AAFX TRADING

Daily Market Lookup

  • The U.S. dollar slipped from near a one-week peak versus major peers on Wednesday, with traders on tenterhooks before a looming Federal Reserve rate decision that should also give clues on the future policy path. The yen outperformed, seeing a sudden burst of strength mid-morning Japan time, with traders on alert for possible intervention around the Fed meeting. The index rode a yo-yo overnight, dropping fast going into the European open only to recover after U.S. data pointed to continued price pressures, dampening speculation of a Fed pivot this year. U.S. job openings unexpectedly rose, suggesting wage growth stays elevated, while construction spending staged a surprise rebound. Investors widely expect the Fed to raise its benchmark interest rate by 75 basis points (bps) on Wednesday, the fourth such increase in a row. But for the December meeting, the futures market is split on the odds of a 75- or 50-bps increase amid recent suggestions from Fed officials of a potential slowdown in the tightening pace. The dollar index has surged more than 15% this year as the Fed has hiked rates hard, crushing other currencies and heaping pressure on the global economy. The yen has been particularly vulnerable to dollar strength, spurring the Ministry of Finance and Bank of Japan to intervene to support the currency in September for the first time since 1998. The initial leap in the yen coincided with several events that could have played a role, analysts said, including a drop in long-term U.S. Treasury yields, to which the dollar-yen rate is strongly correlated. Japanese officials were also speaking in parliament, including BOJ Governor Haruhiko Kuroda, who said that increasing flexibility in the yield curve control policy could be a future option, and Finance Minister Shunichi Suzuki, who said later in the day that the government was concerned about steady yen depreciation as well as speculative moves. The BOJ also released minutes of its latest policy meeting around that time, with a member saying the bank must be vigilant for an inflation overshoot, possibly caused by yen weakness. North Korea fired several missiles around the same time too. The Bank of England announces its policy decision on Thursday, and markets expect a 75-bps increase there as well, followed by a slowdown to a 50-bps pace in December. China is a major customer of Australia's commodity exports, making Australian assets, particularly the Australian dollar, a proxy for market participants to gain exposure to China.
  • Gold prices held recent gains on Wednesday as the dollar steadied before the conclusion of a Federal Reserve meeting, while copper prices were lifted by speculation over China potentially relaxing its strict zero-COVID policy. The dollar index steadied around 111 on Wednesday, with focus turning to the conclusion of a Federal Reserve meeting later in the day. While the bank is widely expected to hike interest rates by 75 basis points (bps), markets will be watching for any indication from the Fed on when it plans to ease its hawkish tone. Still, strong U.S. economic data this week showed that the central bank likely has enough headroom to keep raising interest rates at a sharp clip - a scenario that is negative for gold. Bullion prices have fallen sharply from 2022 highs as the Fed began raising interest rates, which drove up the opportunity cost of holding the yellow metal, given that it offers no yields. The broader metal market was also pressured by increasing interest rates this year. The Bank of England is expected to hike rates by 75 bps on Thursday, as most economies in the world struggle with rising inflation. Among industrial metals, copper prices steadied after rallying nearly 3% on Tuesday. The red metal was boosted by unfounded rumors that China plans to scale back its strict zero-COVID policy, which is at the heart of the country’s economic woes this year. Prices of the red metal plummeted this year as Chinese economic growth slowed, denting the country’s appetite for copper. China is the biggest importer of copper in the world. But the relaxing of COVID rules in the country is likely to spur a sharp economic bounceback, given that Beijing has rolled out several stimulus measures to help support the economy. This could spur large gains in commodity markets, given China’s dominance as a market. But Beijing issued no official comment on the matter. President Xi Jinping had recently also reiterated the country's commitment to the zero-COVID policy.
  • Oil prices rose on Wednesday after industry data showed a surprise drop in U.S. crude stocks, suggesting demand is holding up despite steep interest rate hikes dampening global growth. The benchmarks rose about 2% in the previous session on a weaker U.S. dollar and after an unverified note trending on social media said the Chinese government was going to consider ways to relax COVID-19 rules from March 2023, potentially boosting demand in the world's No.2 oil user. In a further positive sign for demand, U.S. crude oil stocks fell by about 6.5 million barrels for the week ended Oct. 28, according to market sources citing American Petroleum Institute figures. Eight analysts polled by Reuters had on average expected crude inventories to rise by 400,000 barrels. At the same time, gasoline inventories fell more than expected, with stockpiles down by 2.6 million barrels compared with analysts' forecasts for a drawdown of 1.4 million barrels. China's zero-COVID policy has been a key factor in keeping a lid on oil prices as repeated lockdowns have slowed growth and pared oil demand in the world's second-largest economy. Teng added that a softer U.S. dollar was also underpinning oil prices. A weaker dollar makes commodities priced in the greenback cheaper for holders of other currencies The greenback slipped from a near one-week peak versus major peers, with traders on tenterhooks before the looming Federal Reserve rate decision on Wednesday. The potential disruption from the European Union embargo on Russian oil that is set to start on Dec. 5 may also be pushing prices higher. The ban, a reaction to Russia's invasion of Ukraine, will be followed by a halt on oil product imports in February.

 

 
Intraday RESISTANCE LEVELS
2nd 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 88.90-89.40 90.30-91.10 92.00-93.35
EURO/USD 0.9910-0.9960 1.0099-1.0105 1.0129-1.0197
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
2nd 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 88.50-87.90 85.85-83.70 83.00-81.60
EURO/USD 0.9860-0.9800 0.9740 0.9680-0.9600
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 (2nd 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 Tuesday made its intraday high of US$1656.91/oz and low of $1630.60/oz. Gold is up by 0.855% at US$1647.59/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 Tuesday made its intraday high of US$20.02/oz and low of US19.11/oz settled up by 2.62% at US$19.62/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$88.81/bbl, an intraday low of US$85.34/bbl, and settled up by 2.489% to close at US$87.95/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     88.50-87.90
S2     85.85-83.70
S3     83.00-81.60

Intraday Resistance Levels
R1     88.90-89.40
R2     90.30-91.10
R3     92.00-93.35

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 Tuesday made an intraday low of US$0.9852/EUR, a high of US$0.9953/EUR, and settled the day down by 0.0718% to close at US$0.9874/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 0.9910-1.0364, 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 0.9860-0.9610 with risk below 0.9610, targeting 1.0099-1.0105 and 1.0130-1.0195.

 
Intraday Support Levels
S1     0.9860-0.9800
S2     0.9740
S3     0.9680-0.9600

Intraday  Resistance Levels
R1     0.9910-0.9960
R2     1.0099-1.0105
R3     1.0129-1.0197

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.0310 Buy
20-DMA   0.9974 Sell
50-DMA   0.9919 Sell
100-DMA   1.0087 Sell
200-DMA   1.0873 Sell
STOCH(5,3)   27.789 Buy
MACD(12,26,9)   0.0005 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.1436/GBP, a high of US$1.1565/GBP, and settled the day up 0.143% to close at US$1.1482/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 Tuesday made an intra‐day low of JPY146.98/USD and made an intraday high of JPY148.82/USD and settled the day up by 0.353% at JPY148.22/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
AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING