AAFX TRADING

Daily Market Lookup

  • The yen fell more than 1% against the dollar on Friday after the Bank of Japan bucked the trend among other major central banks and stuck with ultra-low interest rates, while the greenback firmed after U.S. data showed inflation was still running hot. The greenback was under pressure this week ahead of the Federal Reserve's Nov. 1-2 policy setting meeting. The central bank is expected to raise rates by 75 basis points for the fourth-straight time before "pivoting" to a slower pace of rate hikes, which the market has begun pricing in. The dollar index was on track for a weekly decline of around 1%. Speculation over the timing of a Fed pivot has weakened the dollar, yet the greenback still gained on the yen after BOJ Governor Haruhiko Kuroda said Japan was nowhere near raising rates, with inflation in the country likely to fall short of its 2% target for years to come. Kuroda dismissed the view the BOJ's yield cap was to blame for recent sharp declines in the yen, reinforcing views that the central bank will not use rate hikes to prop up the currency. Sterling rose against the dollar, adding to gains earlier in the week following the appointment of Rishi Sunak as Britain's third prime minister in two months. The pound was up 0.39% at $1.1609, on track for a weekly rise of around 2.65%. The common currency was somewhat supported by German data, which showed that Europe's biggest economy unexpectedly avoided a recession in the third quarter, while inflation, driven by a painful energy standoff with Russia, surprised to the upside. U.S. data on Thursday showed that consumer spending rose more than expected in September while underlying inflation pressures continued to bubble, keeping the Fed on track to hike interest rates by 75 basis points next week The more dovish ECB and the Bank of Canada's smaller-than-expected interest rate hike this week helped drive expectations of a Fed pivot. The dollar was also firmer against the Swiss franc and the Australian dollar.
  • Most Asian currencies retreated on Monday as weak Chinese economic data weighed on sentiment, while markets hunkered down ahead of a Federal Reserve meeting starting this week. China’s yuan fell 0.2%, while the offshore yuan lost 0.2% after data showed the country’s manufacturing sector unexpectedly shrank in October. Overall business activity also unexpectedly contracted as several economic hubs experienced a resurgence in COVID-19 cases. The reading ramped up concerns over slowing economic activity in China, with the country still reeling from a slew of lockdowns this year. Economic hubs including Wuhan and Chengdu recently reintroduced COVID curbs after a rise in infections. Investors remain wary of any further economic disruptions in China, particularly after Beijing reiterated its commitment to its strict zero-COVID policy. Weakness in Chinese markets spilled over to broader Asia. The Indian rupee fell 0.1%, while the Taiwan dollar slipped 0.4%. The Japanese yen fell 0.2% after data showed industrial production slowed even further in September, with the outlook for the next two months remaining subdued. Rising inflation and a dovish outlook from the Bank of Japan weighed heavily on the yen this year, with the currency trading near its weakest level in 32 years. The dollar traded flat on Monday, with the dollar index and dollar index futures hovering around the 110 level. The greenback is expected to firm in the coming days as traders anticipate an at least 75 basis point interest rate hike by the Federal Reserve on Wednesday. Still, markets are also betting that signs of some easing inflationary pressures will push the Fed into softening its hawkish stance in the coming months. The dollar and U.S. Treasury yields fell from multi-year highs in October on that notion. But the outlook for Asian currencies remains constrained, especially with U.S. interest rates set to stay high for at least the next year. Rising interest rates caused sharp losses in Asian currencies this year. Among Antipodean currencies, the Australian dollar rose 0.1% after data showed retail sales grew more than expected in September, strengthening the outlook for the Australian economy.
  • Oil prices fell over $1 on Monday following weaker-than-expected factory activity data out of China and on concerns its widening COVID-19 curbs will curtail demand. Factory activity in China, the world's largest crude importer, fell unexpectedly in October, an official survey showed on Monday, weighed down by softening global demand and strict COVID-19 restrictions that hit production. Chinese cities are doubling down on Beijing's zero-COVID policy as outbreaks widen, dampening earlier hopes of a rebound in demand. Strict COVID-19 curbs in China have dampened economic and business activity, curtailing oil demand. China's crude oil imports for the first three quarters of the year fell 4.3% from the same period a year earlier - the first annual decline for this period since at least 2014 - as Beijing's drastic COVID-19 curbs hit fuel consumption hard. A further risk to oil demand comes from Europe, said CMC Markets analyst Leon Li, as the continent "is likely to enter a recession this winter," he said. The euro zone is likely entering a recession with its October business activity contracting at the fastest in nearly two years, according to a S&P Global (NYSE:SPGI) survey, as rising costs of living keeps consumers cautious and saps demand. European Central Bank policymakers are also standing behind plans to keep raising interest rates, even if it pushes the bloc into recession and stirs political resentment. Meanwhile, some of the largest U.S. oil producers on Friday signalled that productivity and volume gains in the Permian Basin - the nation's top shale field - are slowing. The warnings came just as U.S. oil exports rose to a record last week, partly pushing WTI prices up 3.4%. Brent rose 2.4% last week, notching its second consecutive weekly gain. In an outlook to be released on Monday, the Organization of the Petroleum Exporting Countries is expected to stick to a view of oil demand rising for another decade, despite increasing use of renewable energy and electric cars, two OPEC sources said.

 

 
Intraday RESISTANCE LEVELS
31st October 2022 R1 R2 R3
GOLD-XAU 1,648-1,670 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 0.9960-1.0099 1.0105-1.0129 1.0197-1.0364
GBP/USD 1.1610-1.1670 1.1725 1.1780-1.1820
USD/JPY 148.00-148.80 149.50 150.00-150.70

Intraday SUPPORTS LEVELS
31st October 2022 S1 S2 S3
GOLD-XAU 1,640-1,634 1,627 1,614-1,600
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 0.9910-0.9860 0.9800 0.9740-0.9680
GBP/USD 1.1495-1.1455 1.1370 1.1270-1.1210
USD/JPY 147.50-147.00 145.95-145.30 144.50-143.80

Intra-Day Strategy (31st 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$1666.93/oz and low of $1637.97/oz. Gold is down by 1.133% at US$1644.26/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 1648-1714 keeping stop loss closing above 1714, targeting 1640 and 1628-1614-1600. Buy in between 1640-1600 with risk below 1600, targeting 1648-1670-1679 and 1690-1700-1714.

 
Intraday Support Levels
S1     1,640-1,634
S2     1,627
S3     1,614-1,600
Intraday Resistance Levels
R1     1,648-1,670
R2     1,679-1,690
R3     1,700-1,726

Technical Indicators

Name   Value Action
14DRSI  

42.201

Buy
20-DMA   1659.05 Sell
50-DMA  

1684.51

Sell
100-DMA   1723.70 Sell
200-DMA   1765.68 Sell
STOCH(5,3)   10.503 Sell
MACD(12,26,9)   -10.505 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$19.63/oz and low of US18.98/oz settled up by 1.736% at US$19.24/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 Monday made an intra‐day high of US$88.08/bbl, an intraday low of US$86.55/bbl, and settled down by 0.317% to close at US$87.80/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 86.10-78.60 with risk daily closing below 78.60; targeting 87.00-87.90-88.50-89.40 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 Friday made an intraday low of US$0.9926/EUR, a high of US$0.9997/EUR, and settled the day up by 0.033% to close at US$0.9966/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 0.9960-1.0364, 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 0.9910-0.9610 with risk below 0.9610, targeting 1.0099-1.0105 and 1.0130-1.0195.

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

Intraday  Resistance Levels
R1     0.9960-1.0099
R2     1.0105-1.0129
R3     1.0197-1.0364

TECHNICAL INDICATORS
Name   Value Action
14DRSI   54.479 Buy
20-DMA   0.9980 Sell
50-DMA   0.9924 Sell
100-DMA   1.0093 Sell
200-DMA   1.0424 Sell
STOCH(5,3)   94.423 Buy
MACD(12,26,9)   0.0005 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.1503/GBP, a high of US$1.1623/GBP, and settled the day up 0.4862% to close at US$1.1613/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     1.1495-1.1455
S2     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 Friday made an intra‐day low of JPY145.96/USD and made an intraday high of JPY147.85/USD and settled the day up by 0.832% at JPY147.45/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     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     150.00-150.70

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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