AAFX TRADING

Daily Market Lookup

  • The euro dropped more than 1% on Thursday, falling back below parity with the dollar, after the European Central Bank (ECB) raised interest rates and U.S. data showed that the world's biggest economy rebounded more than expected in the third quarter. The ECB raised its deposit rate by 75 basis points to 1.5%, the highest since 2009, in an effort to prevent rapid price growth from becoming entrenched. Further rate hikes are almost certain, but with a weakening economy, the pace is up for debate. While risks to the euro zone's growth outlook had shifted to the downside, the central bank has made substantial progress in removing monetary accommodation through three consecutive rate increases, ECB President Christine Lagarde said at a news conference. The euro fell from a one-month high of $1.0094 versus the dollar earlier in the day to back below parity with the greenback after the ECB rate decision. The single currency was down 1.1% at 0.9969 at 3:20 p.m. EDT (1920 GMT). The greenback strengthened after data showed that U.S. gross domestic product rose at a 2.6% annualized rate last quarter, ending two straight quarterly decreases in output that had raised concerns the economy was in recession. Economists polled by Reuters had forecast GDP growth would rebound at a 2.4% rate. The stronger-than-expected GDP figures followed a raft of weaker-than-forecast economic data in recent weeks that had raised concerns about the impact of the Federal Reserve's aggressive interest rate increases on the economy. The Fed is expected to raise its benchmark overnight interest rate by 75 basis points to 1.5%, a 13-year high, at its Nov. 1-2 policy meeting It is also likely to reel in a key subsidy to commercial banks. Speculation that the Fed will pivot from its hawkish stance starting at its December policy meeting had caused the greenback to decline in recent days and Thursday's bounceback was natural, analysts said. The British pound was down 0.58% against the greenback to $1.1559 following a two-day rally on the back of Rishi Sunak's appointment as the United Kingdom's prime minister. Trading in the Japanese currency has been volatile after suspected interventions by the government to boost the ailing currency on Friday and Monday. On Wednesday, the Bank of Canada announced a smaller-than-expected interest rate hike of 50 basis points. The move has made investors even more alert to signs that the Fed and ECB might be slowing their tightening down.
  • The euro slid and bonds rallied as traders pared bets on longer-term interest-rate hikes after the European Central Bank lifted borrowing costs up by a jumbo 75 basis points for a second consecutive meeting. The euro fell as much as 0.9% to briefly drop below parity after the decision, which brings the deposit rate to 1.5%. Markets had been expecting a hike of that magnitude for weeks as policy makers attempt to bring record inflation under control. While the ECB said that it expects to raise interest rates further, it adopted a slightly less hawkish tone. That led money markets to cut rate-hike wagers by as much as 20 basis points, pricing a peak below 2.75% next year. That compares with above 3.25% seen as recently as last week. The Bank of Canada hiked rates by 50 basis points on Wednesday, a smaller-than-expected move. Traders’ attention is now turning to ECB President Christine Lagarde’s press conference, and in particular any indication of whether policy makers may deliver a smaller hike in December. German bonds swung to gains across the board. The two-year note -- among the most sensitive to interest-rate changes -- led the rally, sending the yield as much as eight basis points lower to 1.86%. It had risen as much as 11 basis points earlier.
  • OPEC's view that world oil demand will keep rising for longer than many other forecasters predict is not expected to change much in its forthcoming major report, despite the growing role of renewables and electric cars, two OPEC sources said. The Organization of the Petroleum Exporting Countries is scheduled to update its long-term oil demand forecasts in its 2022 World Oil Outlook on Oct. 31. The 2021 version sees oil demand plateauing after 2035. Another decade or more of oil demand growth would be a boost for producers and OPEC, whose 13 members depend on oil income, and would highlight the need for continued investment in new oil supplies. Consumers and governments urging efforts to curb oil use to combat climate change would be less happy. OPEC made a shift in 2020 as the pandemic hit demand by saying it will eventually plateau, after having predicted years of ever-rising demand. The latest update is likely to keep OPEC among the more optimistic forecasters of oil demand. The International Energy Agency on Thursday said demand for all fossil fuels was set to peak or plateau for the first time in the agency's history of modelling, with oil demand levelling off in the middle of the next decade. OPEC's Vienna headquarters declined to answer questions ahead of the publication's launch on Monday in Abu Dhabi that will be attended by OPEC Secretary General Haitham Al Ghais and other OPEC officials. Another OPEC source said Russia's invasion of Ukraine - which has sent oil and gas prices soaring and led to an energy crisis - could boost oil demand in the near term due to fuel switching, as could the ongoing recovery from the pandemic. Last year, OPEC saw oil demand reaching 108.2 million barrels per day in 2045, up from 90.6 million bpd in 2020. The group has been lowering the 2045 projection for the last few years citing changes to consumer behaviour brought about by the pandemic and competition from electric cars. Two former OPEC officials cited longer-term trends that will weigh on demand. Qabazard last year said demand could peak within a decade but maybe later and hasn't since changed his view. A former OPEC minister said the longer-term implications of the Ukraine war could encourage the shift towards renewables. He added that it was "highly probable" demand could plateau earlier than expected in the current OPEC forecast.

 

 
Intraday RESISTANCE LEVELS
28th October 2022 R1 R2 R3
GOLD-XAU 1,670-1,679 1,690 1,700-1,726
Silver-XAG 19.70-20.10 20.60 21.30-21.90
Crude Oil 87.90-88.50 89.40 90.30-91.10
EURO/USD 1.0099-1.0105 1.0129 1.0197-1.0364
GBP/USD 1.1610-1.1670 1.1725 1.1780-1.1820
USD/JPY 147.00-147.50 148.00 148.80-149.50

Intraday SUPPORTS LEVELS
28th October 2022 S1 S2 S3
GOLD-XAU 1,648 1,640-1,634 1,627–1,614
Silver-XAG 18.90-18.30 17.80-17.50 17.10-16.60
Crude Oil 85.85-83.70 83.00-81.60 80.85-80.00
EURO/USD 0.9960-0.9910 0.9860-0.9800 0.9740-0.9680
GBP/USD 1.1495 1.1455-1.1370 1.1270-1.1210
USD/JPY 145.95-145.30 144.50-143.80 143.40-142.50

Intra-Day Strategy (28th 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 Friday made its intraday high of US$1670.73/oz and low of $1654.83/oz. Gold is down by 0.069% at US$1663.27/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 1670-1714 keeping stop loss closing above 1714, targeting 1660-1651-1640 and 1628-1614-1600. Buy in between 1660-1600 with risk below 1581, targeting 1670-1679-1690 and 1700-1714-1728.

 
Intraday Support Levels
S1     1,648
S2     1,640-1,634
S3     1,627–1,614
Intraday Resistance Levels
R1     1,670-1,679
R2     1,690
R3     1,700-1,726

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$19.66/oz and low of US19.28/oz settled up by 0.184% at US$19.59/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 19.50-17.10, 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 19.70-23.40 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     19.70-20.10
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 Wednesday made an intra‐day high of US$87.97/bbl, an intraday low of US$83.82/bbl, and settled up by 3.698% to close at US$87.88/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 87.90-91.40 with stop loss at 91.40; targeting 85.85-83.70-83.00 and 81.60-80.85-80.00. Buy above 87.10-78.60 with risk daily closing below 78.60; targeting 87.90-88.50-89.40 and 90.30-91.10

 
Intraday Support Levels
S1     85.85-83.70
S2     83.00-81.60
S3     80.85-80.00

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   54.494 Sell
20-DMA   85.59 Sell
50-DMA   87.12 Sell
100-DMA   90.59 Sell
200-DMA   91.04 Sell
STOCH(5,3)   82.843 Sell
MACD(12,26,9)   -0.29 Buy

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$0.9957/EUR, a high of US$1.0093/EUR, and settled the day down by 1.163% 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 1.0099-1.0364, targeting 0.9990-0.9910-0.9860 and 0.9740-0.9610-0.9550 with stop-loss at daily closing above 1.0105. Buy above 0.9990-0.9610 with risk below 0.9610, targeting 1.0099-1.0105 and 1.0130-1.0195.

 
Intraday Support Levels
S1     0.9960-0.9910
S2     0.9860-0.9800
S3     0.9740-0.9680

Intraday  Resistance Levels
R1     1.0099-1.0105
R2     1.0129
R3     1.0197-1.0364

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 Thursday made an intra‐day low of US$1.1548/GBP, a high of US$1.1644/GBP, and settled the day down 0.5087% to close at US$1.1557/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 1.1500-1.1100 with a target of 1.1610 and 1.1670-1.1725 with a stop loss closing below 1.0640 Sell in between 1.1610-1.1825 with targets at 1.1550-1.1495-1.1455 and 1.1370-1.1295-1.1210 with stop loss should be 1.1825.

 
Intraday Support Levels
S1     1.1495
S2     1.1455-1.1370
S3     1.1270-1.1210

Intraday Resistance Levels
R1     1.1610-1.1670
R2     1.1725
R3     1.1780-1.1820

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 JPY146.93/USD and made an intraday high of JPY146.93/USD and settled the day down by 0.048% at JPY146.23/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 a 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     145.95-145.30
S2     144.50-143.80
S3     143.40-142.50

INTRADAY RESISTANCE LEVELS
R1     147.00-147.50
R2     148.00
R3     148.80-149.50

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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