. It also sparked a 2% loss in oil prices as markets feared more demand destruction from slowing economic growth. Oil prices have plummeted this year as investors feared that a global recession will severely dent demand for crude. Strength in the dollar weighed on crude by making imports more expensive for several major consumers. The U.S. government has also steadily drawn down from its Strategic Petroleum Reserve in a bid to lower gasoline prices ahead of the November midterm elections. The White House recently warned that it will release more of its stockpiles, in response to a supply cut by the OPEC+. The supply cut provided a major boost to oil prices last week, and is expected to provide a floor for crude in the near-term. Disruptions to Russian production, due to the Ukraine war, are also expected to tighten supply this year.

 

 
Intraday RESISTANCE LEVELS
12th 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 88.50-89.40 91.30-92.60 93.20-94.00
EURO/USD 0.9740-0.9800 0.9860-0.9910 0.9995-1.0105
GBP/USD 1.1020-1.1100 1.1150-1.1260 1.1295-1.1450
USD/JPY 145.30-145.95 146.90 147.50-148.00

Intraday SUPPORTS LEVELS
12th 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 87.90-85.85 85.00-83.70 83.00-81.60
EURO/USD 0.9700-0.9610 0.9530 0.9440-0.9400
GBP/USD 1.0980-1.0930 1.0860 1.0800-1.0760
USD/JPY 144.00–143.10 142.00 141.40-140.70

Intra-Day Strategy (12th 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$1683.90/oz and low of $1660.98/oz. Gold is down by 0.124% at US$1666.12/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  

44.150

Buy
20-DMA   1708.22 Sell
50-DMA  

1708.21

Sell
100-DMA   1745.65 Sell
200-DMA   1781.77 Sell
STOCH(5,3)   7.742 Sell
MACD(12,26,9)   -7.796 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$19.71/oz and low of US19.05/oz settled down by 2.331% at US$19.14/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 Tuesday made an intra‐day high of US$90.34/bbl, an intraday low of US$86.78/bbl, and settled down by 2.79% to close at US$87.43/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 88.50-94.00 with stop loss at 94.00; targeting 87.90-92.10-91.30-89.40 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     87.90-85.85
S2     85.00-83.70
S3     83.00-81.60

Intraday Resistance Levels
R1     88.50-89.40
R2     91.30-92.60
R3     93.20-94.00

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 Tuesday made an intraday low of US$0.9669/EUR, a high of US$0.9774/EUR, and settled the day up by 0.0670% to close at US$0.9706/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 1.0980-1.0760 with a target of 1.1020-1.1100-1.1150 and 1.1260-1.1360-1.1390 with stop loss closing below 1.0640 Sell in between 1.1020-1.1410 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     1.0980-1.0930
S2     1.0860
S3     1.0800-1.0760

Intraday Resistance Levels
R1     1.1020-1.1100
R2     1.1150-1.1260
R3     1.1295-1.1450

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

39.391

Buy
20-DMA   1.1189 Sell
50-DMA   1.1465 Sell
100-DMA   1.1814 Sell
200-DMA   1.2290 Sell
STOCH(5,3)   7.851 Sell
MACD(12,26,9)   -0.0129 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made an intra‐day low of JPY145.42/USD and made an intraday high of JPY145.88/USD and settled the day up by 0.118% at JPY145.84/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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