AAFX TRADING

Daily Market Lookup

  • The dollar lost ground against sterling and other major peers on Tuesday as investor sentiment picked up following the UK's dramatic U-turn over the tax-slashing mini budget that had roiled global markets. The British pound extended gains following a media report that the Bank of England is set to delay quantitative tightening until bond markets calm. The yen pulled away from a fresh 32-year trough to the dollar marked late in the overnight session, while rhe risk-sensitive New Zealand dollar, already lifted by hotter-than-expected consumer inflation data, extended its surge to more than 1%. The Financial Times reported that the BoE is likely to delay the sale of billions of pounds of government bonds, in a bid to encourage greater stability in gilt markets. That's after Jeremy Hunt, who was appointed finance minister by Prime Minister Liz Truss on Friday, reversed swathes of the 45-billion pound "mini-budget" that sent sterling crashing to record lows. The U.S. dollar index - which measures the greenback against six major peers, including sterling, the euro and the yen - sagged 0.21% to 111.85, the lowest level since Oct. 6. The UK news saw the currency extend gains from a report that showed consumer inflation continued to hover near three-decade highs in the third quarter, boosting bets for further rate hikes. It also got new life from developments in Britain, after receiving a short-lived boost in the Asian morning after minutes from the Reserve Bank's last meeting showed the decision to slow the pace of rate hikes was "finely balanced." The central bank's deputy governor Michele Bullock reinforced that by saying in a speech on Tuesday that the RBA can keep pace with tightening by global peers.
  • Gold prices moved little on Tuesday, hovering around key support levels as the dollar retreated from recent highs, while uncertainty over weakening metal demand in China weighed on copper. Bullion prices benefited from a weakening dollar, as a slew of strong earnings on Wall Street boosted risk appetite and encouraged traders to move away from the greenback. But risk-heavy assets like stocks and foreign exchange were the bigger benefiters from this trend. Better-than-expected earnings reports from major Wall Street firms also spurred heavy bargain buying, after stock markets plummeted last week. But the outlook for gold remains under pressure from the prospect of rising U.S. interest rates, especially with inflation remaining stubbornly near 40-year highs. The Federal Reserve has also signaled that rates will end the year at higher levels than those seen during the 2008 financial crisis, amid a worsening economic outlook. Markets are pricing in a nearly 100% possibility that the Fed will hike rates by 75 basis points in November, its third such consecutive hike. Gold prices suffered steep losses this year, recently hitting near two-year lows as rising U.S. interest rates pushed up the opportunity cost of holding the yellow metal. Most other precious metals also saw similar losses, with the dollar taking the lion’s share of safe haven demand. Among industrial metals, copper prices fell for a second consecutive day amid increasing signs of slowing demand in China, the top importer of the red metal. China recently signaled that it has no intention of phasing out its zero-COVID policy, which has severely disrupted manufacturing activity this year. The move brewed more uncertainty over the future of the world’s second-largest economy. But the country also maintained its accommodative monetary policy stance, while outlining more stimulus measures to help support growth. These measures, coupled with signs of tightening copper markets, could help prices of the red metal recover this year.
  • Oil prices climbed on Tuesday, bolstered by a weaker U.S. dollar and supply woes, although gains were capped by the spectre of lower fuel demand from China as it persists with its stringent zero-COVID policy. The U.S. dollar index - which measures the greenback against six major peers including sterling - sagged to its lowest since Oct. 6. A weaker dollar makes oil cheaper for buyers holding other currencies, making them more likely to make purchases. Following the steep production cut agreed on by OPEC+ - the Organization of the Production Exporting Countries (OPEC) and its allies, including Russia - earlier this month, investors have been seen increasing their long positions in futures, ANZ Research analysts said in a note. OPEC+ member states have been lining up to endorse the cut to the output target after the White House accused Riyadh of coercing some other nations into supporting the move. Meanwhile, expectations that China will stick to a loose monetary policy to help its economy, hobbled by COVID-19 restrictions, lent some support to oil prices. The country's central bank rolled over maturing medium-term policy loans on Monday while keeping its key interest rate unchanged for a second month. China's fuel demand outlook, however, weighed on sentiment after the world's top crude oil importer delayed the release of its economic indicators, originally scheduled to be out on Tuesday, CMC Markets analyst Tina Teng said. No date for a rescheduled release has been given. China's adherence to its zero-COVID policy has continued to increase the uncertainties about the country's economic growth, Teng said. On the supply side, U.S. crude oil stocks were expected to have risen a second consecutive week and are estimated to have increased by 1.6 million barrels in the week to Oct. 14, a preliminary Reuters poll showed on Monday. Output in the Permian Basin of Texas and New Mexico, the biggest U.S. shale oil basin, is forecast to rise by about 50,000 barrels per day (bpd) to a record 5.453 million bpd this month, the Energy Information Administration said.

 

 
Intraday RESISTANCE LEVELS
18th 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 0.9860-0.9910 0.9970-0.9995 1.0105-1.0129
GBP/USD 1.1295-1.1370 1.1455 1.1495-1.1550
USD/JPY 149.00-149.50 150.00 150.40-151.00

Intraday SUPPORTS LEVELS
18th October 2022 S1 S2 S3
GOLD-XAU 1,651-1,640 1,628 1,614-1,600
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 0.9800-0.9740 0.9680-0.9610 0.9530-0.9440
GBP/USD 1.1260-1.1150 1.1100 1.1020-1.0980
USD/JPY 148.00-147.50 146.90 145.95-145.30

Intra-Day Strategy (18th 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$1668.36/oz and low of $1643.52/oz. Gold is up by 0.301% at US$1650.52/oz.

Technicals in Focus:

In daily charts, prices are above 200DMA (1809) and breakage below will call for 1790. MACD is above the zero line and histograms are a2lso increasing trend and it will bring an upward stance in the upcoming sessions. RSI is in the overbought region and more upside is expected before it gets stretched. The Stochastic Oscillator is in neutral territory and giving a negative crossover to a 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     1,651-1,640
S2     1,628
S3     1,614-1,600
Intraday Resistance Levels
R1     1,660-1,670
R2     1,679-1,690
R3     1,700-1,714

Technical Indicators

Name   Value Action
14DRSI  

42.239

Buy
20-DMA   1674.11 Sell
50-DMA  

1700.30

Sell
100-DMA   1738.67 Sell
200-DMA   1776.79 Sell
STOCH(5,3)   19.774 Sell
MACD(12,26,9)   -11.386 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$18.93/oz and low of US18.22/oz settled up by 2.34% at US$18.65/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   44.858 Buy
20-DMA   19.23 Buy
50-DMA   19.38 Sell
100-DMA   19.99 Sell
200-DMA   21.11 Sell
STOCH(5,3)   29.110 Sell
MACD(12,26,9)   -0.112 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US$86.14/bbl, an intraday low of US$83.68/bbl, and settled up by 0.202% to close at US$84.69/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 Monday made an intraday low of US$0.9718/EUR, a high of US$0.9851/EUR, and settled the day up by 1.1624% to close at US$0.9833/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     0.9800-0.9740
S2     0.9680-0.9610
S3     0.9530-0.9440

Intraday  Resistance Levels
R1     0.9860-0.9910
R2     0.9970-0.9995
R3     1.0105-1.0129

TECHNICAL INDICATORS
Name   Value Action
14DRSI   52.142 Buy
20-DMA   0.9810 Sell
50-DMA   0.9926 Sell
100-DMA   1.0128 Sell
200-DMA   1.0472 Sell
STOCH(5,3)   83.1284 Buy
MACD(12,26,9)   -0.0041 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.1207/GBP, a high of US$1.1439/GBP, and settled the day up 1.134% to close at US$1.1357/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 Monday made an intra‐day low of JPY148.38/USD and made an intraday high of JPY149.02/USD and settled the day up by 0.315% at JPY149.02/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 149.00-151.00 with risk above 150.00 targeting 147.50-146.90-145.95 and 145.30-144.70-143.10. Long positions above 149.00-143.00 with targets of 148.00-148.90-149.50 and 150.00-150.60 with stops below 143.00.

 
Intraday Support Levels
S1     148.00-147.50
S2     146.90
S3     145.95-145.30

INTRADAY RESISTANCE LEVELS
R1     149.00-149.50
R2     150.00
R3     150.40-151.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   76.219 Buy
20-DMA   145.69 Buy
50-DMA   142.50 Buy
100-DMA   138.34 Buy
200-DMA   131.89 Buy
STOCH(9,6)   96.312 Buy
MACD(12,26,9)   1.805 Sell

AAFX TRADING
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