AAFX TRADING

Daily Market Lookup

  • The dollar gained across the board on Monday, regaining some of the luster it lost earlier in the month, bolstered by expectations of another supersized rate increase at this week's Federal Reserve monetary policy meeting. That said, the dollar's gains could be limited if the Fed signals on Wednesday that the pace of rate hikes will slow as it assesses the impact so far of its policy tightening. Sterling, on the other hand, was on the defensive against the dollar and the euro, despite market forecasts of another 75 basis-point rate hike by the Bank of England later this week as well. The Fed is widely expected to raise its benchmark overnight interest rate by 75 basis points (bps) to a range of 3.75% to 4.00%, its fourth such increase in a row. But for the December meeting, fed funds futures have priced in on Monday a 55% chance of a 50-bps rate increase, down from about 67% last Friday. In afternoon trading, the dollar rose 0.8% against the struggling yen to 148.62 yen. For the month of October, the dollar was up 2.7%, on track to post its third monthly gain versus the Japanese currency. On Monday, Japan's finance ministry said it spent a record $42.8 billion on currency intervention this month to prop up the yen. A steep drop in the yen to a 32-year low of 151.94 to the dollar on Oct. 21 likely triggered the intervention, followed by another one on Oct. 24. The greenback, however, was on pace for a monthly decline of 0.5% in October, based on the dollar index. The BoE is likely to deliver a 75-basis point hike at Thursday’s meeting, although analysts said longer-term rate expectations are coming under sustained pressure. The pound also fell versus the euro, which rose 0.5% to 86.16 pence. BoE Deputy Governor Ben Broadbent recently suggested that the borrowing costs priced by investors would hammer the UK economy, noting that he's doubtful Britain could engineer a "soft-landing" - a U.S. term for bringing inflation back to target without significantly damaging the real economy. The euro barely reacted after data released on Monday that showed Eurozone inflation came in hotter than expected at 10.7%, a fresh record high. Elsewhere, the Chinese yuan slumped after data released on Monday showed China's factory activity unexpectedly fell in October, weighed down by softening global demand and strict domestic COVID-19 curbs. The Reserve Bank of Australia (RBA), meanwhile, is tending towards the dovish end of the spectrum and is expected to raise interest rates by a more modest 25 bp at its Tuesday meeting, even as inflation raced to a 32-year high last quarter. In the emerging market world, the U.S. dollar dropped more than 2% against the Brazilian real after former president Luiz Inacio Lula da Silva narrowly defeated President Jair Bolsonaro in a run-off election.
  • Gold prices hit a 10-day low on Tuesday, with broader metal markets losing more ground as the dollar rebounded ahead of a widely expected Federal Reserve interest rate hike. Bullion prices are set to lose more ground as caution kicks in ahead of a Federal Reserve meeting that is set to conclude on Wednesday. The central bank is widely expected to hike interest rates by 75 basis points (bps). But the Fed’s outlook on monetary policy will be closely watched, amid some expectations that the central bank will soften its hawkish stance. Markets are mixed over the possibility of a 50 bps hike by the Fed in December, especially amid expectations that high interest rates are likely to erode economic growth. Still, U.S. interest rates are at their highest level since the 2008 financial crisis, and are expected to keep the dollar upbeat and gold subdued in the coming months. Rising Treasury yields ramped up the opportunity cost of holding gold this year, which saw investors pivot out of the yellow metal. Most other precious metals logged similar losses, and are also expected to weaken further as interest rates rise. The dollar index surged 0.8% on Monday, extending its recovery into a fourth straight session as investors positioned for the rate hike. Strength in the greenback has also greatly pressured metal markets. Weaker-than-expected manufacturing data from China, the world’s largest copper importer, brewed renewed concerns over slowing demand in the country. New COVID outbreaks in the country are also expected to disrupt economic activity, which could further weigh on commodity demand. Copper prices fell sharply this year, recently hitting a two-year low as concerns over China, rising inflation, and interest rates dented the prospect of demand. But prices of the red metal are expected to benefit from tightening supply in the coming months, amid lower output from Chile and U.S. sanctions on Russian producers.
  • Oil prices rose more than 1% on Tuesday, paring losses from the previous session, as a weaker U.S. dollar offset widening COVID-19 curbs in China that have stoked fears of slowing fuel demand in the world's second-largest oil consumer. The Brent and WTI benchmarks both ended October higher, posting their first monthly gains since May, after the Organization of the Petroleum Exporting Countries and allies including Russia said they would cut output by 2 million barrels per day (bpd). The greenback sank on Tuesday from a one-week high against a basket of major peers, as traders weighed the odds of a less aggressive Federal Reserve at Wednesday's monetary policy meeting. A weaker dollar makes oil cheaper for holders of other currencies and usually reflects greater investor appetite for risk. OPEC raised its forecasts for world oil demand in the medium-and longer-term on Monday, saying that $12.1 trillion of investment is needed to meet this demand despite the transition to renewable energy sources. COVID-19 curbs in China forced the temporary closure of Disney's Shanghai resort on Monday and have spurred worries of lower fuel demand in the world's top crude oil importer as it persists with its zero-COVID policy. Strict pandemic restrictions have caused China's factory activity to fall in October and cut into its imports from Japan and South Korea. Stephen Innes, managing partner at SPI Asset Management said that "the market has digested the latest string of China lockdowns". Keeping a check on oil prices, though, U.S. oil output climbed to nearly 12 million bpd in August, the highest since the start of the COVID-19 pandemic, even as shale companies said they do not expect production to accelerate in coming months. That is likely to lead to a rise in U.S. crude oil stocks in the week to Oct. 28 of about 300,000 barrels, a preliminary Reuters poll showed, while distillate and gasoline inventories were expected to fall. The poll was conducted ahead of reports from the American Petroleum Institute due at 4:30 p.m. EDT (2030 GMT) on Tuesday, and the Energy Information Administration due at 10:30 a.m. (1430 GMT) on Wednesday.

 

 
Intraday RESISTANCE LEVELS
1st November 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
1st November 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 (1st November 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$1645.52/oz and low of $1635.54/oz. Gold is down by 0.146% at US$1641.11/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 Monday made its intraday high of US$19.63/oz and low of US18.89/oz settled up by 0.431% at US$19.15/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 Tuesday made an intra‐day high of US$88.02/bbl, an intraday low of US$84.75/bbl, and settled down by 2.535% to close at US$85.67/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 Monday made an intraday low of US$0.9871/EUR, a high of US$0.9965/EUR, and settled the day up by 0.727% to close at US$0.9881/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 Monday made an intra‐day low of US$1.1459/GBP, a high of US$1.1612/GBP, and settled the day down 1.091% 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 1.1500-1.1100 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 Monday made an intra‐day low of JPY147.53/USD and made an intraday high of JPY148.84/USD and settled the day up by 0.676% at JPY148.75/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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