AAFX TRADING

Daily Market Lookup

  • The dollar gained against major currencies on Thursday after Federal Reserve Chair Jerome Powell signalled U.S. interest rates will likely peak at a higher level than markets expected, while sterling fell after the Bank of England raised rates but warned of a "very challenging outlook." The BoE lifted UK interest rates to 3% from 2.25% in its largest single increase since 1989, as it battles the twin forces of a slowing economy and red-hot inflation. The central bank forecasts inflation will hit a 40-year high 11% during the current quarter, but it pushed back against expectations for further steep rate hikes. The bank said Britain has already entered a recession that could potentially last two years, longer than during the 2008-09 financial crisis. The Fed on Wednesday raised interest rates by 75 basis points to a target range of 3.75%-4.00%, the fourth such increase in a row, as Powell dampened hopes of a pivot to an easier monetary policy. Juan Perez, director of trading at Monex USA in Washington, said the dollar's dominance will continue "as thoughts of a recession grow for the global economy, which will drive more flight to safety bids towards the buck." Thursday's data showed a U.S. economy that still seemed to be humming along. The number of Americans filing new claims for unemployment benefits unexpectedly fell to a seasonally adjusted 217,000 for the week ended Oct. 29, while nonfarm productivity, which measures hourly output per worker, rose at a 0.3% annualized rate last quarter after slumping at a 4.1% pace in the April-June quarter. The market is now focused on Friday's U.S. non-farm payrolls report for October, with Wall Street economists forecasting 200,000 new jobs and 3.6% unemployment rate, according to a Reuters poll. The pound dropped to a two-week low against the dollar and a one-week trough versus the euro in wake of the BoE statement. Sterling was last down nearly 2% against the dollar at $1.1165, while the euro rose 1.4% to 87.37 pence. The BoE's decision - the biggest rate rise in 33 years apart from a failed attempt to support the pound on Black Wednesday in 1992 - was in line with economists' expectations in a Reuters poll, but was not unanimous. The pound, like most major currencies, had already been on the backfoot against the dollar on Thursday.
  • Most Asian currencies rose slightly on Friday, although sentiment remained under pressure from a hawkish Federal Reserve, with focus now turning to upcoming U.S. payrolls data for more cues on the U.S. economy. But the yuan was set to close the week 0.7% lower, after China dismissed rumors that the country plans to scale back its policy on COVID-19 restrictions by next year. The zero-COVID policy is at the heart of China’s economic woes this year, and has ground economic growth to a halt this year. Rumors over its possible reversal spurred a brief rally in Chinese markets this week. The dollar retreated slightly on Friday, but stayed close to a two-week high after the Federal Reserve hiked interest rates as expected. The central bank forecast U.S. interest rates to peak at a higher level than initially expected, which is set to boost the greenback in the coming months. Focus is now on U.S. nonfarm payrolls data for October, due later in the day. While the reading is expected to show growth in the jobs market eased slightly from the previous month, any signs of resilience in the space is likely to give the Fed enough economic headroom to keep raising interest rates. The Japanese yen rose 0.2%, taking some near-term support from weakness in the dollar. Data also showed that Japan’s services sector grew at its fastest pace in four months in October, helped by the withdrawal of most COVID-related curbs. But the yen was set to break a two-week gaining streak as a widening gulf between Japanese and U.S. interest rates kept short bets high. Among Southeast Asian currencies, the Philippine peso jumped 0.8% after data showed inflation grew far more than expected in October. The reading is likely to invite more interest rate hikes by the Philippine central bank, boosting the peso.
  • Oil prices turned higher on Friday as the dollar eased, but gains were capped by recession fears and fresh concerns that COVID outbreaks will dent fuel demand in China. Analysts said while demand concerns are weighing on the market, supply is still expected to be tight, putting a floor under oil prices, with Europe's embargo on Russian crude starting on Dec. 5 and U.S. crude stockpiles falling. Fears of a recession in the United States, the world's biggest oil consumer, grew on Thursday after Federal Reserve Chairman Jerome Powell said it was "very premature" to be thinking about pausing interest rate hikes. Adding to the gloom, the Bank of England warned on Thursday that it thinks Britain has entered a recession and the economy might not grow for another two years. Underscoring demand concerns, Saudi Arabia lowered December official selling prices (OSPs) for its flagship Arab Light crude to Asia by 40 cents to a premium of $5.45 a barrel versus the Oman/Dubai average. The cut was in line with trade sources' forecasts, which were based on a weaker outlook for Chinese demand. China stuck to its strict COVID-19 curbs as cases rose on Thursday to their highest since August. Investors earlier in the week had thought the world's largest oil importer may be moving toward easing restrictions to boost the economy. Oil prices rose on Friday as markets awaited the passing of a price cap on Russian exports, although concerns over Chinese demand and a hawkish Federal Reserve put crude on course to end the week lower. Reuters reported that the Group of Seven (G7) rich countries agreed to set a fixed price when curbs on Russian oil exports kick in later this month. The passing of the price caps is expected to eventually tighten crude supplies, given that Russia warned it will stop supplying oil to any countries that agree to the curbs. The Russian oil price caps are intended to dent Moscow's oil revenues in response to the country’s invasion of Ukraine. But markets are doubtful over the effectiveness of the curbs, given that major Russian importers China and India have given little indication they will comply. The curbs will also effectively cut off any Russian fuel exports to the west, which is expected to severely curb supplies in the coming months. Oil prices started the week on strong footing amid rumors that China was planning to scale back its strict zero-COVID policy. But prices reversed most of their gains after Beijing dismissed the rumor The zero-COVID policy is at the heart of China’s economic slowdown this year, and has severely crimped crude demand in the country. Crude prices were also dented by strength in the dollar, after the Federal Reserve hiked interest rates and presented a more hawkish stance than markets were expecting. The move ramped up concerns that the Fed is willing to risk a U.S. recession in its fight against inflation - a scenario that is negative for crude demand Oil prices fell sharply this year amid growing concerns that high inflation and rising interest rates will slow global economic growth, weighing on crude demand. But data released this week showed a much bigger drawdown in weekly U.S. inventories than expected, signaling that crude demand in the world’s largest economy remained steady. The OPEC, which announced a two million barrel per day supply cut in October, flagged stronger crude demand in the medium to long term. The cartel also assured investors this week that it stands ready to help stabilize oil prices.

 

 
Intraday RESISTANCE LEVELS
4th November 2022 R1 R2 R3
GOLD-XAU 1,652-1,670 1,679 1,690-1,700
Silver-XAG 19.80-20.10 20.60 21.30-21.90
Crude Oil 89.60 90.30-91.10 92.00-93.35
EURO/USD 0.9800-0.9860 0.9910-0.9960 1.0099-1.0105
GBP/USD 1.1270-1.1310 1.1370-1.1455 1.1495-1.1610
USD/JPY 148.00-148.80 149.50 150.00-150.70

Intraday SUPPORTS LEVELS
4th November 2022 S1 S2 S3
GOLD-XAU 1,640-1,630 1,627-1,616 1,600-1,590
Silver-XAG 18.90-18.30 17.80-17.50 17.10-16.60
Crude Oil 88.90-87.90 85.85-83.70 83.00-81.60
EURO/USD 0.9740-0.9680 0.9600 0.9565-0.9535
GBP/USD 1.1210-1.1150 1.1095-1.1060 1.0990-1.0920
USD/JPY 147.50-147.00 145.95-145.30 144.50-143.80

Intra-Day Strategy (4th 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 Thursday made its intraday high of US$1640.87/oz and low of $1616.58/oz. Gold is down by 0.345% at US$1629.51/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 1652-1714 keeping stop loss closing above 1714, targeting 1640 and 1628-1614-1600. Buy in between 1640-1600 with risk below 1600, targeting 1652-1670-1679 and 1690-1700-1714.

 
Intraday Support Levels
S1     1,640-1,630
S2     1,627-1,616
S3     1,600-1,590
Intraday Resistance Levels
R1     1,652-1,670
R2     1,679
R3     1,690-1,700

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 Thursday made its intraday high of US$19.53/oz and low of US18.82/oz settled up by 1.249% at US$19.45/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     19.80-20.10
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 Thursday made an intra‐day high of US$88.95/bbl, an intraday low of US$87.09/bbl, and settled up by 0.716% to close at US$87.31/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 89.90-93.40 with stop loss at 93.40; targeting 88.90-87.90-85.85 and 83.70-83.00-81.60. 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     88.90-87.90
S2     85.85-83.70
S3     83.00-81.60

Intraday Resistance Levels
R1     89.60
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 Thursday made an intraday low of US$0.9729/EUR, a high of US$0.9839/EUR, and settled the day down by 0.6789% to close at US$0.9748/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 Thursday made an intra‐day low of US$1.1151/GBP, a high of US$1.1421/GBP, and settled the day down 2.01% to close at US$1.1157/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     1.1210-1.1150
S2     1.1095-1.1060
S3     1.0990-1.0920

Intraday Resistance Levels
R1     1.1270-1.1310
R2     1.1370-1.1455
R3     1.1495-1.1610

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 JPY147.10/USD and made an intraday high of JPY148.44/USD and settled the day up by 0.273% at JPY148.17/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