AAFX TRADING

Daily Market Lookup

  • The dollar wallowed near a three-week low versus major peers on Wednesday as more signs of economic weakness in the United States fanned speculation about a less hawkish Federal Reserve. The Australian dollar strengthened to just shy of the previous session's 2 1/2-week high as hotter-than-expected inflation data put pressure on the Reserve Bank ahead of a rate decision next week. Sterling hung close to the six-week peak reached on Tuesday after new British Prime Minister Rishi Sunak pledged to lead the country out of an economic crisis, and stuck with Jeremy Hunt as finance minister. The euro also remained near a six-week high, trading less than half a cent from parity with the greenback. The European Central Bank decides policy on Thursday and is widely expected to raise rates by 75 basis points. Data overnight showed that U.S. home prices sank in August as surging mortgage rates sapped demand, amid recent signs that Fed rate increases are already working to slow the world's biggest economy. Traders and economists predict another 75 basis point increase next Wednesday, but the view is growing for a slowing to half a point in December. That put pressure on the dollar versus the yen because of its sensitivity to U.S. rates, although it managed a 0.22% gain to 148.265, clawing back some of its 0.7% slide on Tuesday. The dollar reached a 32-year high at 151.94 yen on Friday, but was then beaten back as far as 144.55 amid two bouts of suspected Bank of Japan (BOJ) intervention either side of the weekend. Even so, fundamentals still favor a weaker yen, with the BOJ expected on Friday to keep stimulus settings unchanged, running counter to monetary tightening by developed-market peer. But while that should lend the currency some support, it has also been battered by poor risk sentiment amid weakness in global stock markets and economic worries around top trading partner China.
  • The U.S. dollar stabilized at lower levels in early European trading Tuesday as traders factored in a potentially less hawkish Federal Reserve, while sterling benefited from the increased risk sentiment as Rishi Sunak prepares to become Britain's new prime minister. The dollar retreated on Monday after the October S&P Global Composite PMI release showed U.S. business activity contracting for a fourth straight month, an indication that the Fed's aggressive monetary tightening was having a significant impact. This played into the idea that the central bank policymakers were having second thoughts about the extent of future rate hikes after November's expected 75 basis point increase. The Wall Street Journal reported late last week that the pace of further rate hikes after November's lift will be less clear, citing sources familiar with the Fed's thinking. Sunak has a large in-tray to handle, with high inflation squeezing government budgets and the Bank of England predicting a recession by the end of the year. However, the fact he vocally opposed outgoing Prime Minister Liz Truss's plans for huge unfunded tax cuts means he has a degree of credibility within the markets. How long this lasts may depend on the combination of tax rises and politically realistic spending restraint he, along with his chancellor, agrees to. The German Ifo business climate indicator is expected to fall to 83.3 in October, from 84.3, as high energy prices continue to weigh, likely dragging the German economy into recession next year.
  • Oil prices eased on Wednesday after industry data showed U.S. crude stockpiles rose more than expected, though supply worries capped losses. Brent crude futures for December fell $1.03, or 1.1%, to $92.49 a barrel by 0635 GMT, after settling 26 cents higher in the previous session. U.S. crude inventories rose by about 4.5 million barrels in the week ended Oct. 21, according to market sources citing figures from the American Petroleum Institute, an industry group. That was higher than expectations from five analysts polled by Reuters, who on average had expected a build of about 200,000 barrels. While a rise in crude stockpiles reinforced fears of a global recession that would cut demand, ongoing supply constraints kept prices trading in a narrow range. With respect to the wide WTI-Brent spread in recent sessions, Innes added that WTI buyers are watching for any more interventions by President Joe Biden ahead of the U.S. mid-term elections on Nov. 8. Biden announced a plan last week to sell off the rest of a record release from the nation's emergency oil reserve by year end as he tries to dampen high gasoline prices. While smarting from the recent decision by the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, together called OPEC+, to cut oil output, the White House on Tuesday welcomed moves by Saudi Arabia to help Ukraine in its war with Russia. Biden, facing criticism over high inflation, has warned the Saudis would face consequences for aligning with Russia and agreeing to reduce crude supply. Meanwhile, official U.S. stockpile data from the government's Energy Information Administration is due on Wednesday at 1430 GMT.

 

 
Intraday RESISTANCE LEVELS
26th 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 0.9990-1.0099 1.0105 1.0129-1.0197
GBP/USD 1.1495-1.1550 1.1610 1.1670-1.1725
USD/JPY 148.00-148.80 149.50 150.00-150.40

Intraday SUPPORTS LEVELS
26th 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 83.70 83.00-81.60 80.85-80.00
EURO/USD 0.9910-0.9860 0.9800-0.9740 0.9680-0.9610
GBP/USD 1.1455-1.1370 1.1270-1.1210 1.1150-1.1100
USD/JPY 147.50-147.00 145.95-145.30 144.50-143.80

Intra-Day Strategy (26th 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$1662.30/oz and low of $1638.21/oz. Gold is up by 0.212% at US$1653.01/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 Tuesday made its intraday high of US$19.42/oz and low of US18.78/oz settled up by 0.212% at US$19.32/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 Tuesday made an intra‐day high of US$85.70/bbl, an intraday low of US$82.78/bbl, and settled up by 0.0662% to close at US$84.61/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     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 Tuesday made an intraday low of US$0.9848/EUR, a high of US$0.9976/EUR, and settled the day up by 0.925% to close at US$0.9964/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.0736), which becomes 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 0.9990-1.0105, targeting 0.9740-0.9610-0.9550 and 0.9440-0.9400 with stop-loss at daily closing above 1.0105. Buy above 0.9910-0.9610 with risk below 0.9610, targeting 0.9995-1.0099-1.0105 and 1.0130-1.0195.

 
Intraday Support Levels
S1     0.9910-0.9860
S2     0.9800-0.9740
S3     0.9680-0.9610

Intraday  Resistance Levels
R1     0.9990-1.0099
R2     1.0105
R3     1.0129-1.0197

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.043 Buy
20-DMA   0.9843 Sell
50-DMA   0.9915 Sell
100-DMA   1.0099 Sell
200-DMA   1.0437 Sell
STOCH(5,3)   94.423 Buy
MACD(12,26,9)   0.0005 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.1270/GBP, a high of US$1.1498/GBP, and settled the day up 1.678% to close at US$1.1466/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 1.1455-1.1100 with a target of 1.1495-1.1550-1.1610 and 1.1670-1.1725 with stop loss closing below 1.0640 Sell in between 1.1495-1.1725 with targets at 1.1455-1.1370-1.1295 and 1.1210-1.1150-1.0995 with stop loss should be 1.1725.

 
Intraday Support Levels
S1     1.1455-1.1370
S2     1.1270-1.1210
S3     1.1150-1.1100

Intraday Resistance Levels
R1     1.1495-1.1550
R2     1.1610
R3     1.1670-1.1725

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 Tuesday made an intra‐day low of JPY147.51/USD and made an intraday high of JPY149.09/USD and settled the day down by 0.640% at JPY147.91/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 148.00-151.70 with risk above 151.70 targeting 147.50 and 146.90-145.95-145.30. Long positions above 147.50-143.00 with targets of 149.50 and 150.00-150.60 with stops below 143.00.

 
Intraday Support Levels
S1     147.50-147.00
S2     145.95-145.30
S3     144.50-143.80

INTRADAY RESISTANCE LEVELS
R1     148.00-148.80
R2     149.50
R3     150.00-150.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.661 Buy
20-DMA   145.99 Buy
50-DMA   143.81 Buy
100-DMA   139.51 Buy
200-DMA   132.87 Buy
STOCH(9,6)   41.288 Buy
MACD(12,26,9)   1.537 Sell

AAFX TRADING
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