AAFX TRADING

Daily Market Lookup

  • The U.S. dollar stabilized in early European trading Friday after the release of another hot U.S. inflation number, while sterling retreated from sharp overnight gains amid speculation that the U.K. government is set to withdraw its plans for massive unfunded tax cuts. Investors have seemingly dismissed data that showed U.S. consumer prices increased more than expected in September, with sharp gains in global equity markets boosting risk sentiment. The U.S. currency has been on a tear as soaring inflation, recession fears, and worries over central bank policies across the globe hit risk appetite. The dollar is likely to keep rallying until the current slowdown in the global economy is over and growth starts to accelerate again, according to Citigroup. Elsewhere, GBP/USD fell 0.2% to 1.1303 after having gained sharply overnight on reports of a possible U-turn by the U.K. government on its plans for hefty unfunded tax plans. Finance minister Kwasi Kwarteng cut short his trip to Washington late Thursday amid reports Prime Minister Liz Truss is considering reversing more of her government's controversial "mini-budget." The U.K. bond market, and sterling, was hit hard by the plans to fund massive tax with borrowing, resulting in the Bank of England stepping in to restore calm, announcing an emergency bond-buying program which is set to end later Friday. This follows data released Thursday showing the country's consumer inflation data climbing 10.9% higher year-on-year when harmonized to compare with other European countries, putting more pressure on the European Central Bank to continue hiking interest rates.
  • The dollar fell against most currencies in volatile trading on Thursday, after initially spiking following a hotter-than-expected U.S. inflation report, as some investors thought the market's initial response to the data was excessive. Europe's single currency may have rallied from lows after a Reuters report, citing four sources, said European Central Bank staff see the need for fewer rate hikes than markets now estimate to tame inflation. That suggested that the situation in the euro zone may not be as dire as many thought. Data showed U.S consumer prices increased more than expected in September and underlying inflation pressures continued to escalate, cementing expectations that the Fed will deliver another 75-basis-point (bps) rate increase. The consumer price index rose 0.4% last month after gaining 0.1% in August, the Labor Department said on Thursday. Economists polled by Reuters had forecast the CPI climbing 0.2%. In the 12 months through September, the CPI increased 8.2% after rising 8.3% in August. Traders overall remained on the lookout for Japanese intervention to prop up a struggling yen. Officials have reiterated they stand ready to take appropriate steps to counter excessive currency moves, though whether they wish to defend particular levels remains unclear. Sterling, meanwhile, posted steep gains against the dollar after reports of a possible U-turn by the UK government on its fiscal plans, before strong U.S. inflation data tempered some of those gains. Sky News reported on Thursday that the British government is discussing making changes to the fiscal plan announced last month and looking at which parts of the tax-cutting package might be ditched in a further U-turn by Prime Minister Liz Truss. British finance minister Kwasi Kwarteng said "let's see", when asked in an interview if financial markets had improved on Thursday because of expectations of a U-turn on his plans to scrap an increase in corporation tax, the Telegraph reported.
  • Oil prices reversed earlier losses and inched up in Asian trade on Friday, supported by a weaker U.S. dollar and falling diesel inventories, while Saudi Arabia and Washington continued to clash over plans by OPEC+ to slash production. China, the world's largest crude oil importer, has been fighting COVID flare-ups after its week-long National Day holiday earlier this month and just ahead of a key Communist Party Congress where President Xi Jinping is expected to extend his leadership. The country's infection tally is small by global standards, but it adheres to a zero-COVID policy which is weighing heavily on economic activity. The Organization of Petroleum Exporting Countries and allies, known as OPEC+, announced last week a 2 million barrel per day cut in oil production targets. Saudi Arabia, OPEC+'s de factor leader, and the United States have clashed over the decision. Saudi Arabia rejected criticisms by Washington as "not based on facts" and that the U.S. request to delay the cut by a month would have had negative economic consequences. The White House said it presented the Saudis with an analysis that showed the reductions could hurt the global economy and alleged the Saudis pressured other OPEC members on a vote. Officials with both countries are expected to continue discussions soon. Oil prices were also supported by a steep drawdown in U.S. distillate stocks that came as heating oil demand is expected to rise as winter approaches. Distillate stockpiles, which include diesel and heating oil, fell by 4.9 million barrels to 106.1 million barrels, their lowest since May, versus expectations for a 2 million-barrel drop, according to the U.S. Energy Information Administration on Thursday. This comes amid a larger-than-expected surge in U.S. crude oil in storage, along with a rise in gasoline stocks. Crude inventories grew by 9.9 million barrels in the week to Oct. 7 to 439.1 million barrels, added the EIA, far larger than analysts' expectations in a Reuters poll for a 1.8 million-barrel rise.

 

 
Intraday RESISTANCE LEVELS
14th 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
EURO/USD 0.9800-0.9860 0.9910 0.9995-1.0105
GBP/USD 1.1295-1.1370 1.1455 1.1495-1.1550
USD/JPY 148.00 148.90-149.50 150.00

Intraday SUPPORTS LEVELS
14th 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 85.0-83.70 83.00-81.60
EURO/USD 0.9740-0.9680 0.9610-0.9530 0.9440-0.9400
GBP/USD 1.1260-1.1150 1.1100 1.1020-1.0980
USD/JPY 147.50-146.90 145.95-145.30 144.00-143.10

Intra-Day Strategy (14th 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$1682.34/oz and low of $1642.36/oz. Gold is down by 0.426% at US$1666.18/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 Thursday made its intraday high of US$19.30/oz and low of US18.44/oz settled down by 0.838% at US$18.87/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 Thursday made an intra‐day high of US$88.46/bbl, an intraday low of US$84.49/bbl, and settled up by 2.425% to close at US$88.09/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 87.90-94.00 with stop loss at 94.00; targeting 87.90-92.10-91.30-89.40 and 88.50-87.90-86.00. Buy above 86.00-81.60 with risk daily closing below 81.60; targeting 87.90-88.50-89.40 and 91.30-92.60-93.20.

 
Intraday Support Levels
S1     87.90-85.85
S2     85.0-83.70
S3     83.00-81.60

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   53.852 Sell
20-DMA   86.11 Sell
50-DMA   88.05 Sell
100-DMA   91.72 Sell
200-DMA   91.63 Sell
STOCH(5,3)   34.344 Sell
MACD(12,26,9)   -0.1820 Buy

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$0.9631/EUR, a high of US$0.9805/EUR, and settled the day down by 0.717% to close at US$0.9770/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     0.9740-0.9680
S2     0.9610-0.9530
S3     0.9440-0.9400

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   44.418 Buy
20-DMA   0.9852 Sell
50-DMA   0.9934 Sell
100-DMA   1.0140 Sell
200-DMA   1.0485 Sell
STOCH(5,3)   34.552 Buy
MACD(12,26,9)   -0.0057 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.1056/GBP, a high of US$1.1380/GBP, and settled the day up 2.01% to close at US$1.1318/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 1.1260-1.0760 with a target of 1.1295-1.1370-1.1395 and 1.1455-1.1495-1.1550 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     1.1260-1.1150
S2     1.1100
S3     1.1020-1.0980

Intraday Resistance Levels
R1     1.1295-1.1370
R2     1.1455
R3     1.1495-1.1550

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

49.995

Buy
20-DMA   1.1216 Sell
50-DMA   1.1456 Sell
100-DMA   1.1796 Sell
200-DMA   1.2271 Sell
STOCH(5,3)   65.042 Sell
MACD(12,26,9)   -0.0083 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made an intra‐day low of JPY146.44/USD and made an intraday high of JPY147.669/USD and settled the day up by 0.111% at JPY147.06/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 148.00-150.00 with risk above 150.00 targeting 147.50-146.90-145.95 and 145.30-144.70-143.10. Long positions above 147.50-143.00 with targets of 148.00-148.90-149.50 and 150.00-150.60 with stops below 143.00.

 
Intraday Support Levels
S1     147.50-146.90
S2     145.95-145.30
S3     144.00-143.10

INTRADAY RESISTANCE LEVELS
R1     148.00
R2     148.90-149.50
R3     150.00

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
AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING