AAFX TRADING

Daily Market Lookup

  • The U.S. dollar edged higher in early European trading Monday, absorbing suspected intervention by the Bank of Japan, while sterling pushed higher as former finance minister Rishi Sunak looked likely to become Britain's prime minister. A lot of the overnight action in the foreign exchange markets centered around the USD/JPY pair. The Financial Times reported the Bank of Japan may have sold at least $30 billion on Friday in an effort to support the yen, and the pair’s volatile movements early Monday action strongly suggested that the Japanese authorities had been in again. USD/JPY fell from a high of 149.68 to 145.28 within minutes, in a move that suggested intervention, but has since climbed back up to 149.20, indicating that the Japanese authorities have a lot of work to do to stem the demand for the dollar versus the beleaguered yen. Elsewhere, GBP/USD rose 0.4% to 1.1347, after former prime minister Boris Johnson pulled out of the running to replace the outgoing Liz Truss, with the Conservative Party due to announce its new leader, and thus PM, later Monday. Johnson’s decision means that former finance minister Rishi Sunak, seen as the most fiscally prudent option, is likely to win power. His appointment would likely reduce the political uncertainty hanging over the pound, for a little time at least. EUR/USD slipped 0.2% to 0.9843 ahead of Thursday’s ECB policy-setting meeting, which is expected to result in another 75 basis points hike as the central bank seeks to curb rampant inflation. While delayed data on gross domestic product showed the Chinese economy grew 3.9% in the third quarter, beating forecasts of 3.5%, this was still below the official forecasts and retail sales disappointed with a minor rise of 2.5%.
  • The dollar edged higher on Monday despite another suspected foreign exchange intervention by Japan, while sterling was choppy after Rishi Sunak was picked to become Britain's third prime minister in the last seven weeks, and China's offshore yuan fell to a record low. The yen hit a low of 149.70 per dollar overnight before surging to a high of 145.28 within minutes in a move that suggested the Bank of Japan (BOJ), acting for Japan's Ministry of Finance, had stepped in again. Japan likely spent a record 5.4 trillion to 5.5 trillion yen ($36.16 billion to $36.83 billion) in its yen-buying intervention last Friday, according to estimates by Tokyo money market brokerage firms. The Japanese currency was last at 148.89, down 0.77% against the greenback. The dollar held firm after the suspected BOJ intervention, but weakened, briefly turning negative, after S&P flash PMI data showed U.S. business activity contracting for a fourth straight month in October, the latest evidence of an economy softening in the face of high inflation and rising interest rates. In September, the Federal Reserve delivered its third straight 75-basis-point rate hike, and a fourth hike of that size is expected at next week's policy-setting meeting, though how aggressive policymakers remain after that is up for debate. The market is now waiting to see how much the economy is weakening and if the Fed will pause after hiking rates in December and February, Moya said. Sterling see-sawed after Sunak, the country's former chancellor, was appointed leader of Britain's Conservative Party, clearing the way for him to become the next prime minister Chinese President Xi Jinping secured a precedent-breaking third leadership term, picking a top governing body stacked with loyalists. Xi is likely to stick to his zero-COVID policy and could favor the state over private-sector growth, analysts say.
  • Oil prices rose on Tuesday as the U.S. dollar eased against major peers but gains were limited by worries of slowing global fuel demand growth amid bearish economic data from key oil importing economies such as China. International benchmark Brent crude futures gained 3 cents to $93.29 per barrel by 0652 GMT, after falling 0.3% in the previous session. U.S. West Texas Intermediate crude futures for December delivery rose 11 cents to $84.69 per barrel, after a previous decline of 0.6%. The greenback eased on Tuesday amid signs U.S. Federal Reserve rate hikes are putting the brakes on the world's biggest economy, while risk sentiment improved as Rishi Sunak prepared to become Britain's prime minister. A weaker U.S. dollar makes dollar-denominated oil less expensive for other currency holders and helps push prices higher. However, signs of uncertain economic activity in the United States and China, the world's two biggest oil consumers, limited the increase. Supply and demand fundamentals remain largely stable, leaving economic sentiment at the centre-stage for the oil market, Hari added. U.S. business activity contracted for a fourth month in October, with manufacturers and services firms saying in a monthly S&P Global (NYSE:SPGI) survey of purchasing managers published on Monday that client demand is falling . That weakening could indicate that the Fed's interest rate increases to fight inflation have been working and may persuade it to slow its rate hike policies, a positive signal for fuel demand Also on Monday, government data showed China's crude oil imports in September were 2% lower than a year earlier, continuing a trend of lower imports at the same time it reported slowing retail sales. U.S. crcrude oil inventories are also expected to rise this week, which may limit price gains. Analysts polled by Reuters estimated on average that crude inventories rose by 200,000 barrels in the week to Oct. 21. Analysts estimated stockpiles of gasoline fell by about 1.2 million barrels and distillate inventories, which include diesel and heating oil, were expected to have dropped by 1.1 million barrels last week. Separately, International Energy Agency head Fatih Birol said on Tuesday the world will still need Russian oil to flow to the market despite a price cap, with between 80% to 90% an "encouraging level" to meet demand. Many details of a price cap on Russian oil still have to be ironed out, Birol said during the Singapore International Energy Week.

 

 
Intraday RESISTANCE LEVELS
25th October 2022 R1 R2 R3
GOLD-XAU 1,660-1,670 1,679 1,690-1,700
Silver-XAG 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 0.9860 0.9910-0.9970 1.0105-1.0129
GBP/USD 1.1370-1.1455 1.1495-1.1550 1.1610
USD/JPY 149.50-150.00 150.40 151.00-151.70

Intraday SUPPORTS LEVELS
25th October 2022 S1 S2 S3
GOLD-XAU 1,648-1,640 1,634-1,627 1614-1,600
Silver-XAG 18.90-18.30 17.80-17.50 17.10-16.60
Crude Oil 84.50-83.70 83.00-81.60 80.85-80.00
EURO/USD 0.9800-0.9740 0.9680-0.9610 0.9530-0.9440
GBP/USD 1.1270-1.1210 1.1150-1.1100 1.1020-1.0980
USD/JPY 148.80-148.00 147.50-146.90 145.95-145.30

Intra-Day Strategy (25th 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$1670.62/oz and low of $1643.88/oz. Gold is up by 1.820% at US$1649.26/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 1660-1714 keeping stop loss closing above 1714, targeting 1651-1640-1628 and 1614-1600-1590. Buy in between 1641-1581 with risk below 1581, targeting 1660-1670-1679-1690.

 
Intraday Support Levels
S1     1,648-1,640
S2     1,634-1,627
S3     1614-1,600
Intraday Resistance Levels
R1     1,660-1,670
R2     1,679
R3     1,690-1,700

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$19.67/oz and low of US19.00/oz settled down by 1.065% at US$19.21/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 18.90-17.10, targeting 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 19.60-23.40 with stop loss above 23.40; targeting 18.90-18.30-17.90 and 17.50-17.10.

 
Intraday  Support Levels
S1     18.90-18.30
S2     17.80-17.50
S3     17.10-16.60

Intraday  Resistance Levels
R1     19.60-20.10
R2     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 Friday made an intra‐day high of US$85.58/bbl, an intraday low of US$82.37/bbl, and settled down by 0.228% to close at US$84.63/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 and 87.90-88.50-89.40.

 
Intraday Support Levels
S1     84.50-83.70
S2     83.00-81.60
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   48.207 Sell
20-DMA   85.12 Sell
50-DMA   87.07 Sell
100-DMA   90.71 Sell
200-DMA   91.11 Sell
STOCH(5,3)   60.291 Sell
MACD(12,26,9)   -0.29 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$0.9806/EUR, a high of US$0.9898/EUR, and settled the day up by 0.010% to close at US$0.9873/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 0.9860-1.0105, targeting 0.9740-0.9610-0.9550 and 0.9440-0.9400 with stop-loss at daily closing above 1.0105. Buy above 0.9800-0.9390 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
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 Monday made an intra‐day low of US$1.1257/GBP, a high of US$1.1407/GBP, and settled the day down 1.021% to close at US$1.1276/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 1.1270-1.0760 with a target of 1.1370-1.1395 and 1.1455-1.1495-1.1550 with stop loss closing below 1.0640 Sell in between 1.1370-1.1610 with targets at 1.1295-1.1210-1.1150 and 1.0995-1.0910-1.0800| with stop loss should be 1.1610.

 
Intraday Support Levels
S1     1.1270-1.1210
S2     1.1150-1.1100
S3     1.1020-1.0980

Intraday Resistance Levels
R1     1.1370-1.1455
R2     1.1495-1.1550
R3     1.1610

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 JPY145.49/USD and made an intraday high of JPY149.70/USD and settled the day up by 0.826% at JPY148.87/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 149.50-151.70 with risk above 151.70 targeting 149.50-18.00-147.50 and 146.90-145.95-145.30. Long positions above 148.80-143.00 with targets of 149.50 and 150.00-150.60 with stops below 143.00.

 
Intraday Support Levels
S1     148.80-148.00
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
AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING