AAFX TRADING

Daily Market Lookup

  • Sterling inched cautiously higher following British Prime Minister Liz Truss's partial reversal of her government's economic plan, while the yen was pinned near a 32-year low as markets awaited signs of intervention from Japanese authorities. The news came hours after she sacked former finance minister Kwasi Kwarteng, with Jeremy Hunt replacing him. Hunt, a former foreign and health minister, has promised to win back Britain's economic credibility by fully accounting for the government's tax and spending plans, while insisting his boss Liz Truss remained in charge of the country. British lawmakers will try to oust Truss this week despite Downing Street's warning that it could trigger a general election, the Daily Mail reported. Investors are now anxiously waiting to see what's next for UK government bonds, after the Bank of England on Friday concluded its emergency gilt market support. Japanese authorities kept up their warnings to the market on Monday of a firm response to overly rapid yen declines, after last week's fall and meetings of global financial leaders that acknowledged currency volatility. Japan last month intervened to buy the yen for the first time since 1998, after the Bank of Japan stuck with ultra-low interest rates, which prompted the yen's slide to 145.90 per dollar. Elsewhere, the dollar eased slightly on Monday, providing some respite to the euro, the Aussie and the kiwi. Last week's red-hot U.S. inflation print has reinforced bets of another aggressive rate hike at the next FOMC meeting, with markets pricing in a 90.9% chance of a 75 basis point rate hike, and a 9.1% chance of a 100 bp increase. China's state banks stepped up their intervention to defend a weakening yuan on Monday, with banking sources telling Reuters these banks sold a high volume of U.S. dollars and used a combination of swaps and spot trades.
  • Bank of Japan Deputy Governor Masazumi Wakatabe said on Saturday the yen's recent fluctuations were "clearly too rapid and too one-sided," signalling caution over the potential economic damage from the currency's slump to 32-year lows against the dollar. Wakatabe, speaking in a seminar during the IMF and World Bank annual meetings in Washington, also said Japan's government has made clear there was no discrepancy or inconsistency between its efforts to tame excessive yen declines, and the BOJ's ultra-easy monetary policy aimed at achieving its 2% inflation target. He pointed to the Japanese leader's recent remarks to the Financial Times that the BOJ needed to maintain its ultra-loose policy until wages went higher. When asked about the yen's recent sharp declines, the BOJ deputy governor said: "When it comes to foreign exchange fluctuations right now, it's clearly too rapid and too one-sided." Under Japanese law, the Ministry of Finance, not the BOJ, has jurisdiction over exchange-rate policy. Japan intervened in the currency market last month to arrest sharp yen drops, which were driven largely by the policy divergence between aggressive U.S. interest rate hikes and the BOJ's resolve to keep monetary policy ultra-loose. Wakatabe said the BOJ must maintain ultra-loose monetary policy because wage growth remains weak and inflation expectations, while rising, have yet to be firmly anchored around its 2% inflation target. The BOJ remains an outlier among the world's central banks, many of which are tightening monetary policy to combat soaring inflation, as it focuses on underpinning a fragile economic recovery.
  • Oil prices rose on Monday after China rolled over liquidity measures to help its pandemic-hit economy, igniting hopes for a better fuel demand outlook from the world's top crude importer. China's central bank rolled over maturing medium-term policy loans while keeping the interest rate unchanged for a second month on Monday. Analysts said the full rollover is a signal that the central bank would continue to maintain loose monetary policy. The country also vowed to greatly increase domestic energy supply capacity and step up risk controls in key commodities including coal, oil and gas, and electricity, a senior National Energy Administration official said on Monday. China will further increase reserve capacities for key commodities, another state official told a news conference in Beijing. Oil found support from a combination of factors, including Chinese President Xi Jinping's comments at the Party Congress that reassured accommodative policies for the economy, a positive sign for demand outlook, CMC Markets analyst Tina Teng said. China is expected to release trade and economic data this week. Although its third-quarter GDP growth could rebound from the previous quarter, President Xi's stringent COVID-19 policy has the world's No. 2 economy facing what will most likely be its worst performing year in almost half a century. Looking ahead, oil prices are expected to remain volatile as production cuts by OPEC+ will tighten supplies ahead of the European Union embargo on Russian oil, while a strong U.S. dollar and further interest rate increases from the U.S. Federal Reserve limit price gains. St. Louis Fed President James Bullard said on Friday inflation had become "pernicious" and difficult to arrest, and warranted continued "frontloading" through larger increases of three-quarters of a percentage point. Member states of the Organization of the Production Exporting Countries and their allies, including Russia, lined up on Sunday to endorse the steep production cut agreed to this month after the White House, stepping up a war of words with Saudi Arabia, accused Riyadh of coercing other nations into supporting the move. OPEC+ pledged on Oct. 5 to cut output by 2 million barrels per day, which will lead to an actual drop of about 1 million bpd as some members are already producing below their targets. Despite this, top exporter Saudi Arabia will keep exports to key Asia markets steady in November.

 

 
Intraday RESISTANCE LEVELS
17th October 2022 R1 R2 R3
GOLD-XAU 1,660-1,670 1,679-1,690 1,700-1,714
Silver-XAG 18.90-19.60 20.10-20.60 21.30-21.90
Crude Oil 87.90-85.85 88.50-89.40 91.30-92.60
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
17th October 2022 S1 S2 S3
GOLD-XAU 1,651 1,640 1,628-1,614
Silver-XAG 18.30-17.80 17.50 17.10-16.60
Crude Oil 85.00-83.70 83.00-81.60 80.75-80.00
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 (17th 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 Friday made its intraday high of US$1671.68/oz and low of $1640.13/oz. Gold is down by 1.347% at US$1643.73/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     1,651
S2     1,640
S3     1,628-1,614
Intraday Resistance Levels
R1     1,660-1,670
R2     1,679-1,690
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 Friday made its intraday high of US$19.06/oz and low of US18.08/oz settled down by 3.299% at US$18.25/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 18.30-17.10, targeting 18.90-19.60-20.10 and 20.60-21.45-22.00 with stop loss should be placed on the breakage below 17.10. Sell in between 18.90-23.40 with stop loss above 23.40; targeting 18.30-17.90 and 17.50-17.10.

 
Intraday  Support Levels
S1     18.30-17.80
S2     17.50
S3     17.10-16.60

Intraday  Resistance Levels
R1     18.90-19.60
R2     20.10-20.60
R3     21.30-21.90

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 Friday made an intra‐day high of US$88.54/bbl, an intraday low of US$84.25/bbl, and settled down by 3.98% to close at US$84.56/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 85.00-81.60 with risk daily closing below 81.60; targeting 86.00-87.90-88.50-89.40 and 91.30-92.60-93.20.

 
Intraday Support Levels
S1     85.00-83.70
S2     83.00-81.60
S3     80.75-80.00

Intraday Resistance Levels
R1     87.90-85.85
R2     88.50-89.40
R3     91.30-92.60

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 Friday made an intraday low of US$0.9631/EUR, a high of US$0.9808/EUR, and settled the day down by 0.717% to close at US$0.9720/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 0.9780-1.0105, 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 Friday made an intra‐day low of US$1.1151/GBP, a high of US$1.1365/GBP, and settled the day down 1.498% to close at US$1.1177/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 JPY147.05/USD and made an intraday high of JPY148.85/USD and settled the day up by 1.132% at JPY144.74/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
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