AAFX TRADING

Daily Market Lookup

  • The U.S. dollar handed back some of its gains in early European trading Wednesday, while the euro rose on the back of soaring German producer prices. The U.S. Federal Reserve is widely expected to continue its aggressive interest rate hikes at its next meeting in early November, as it attempts to curb red-hot inflation. Federal Reserve Bank of Chicago President Charles Evans emphasized the need for further action in a speech on Wednesday, saying "making sure that we've got monetary policy at a sufficiently restrictive stance so that we're not inducing inflation -- we're trying to get it down -- that's the objective at the moment." Japanese authorities intervened in the foreign exchange market last month to buy yen for the first time since 1998, at around the 145 level. The numbers show sustained inflationary pressure in the economic pipeline and add to the pressure on the European Central Bank to keep raising interest rates despite the obvious slowdown in the Eurozone economy. The ECB should lift borrowing costs by 75 basis points at its next two meetings in October and December, Governing Council member Boštjan Vasle said Wednesday in an interview. Braverman criticized the leadership of new Prime Minister Liz Truss, increasing the uncertainty over the length of new tenure in the wake of her ill-fated tax-cutting program. China's central bank kept two key lending rates unchanged on Thursday for a second consecutive month, after an unexpected cut in August, as it grapples with slowing economic growth and a severely weakened yuan.
  • The dollar loomed over major peers on Thursday as Treasury yields peaked at multi-year highs, while the yen slid to a fresh 32-year low and kept markets on high alert for any signs of an intervention. The surging greenback also pushed the Chinese offshore yuan to a record low in Asia, though it later trimmed intraday losses on a report of a potential reduction in COVID quarantine time for visitors. Last month, Japan intervened in the foreign exchange market to buy yen for the first time since 1998, in an attempt to shore up the battered currency. China is considering a cut in the duration of quarantine for inbound visitors from 10 days to seven days, Bloomberg News reported on Thursday, citing people familiar with the matter. Sterling was marginally up 0.01% at $1.12245, little helped by September's double-digit inflation print, firming bets for more aggressive rate hikes from the Bank of England. But the pound was not out of the woods yet as political turmoil continues, with the latest quitting of Britain's interior minister adding to the uncertainty. Still, this week's scorching inflation prints from Britain, New Zealand and Canada show that central banks across the globe are far from taming decades-high inflation, even at the expense of stifling growth. Overnight, Fed officials also continued their hawkish rhetoric, as Federal Reserve Bank of Minneapolis President Neel Kashkari said that U.S. job market demand remains strong and underlying inflation pressures probably have not peaked yet.
  • Gold prices stalled near a three-week low on Thursday, as higher U.S. Treasury yields and fears of more sharp rate hikes by the Federal Reserve dampened investor appetite for the metal. The dollar index ticked 0.1% lower, alleviating some pressure off the greenback-priced bullion. Meanwhile, benchmark 10-year Treasury yields held near their highest since mid-2008. While gold is often considered a hedge against inflation and economic turmoil, rising U.S. interest rates have increased the opportunity cost of holding the zero-yielding metal, which has fallen nearly 11% so far in the year. The Fed's "Beige Book" survey showed U.S. economic activity expanded modestly in recent weeks, although it was flat in some regions and declined in a couple of others, while firms noted that price pressures remained elevated. The report did little to temper expectations for a fourth straight 75-basis-point Fed rate hike in November. Gold might consolidate above the $1,600 level, with the U.S. core personal consumption expenditures data due next week being the next major inflection point, said Ilya Spivak, a currency strategist at DailyFX.
  • Oil prices gained around $1 on Thursday as investor sentiment rose on news that China is considering a cut in the duration of quarantine for inbound visitors China, the world's largest crude importer, has stuck to strict COVID-19 curbs this year, weighing heavily on business and economic activity which lowers demand for fuel. Bloomberg news reported on Thursday that China is considering cutting the quarantine period for inbound visitors to seven days from 10 days, citing people familiar with the matter. The report said officials are targeting a cut in the quarantine period to two days in a hotel and then five days at home, but there is no clarity yet on how the new restrictions would apply to foreigners and other visitors without a residence in China. Innes, however, cautioned that China's zero-Covid policy is likely to stay in place "at least through Q1" next year, and maintains a bullish view on oil. Oil prices have seen support from a looming European Union ban on Russian crude and oil products, as well as the output cut from the Organization of the Petroleum Exporting Countries and other producers including Russia, known as OPEC+. The OPEC+ agreed on a production cut of 2 million barrels per day in early October - but analysts expect a smaller decline in actual output of about 1 million barrels per day due to under-production in countries such as Iran, Venezuela and Nigeria. Separately, U.S. President Joe Biden announced a plan on Wednesday to sell off the rest of his release from the nation's emergency oil reserve by year's end, or 15 million barrels of oil, and begin refilling the stockpile as he tries to dampen high gasoline prices ahead of midterm elections on Nov. 8. Meanwhile, global demand for fuel remains uncertain. U.S. economic activity expanded modestly in recent weeks, although it was flat in some regions and declined in a couple of others, the Federal Reserve said on Wednesday in a report that showed firms growing more pessimistic about the outlook.

 

 
Intraday RESISTANCE LEVELS
20th October 2022 R1 R2 R3
GOLD-XAU 1,634-1,640 1,651-1,660 1,670-1,679
Silver-XAG 18.90-19.60 20.10-20.60 21.30-21.90
Crude Oil 85.85-87.90 88.50-89.40 90.30-91.10
EURO/USD 0.9800-0.9860 0.9910-0.9970 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
20th October 2022 S1 S2 S3
GOLD-XAU 1,627-1614 1,600 1,590-1,581
Silver-XAG 18.30-17.80 17.50 17.10-16.60
Crude Oil 83.70-83.00 81.60 80.85-80.00
EURO/USD 0.9740 0.9680-0.9610 0.9530-0.9440
GBP/USD 1.1210-1.1150 1.1100 1.1020-1.0980
USD/JPY 149.00-148.00 147.50-146.90 145.95-145.30

Intra-Day Strategy (20th 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 Wednesday made its intraday high of US$1654.37/oz and low of $1627.63/oz. Gold is down by 1.38% at US$1628.97/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 1634-1714 keeping stop loss closing above 1714, targeting 1628-1614-1600 and 1590-1581. Buy in between 1624-1590 with risk below 1590, targeting 1634-1640-1651 and 1670-1679-1690.

 
Intraday Support Levels
S1     1,627-1614
S2     1,600
S3     1,590-1,581
Intraday Resistance Levels
R1     1,634-1,640
R2     1,651-1,660
R3     1,670-1,679

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 Tuesday made its intraday high of US$18.80/oz and low of US18.35/oz settled down by 1.543% at US$18.43/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 Wednesday made an intra‐day high of US$85.88/bbl, an intraday low of US$81.61/bbl, and settled up by 2.302% to close at US$84.64/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 85.85-89.40 with stop loss at 90.00; targeting 83.70-83.00-81.60 and 80.85-80.00-79.10. Buy above 83.70-78.60 with risk daily closing below 78.60; targeting 85.90 an 87.90-88.50-89.40.

 
Intraday Support Levels
S1     83.70-83.00
S2     81.60
S3     80.85-80.00

Intraday Resistance Levels
R1     85.85-87.90
R2     88.50-89.40
R3     90.30-91.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.231 Sell
20-DMA   85.36 Sell
50-DMA   87.40 Sell
100-DMA   91.10 Sell
200-DMA   91.32 Sell
STOCH(5,3)   42.825 Sell
MACD(12,26,9)   -0.1820 Buy

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$0.9757/EUR, a high of US$0.9871/EUR, and settled the day down by 0.785% to close at US$0.9772/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
S2     0.9680-0.9610
S3     0.9530-0.9440

Intraday  Resistance Levels
R1     0.9800-0.9860
R2     0.9910-0.9970
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 Wednesday made an intra‐day low of US$1.1184/GBP, a high of US$1.1356/GBP, and settled the day down 0.872% to close at US$1.1213/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 1.1210-1.0760 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 1.1295-1.1410 with targets at 1.1210-1.1150-1.0995 and 1.0910-1.0800-1.0710 with stop loss should be 1.1450.

 
Intraday Support Levels
S1     1.1210-1.1150
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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