AAFX TRADING

Daily Market Lookup

  • The U.S. dollar edged higher in early European trading Wednesday, bouncing from a two-week low, while sterling slipped back after U.K. inflation jumped to a 40-year high. Risk sentiment has been on the rise of late, helped by the reversal of the U.K.’s ill-fated unfunded tax-cutting plans, solid corporate earnings boosting equity markets, and warmer weather helping European gas prices drop. Breaking through the 145 level about a month ago prompted the Japanese authorities to intervene in support of the beleaguered yen, and the market is currently on full intervention watch. Local Japanese media reported Finance Minister Shunichi Suzuki as saying earlier Wednesday that he was checking currency rates "meticulously" and with more frequency. U.K. inflation accelerated more than expected in September, with the consumer price index climbing to 10.1% on an annual basis, matching a 40-year high reached in July. While this number will increase the pressure on the Bank of England to continue tightening monetary policy, it also shows that household incomes will stay squeezed, likely leading to an economic slowdown as the year progresses. The September Eurozone CPI release is due later in the session, and, like its British counterpart, is expected to have climbed to double digits on an annual basis. The European Central Bank meets on Thursday next week, and is widely expected to lift its key interest rates by 75 basis points. This would match its hike in September, after it started its tightening path with a 50 basis points hike in July.
  • The dollar held close to a 32-year peak versus the yen on Wednesday while edging up from a two-week trough against a basket of major peers, underpinned by the prospect of aggressive U.S. Federal Reserve interest rate hikes. Sterling consolidated in the middle of its trading range this week following the Bank of England's decision not to sell any longer-duration gilts this year, while denying a Financial Times report that it would delay quantitative tightening. The euro slipped back from near a two-week top. Traders are on high alert for the Ministry of Finance and Bank of Japan to step into the market again, as the currency pair pushes toward the key psychological barrier at 150. A cross of 145 a month ago spurred the first yen-buying intervention since 1998. Japanese Finance Minister Shunichi Suzuki said on Wednesday that he was checking currency rates "meticulously" and with more frequency, local media reported. The greenback, which currently reigns as the safe-haven currency of choice, has sagged this week amid the bear rally in equities globally following some upbeat earnings. But underlying support continues to come from market pricing for two more 75 basis point hikes from the Fed this year as it focuses on red-hot inflation, even at the risk of sparking a recession. Fiscal uncertainty in Britain is also clouding the outlook for markets globally. Meanwhile, sterling was little changed at $1.1318, licking its wounds after a 0.34% decline in the previous session. The currency initially climbed on Tuesday following a Financial Times report that the Bank of England would delay quantitative tightening, only to slide after the Bank called the article "inaccurate." The BoE said it would start selling some of its huge stock of British government bonds from Nov. 1, but would not sell this year any longer-duration gilts that have been at the center of market volatility in the wake of the government's "mini budget" fiasco. Economists in a Reuters poll predict another 75 basis-point rate hike from the European Central Bank on Thursday of next week.
  • Oil prices climbed on Wednesday, paring losses from the previous session, as investors jumped into riskier assets such as commodities amid gains in broader equity markets and on signs of renewed demand from top oil importer China. In the previous session, Brent fell by 1.7% and WTI by 3.1% to their lowest in two weeks on reports of U.S. President Joe Biden's plans to release more barrels from the Strategic Petroleum Reserve (SPR). Oil prices were also buoyed as risk sentiment was lifted by upbeat U.S. corporate earnings and rising equity markets Prices were also supported on signs of resurgent Chinese demand. Private mega refiner Zhejiang Petrochemical Corp (ZPC) won additional crude oil import quota for 2022 of 10 million tonnes and state-run ChemChina received a further quota of 4.28 million tonnes. That is equal to about 104 million barrels. The pending European Union ban on Russian crude and oil products and the output cut from the Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia, a group known as OPEC+, of 2 million barrels per day also kept prices strong. The OPEC+ cut and EU embargo will squeeze supply in an already tight market. The EU's sanctions on Russian crude and oil products will take effect in December and February, respectively. To plug the gap, President Biden will announce a plan later on Wednesday to sell off the remainder of his release from the SPR and detail a strategy to refill the stockpile when prices drop, a senior administration official said. In December, the administration plans to sell 15 million barrels of oil from its reserves, the final tranche of the 180 million barrels release announced earlier this year, a senior U.S. official said. U.S. crude oil stockpiles fell by about 1.3 million barrels for the week ended Oct. 14, according to market sources citing American Petroleum Institute figures on Tuesday. Gasoline inventories declined by about 2.2 million barrels while distillate stockpiles dropped by 1.1 million, the sources said. U.S. crude inventories were expected to have increased for a second consecutive week, rising by 1.4 million barrels in the week to Oct. 14, an extended Reuters poll showed on Tuesday. Inventory data from the Energy Information Administration, the statistical arm of the U.S. Department of Energy, is due at 10:30 a.m. (1430 GMT) on Wednesday.

 

 
Intraday RESISTANCE LEVELS
19th October 2022 R1 R2 R3
GOLD-XAU 1,640-1,651 1,660-1,670 1,679-1,690
Silver-XAG 18.90-19.60 20.10-20.60 21.30-21.90
Crude Oil 83.00-83.70 85.85-87.90 88.50-89.40
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 149.50-150.00 150.40 151.00-151.70

Intraday SUPPORTS LEVELS
19th October 2022 S1 S2 S3
GOLD-XAU 1,634-1,628 1,614 1,600-1,590
Silver-XAG 18.30-17.80 17.50 17.10-16.60
Crude Oil 81.60-80.85 80.00 79.10-78.60
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 149.00-148.00 147.50-146.90 145.95-145.30

Intra-Day Strategy (19th 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 Tuesday made its intraday high of US$1660.79/oz and low of $1645.78/oz. Gold is up by 0.0902% at US$1651.89/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 1640-1714 keeping stop loss closing above 1714, targeting 1660-1651-1640 and 1628-1614. Buy in between 1634-1600 with risk below 1600, targeting 1670-1679-1690 and 1700-1714-1732.

 
Intraday Support Levels
S1     1,634-1,628
S2     1,614
S3     1,600-1,590
Intraday Resistance Levels
R1     1,640-1,651
R2     1,660-1,670
R3     1,679-1,690

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 Tuesday made an intra‐day high of US$85.42/bbl, an intraday low of US$81.24/bbl, and settled down by 2.332% to close at US$82.84/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 83.00-89.40 with stop loss at 90.00; targeting 81.60-80.85-80.00 and 79.10-78.60. Buy above 81.60-78.60 with risk daily closing below 78.60; targeting 83.00-83.70-85.90 an 87.90-88.50-89.40.

 
Intraday Support Levels
S1     81.60-80.85
S2     80.00
S3     79.10-78.60

Intraday Resistance Levels
R1     83.00-83.70
R2     85.85-87.90
R3     88.50-89.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   44.576 Sell
20-DMA   85.14 Sell
50-DMA   87.40 Sell
100-DMA   91.17 Sell
200-DMA   91.35 Sell
STOCH(5,3)   Sell
MACD(12,26,9)   -0.1820 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$0.9812/EUR, a high of US$0.9875/EUR, and settled the day up by 0.1667% to close at US$0.9850/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 Tuesday made an intra‐day low of US$1.1255/GBP, a high of US$1.1409/GBP, and settled the day down 0.317% to close at US$1.1311/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 JPY148.12/USD and made an intraday high of JPY149.38/USD and settled the day up by 0.150% at JPY149.24/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     149.00-148.00
S2     147.50-146.90
S3     145.95-145.30

INTRADAY RESISTANCE LEVELS
R1     149.50-150.00
R2     150.40
R3     151.00-151.70

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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