AAFX TRADING

Daily Market Lookup

  • The U.S. dollar eased slightly on Thursday as investors digested the possibility that Federal Reserve may raise interest rates further than expected, while sterling edged higher ahead of the Bank of England policy meeting. The Fed on Wednesday raised its benchmark funds rate by 75 basis points (bps) to 3.75-4% as widely expected. The dollar initially fell on hints in the Fed's statement of smaller hikes ahead, but regained strength after Chair Jerome Powell said that the battle against inflation will require borrowing costs to rise further. The hawkish stance from Powell dashed hopes of a pivot to a less aggressive stance and saw the dollar hit a week-high of $0.9810 per euro in early Asia trade. But the greenback lost some steam through the day and was last trading at $0.983. Tan said for the Fed bringing down inflation is more important than supporting economic growth and the central bank will keep on tightening. The slight retreat in dollar is unlikely to last long. Meanwhile, the pound was last trading at $1.1412, up 0.20% on the day ahead of the Bank of England meeting, when the central bank is on track to raise interest rates by three quarters of a percentage point to 3%, its biggest rate rise since 1989. Japan's yen remained notably firm and has held at 147.24 per dollar as traders continue to watch for any more official interventions for the battered currency. Japan spent a record $42.8 billion propping up the yen last month via a series of unannounced yen purchases, on top of almost $20 billion spent in September.
  • The dollar regained some strength on Wednesday after Federal Reserve Chair Jerome Powell said it was premature to discuss a pause in its hiking of interest rates to battle rising consumer prices, as there is "no sense that inflation is coming down." The Fed, as markets had expected, raised its key lending rate by 75 basis points for the fourth straight time after a two-day meeting of policy-makers. Markets initially read the Fed's statement at the end of the meeting as dovish and a signal that future rate increases to tame high inflation could be made in smaller increments Yet Powell made clear at the press conference after the statement that a mistake in not tightening monetary policy enough would risk dealing with entrenched inflation. A change in pace in rate hikes could come at the Fed's next meeting in December, Powell said. But he cautioned extensive uncertainty remains about how high rates need to go and that they could end up higher than policymakers previously thought. Equities and other risk assets at first rose after the Fed statement was released, but stocks on Wall Street closed sharply lower after Powell spoke, as hopes the Fed would ease its hiking campaign quickly dissipated. The euro initially rose against the dollar but later turned lower, down 0.5% at $0.9825. The Japanese yen strengthened 0.31% versus the greenback at 147.79 per dollar.0.3 The Fed's battle against inflation running at four-decade highs has unleashed the most aggressive hiking campaign in more than a decade. Growing expectations that the Fed would dial down the aggressiveness of its rate hikes have weighed on the dollar in recent weeks. Japanese authorities are widely considered to have intervened in FX markets several times since September to pull the yen back from 32-year lows. Japan's currency interventions have been stealth operations in order to maximize the effects of its forays into the market, Finance Minister Shunichi Suzuki said on Tuesday, after the government spent a record $43 billion supporting the yen last month.
  • Oil slipped on Thursday as a U.S. interest rate hike pushed up the dollar and fuelled fears of a global recession, although losses were capped by concerns over tight supply. Both benchmarks settled up more than $1 on Wednesday, aided by another drop in U.S. oil inventories, even as the Fed boosted interest rates by 75 basis points and Chair Jerome Powell said it was premature to think about pausing rate increases. A strong dollar is dragging down oil, with some market participants also likely booking profits following recent gains, CMC Markets analyst Tina Teng said. A strong dollar reduces demand for oil by making the fuel more expensive for buyers using other currencies. Stephen Innes, managing partner of SPI Asset Management, said that it was surprising oil had proved so resilient after the move by the Federal Reserve, but he noted there were a couple of fundamental factors putting a floor under prices The European Union's embargo on Russian oil for its invasion of Ukraine is set to start on Dec. 5 and will be followed by a halt on oil product imports in February. Also likely to keep supply tight in coming months, producers from the Organization of the Petroleum Exporting Countries (OPEC) may struggle to hit previously set output quotas, ANZ analysts said in a note. OPEC production fell in October for the first time since June. OPEC and its allies, including Russia, also decided to cut their targeted output by 2 million barrels per day (bpd) from November. The market is also expecting demand from China to pick up with hopes that Beijing will ease off on its zero-COVID policies. Chinese policymakers pledged on Wednesday that growth was still a priority and they would press on with reforms. Any indication of a reopening in China following COVID-19 restrictions could be a "monster pivot", said Innes.
  • Gold prices fell on Thursday, reversing recent gains as hawkish comments from Federal Reserve Chairman Jerome Powell dashed hopes that interest rate hikes will end soon, while copper prices were also hit by uncertainty over China withdrawing its zero-COVID policy. The Fed hiked interest rates by an as-expected 75 basis points (bps), and said that it was “very premature” to consider pausing further rate hikes. While Powell hinted that future rate hikes may be of a smaller magnitude, the central bank appears to be further away from the end of its tightening cycle than previously thought. Powell said that U.S. rates will likely end the cycle higher than previously expected. This boosted the dollar and U.S. Treasury yields, and weighed on metal markets. Losses in the yellow metal mirrored those seen in most risk-driven markets, as Powell’s comments showed that pressure from a strong dollar and high yields is likely to rout risk appetite for longer than expected. Still, losses this week were somewhat tempered by growing expectations that the Fed will carry out a smaller rate hike in December. Traders are pricing in a 62% chance of a 50 bps hike at the Fed’s next meeting. Bullion prices plummeted this year, recently hitting an over two-year low as rising yields drove up the opportunity cost of holding gold. The metal has largely lost its safe-haven status this year, and also appears to have failed as an inflation hedge. With U.S. inflation staying stubbornly high this year, rising interest rates are expected to pressure bullion prices in the near-term. While the red metal was boosted this week by rumors that major importer China plans to lift strict COVID restrictions, a lack of official comments on such a move brewed uncertainty in markets Beyond China, copper markets also have to contend with slowing economic growth across the globe, as inflation and interest rates keep rising. This notion weighed heavily on the red metal this year. Still, tightening supplies may boost copper prices in 2023, especially if pressure from high interest rates eventually eases.

 

 
Intraday RESISTANCE LEVELS
3rd November 2022 R1 R2 R3
GOLD-XAU 1,640-1,648 1,670 1,679-1,690
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 0.9800-0.9860 0.9910-0.9960 1.0099-1.0105
GBP/USD 1.1370-1.1455 1.1495-1.1610 1.1670-1.1725
USD/JPY 148.00-148.80 149.50 150.00-150.70

Intraday SUPPORTS LEVELS
3rd November 2022 S1 S2 S3
GOLD-XAU 1,630-1,627 1,616 1,600-1,590
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 0.9740-0.9680 0.9600 0.9565-0.9535
GBP/USD 1.1310-1.1270 1.1210 1.1150-1.1050
USD/JPY 147.50-147.00 145.95-145.30 144.50-143.80

Intra-Day Strategy (3rd 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 Wednesday made its intraday high of US$1669.30/oz and low of $1634.85/oz. Gold is down by 0.764% at US$1635.08/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     1,630-1,627
S2     1,616
S3     1,600-1,590
Intraday Resistance Levels
R1     1,640-1,648
R2     1,670
R3     1,679-1,690

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 Wednesday made its intraday high of US$20.07/oz and low of US19.20/oz settled down by 2.00% at US$19.21/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 19.50-23.40 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$88.65/bbl, an intraday low of US$87.09/bbl, and settled up by 0.716% to close at US$88.66/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 0.9800-1.0364, 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 0.9740-0.9610 with risk below 0.9610, targeting 1.0099-1.0105 and 1.0130-1.0195.

 
Intraday Support Levels
S1     0.9740-0.9680
S2     0.9600
S3     0.9565-0.9535

Intraday  Resistance Levels
R1     0.9800-0.9860
R2     0.9910-0.9960
R3     1.0099-1.0105

TECHNICAL INDICATORS
Name   Value Action
14DRSI   44.556 Buy
20-DMA   0.9860 Sell
50-DMA   0.9910 Sell
100-DMA   1.0076 Sell
200-DMA   1.0405 Sell
STOCH(5,3)   3.789 Buy
MACD(12,26,9)   0.0005 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.1385/GBP, a high of US$1.1564/GBP, and settled the day up 0.836% to close at US$1.1386/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 1.1310-1.1100 with a target of 1.1370-1.1455-1.1610 and 1.1670-1.1725 with a stop loss closing below 1.0640 Sell in between 1.1370-1.1825 with targets at 1.1310-1.12701-1.1210 and 1.1150-1.1050 with stop loss should be 1.1825.

 
Intraday Support Levels
S1     1.1310-1.1270
S2     1.1210
S3     1.1150-1.1050

Intraday Resistance Levels
R1     1.1370-1.1455
R2     1.1495-1.1610
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 Wednesday made an intra‐day low of JPY145.66/USD and made an intraday high of JPY148.36/USD and settled the day up by 0.311% at JPY147.76/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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