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.
  • 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.
  • Gold prices fell on Friday and were set to end the week lower as a spike in U.S. Treasury yields rattled markets, while copper prices trimmed some of their losses for the week after major commodity trader Trafigura warned of a severe shortage of the red metal. 10-Year U.S. Treasury yields jumped 2.2% overnight and were at their highest level since the 2008 financial crisis as expectations grew that the Fed will hike rates sharply in November. This also kept the dollar underpinned, although the greenback was set for a mild weekly loss. Bullion prices fell sharply this year, recently hitting a two-year low as rising interest rates across most of the globe drove up the opportunity cost of holding gold. The outlook for the yellow metal is also dimmed by expectations that central banks will continue to raise interest rates in their fight against inflation. Markets are pricing in a nearly 100% chance that the Fed will hike rates by 75 basis points when it meets in November. Members of the central bank also recently warned that interest rates could rise far more than expected if inflation does not cool in time. Among industrial metals, copper prices fell in volatile trade as markets weighed weakening economic trends against the prospect of a supply shortfall.
  • Oil prices fell on Friday after a warning on economic growth from the Federal Reserve, but were still set to end the week higher on positive signals from China and on the prospect of tightening supply in the coming months. Crude prices fell sharply from intraday highs on Thursday, settling only slightly higher after Philadelphia Fed President Patrick Harker said the central bank is actively trying to slow the economy, in order to combat rising inflation. His comments came as a confirmation of sorts that the U.S. is likely to see a recession due to rising interest rates, which could dent crude demand. Rising U.S. interest rates and stubbornly high inflation have roiled crude markets this year, as traders feared a slowdown in the world’s largest economy. But data this week showed that U.S. crude has remained steady in recent weeks. U.S. oil inventories unexpectedly fell last week, with supply, particularly of gasoline, remaining tight in the country. Markets also largely disregarded U.S. President Joe Biden’s plan to release about 15 million barrels of oil from the Strategic Petroleum Reserve, as the ensuing rise in supply will be largely offset by a 2 million barrel per day production cut by the Organization of Petroleum Exporting Countries and allies (OPEC+). Several members of the cartel also voiced support for the production cut earlier this week, providing positive cues to oil markets. In another positive signal for crude prices, reports that China was scaling back some quarantine measures brewed optimism over improving demand in the world’s largest oil importer. But markets remained wary towards the country, especially after President Xi Jinping said Beijing has no plans to soften its strict zero-COVID policy. Traders are also waiting to see how the country’s economy performed in the third quarter, after the government indefinitely delayed the release of the GDP data.

 

 
Intraday RESISTANCE LEVELS
21st 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 1.1210-1.1295 1.1370-1.1455 1.1495-1.1550
USD/JPY 149.50-150.00 150.40 151.00-151.70

Intraday SUPPORTS LEVELS
21st 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 1.1150 1.1100 1.1020-1.0980
USD/JPY 149.50-148.00 147.50-146.90 145.95-145.30

Intra-Day Strategy (21st 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$1645.56/oz and low of $1622.38/oz. Gold is down by 0.0626% at US$1628.07/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 1611-1581 with risk below 1581, 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 Thursday made its intraday high of US$18.99/oz and low of US18.22/oz settled up by 1.396% at US$18.66/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 Thursday made an intra‐day high of US$86.90/bbl, an intraday low of US$83.97/bbl, and settled up by 0.179% to close at US$84.79/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 Thursday made an intraday low of US$0.9754/EUR, a high of US$0.9845/EUR, and settled the day down by 0.117% to close at US$0.9783/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 Thursday made an intra‐day low of US$1.1170/GBP, a high of US$1.1336/GBP, and settled the day up 0.132% to close at US$1.1227/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     1.1150
S2     1.1100
S3     1.1020-1.0980

Intraday Resistance Levels
R1     1.1210-1.1295
R2     1.1370-1.1455
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 JPY149.54/USD and made an intraday high of JPY150.28/USD and settled the day up by 0.171% at JPY150.13/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 150.00-151.70 with risk above 151.70 targeting 149.50-18.00-147.50 and 146.90-145.95-145.30. Long positions above 149.50-143.00 with targets of 148.00-148.90-149.50 and 150.00-150.60 with stops below 143.00.

 
Intraday Support Levels
S1     149.50-148.00
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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