AAFX TRADING

Daily Market Lookup

  • The U.S. dollar edged higher in early European trade Wednesday, stabilizing after overnight losses amid uncertainty from the U.S. midterm elections and ahead of key inflation data later this week. The results from the U.S. midterm elections are still uncertain, with the Republicans seemingly heading towards taking control of the House of Representatives. However, the Senate race looks too close to call at this point with many of the most competitive races still undecided. Also looming on the horizon is Thursday’s crucial U.S. consumer inflation data, which is expected to show the annual CPI figure falling to 8.0% in October from 8.2% the prior month, while the core figure, which excludes volatile food and energy prices, is seen dropping to an annual 6.5%, from 6.6%. The dollar has been under downward pressure of late from expectations that the Federal Reserve will ease back from its aggressive hiking cycle shortly, potentially as early as December. However, an upside inflation surprise could likely change that thinking, helping boost the U.S. currency. ECB policymakers have made it clear that further rate hikes are on the way, after the central bank lifted interest rates by 75 basis points late last month even as growth in the Eurozone suffers. Economists surveyed by Bloomberg were split on the subject, with 17 of 32 forecasts predicting a hike of some size, while 15 say the rate will remain unchanged.
  • The dollar slid on Tuesday as rising German bond yields strengthened the euro, but a strong reading of the consumer price index later this week could reverse the currency's slide. Traders kept an eye on U.S. midterm elections, whose outcome may usher in an era of divided government in Washington that would likely foil big social spending plans by Democrats. A steady climb in German bond yields weakened the dollar on expectations of further European Central Bank tightening, which cut the spread with Treasury yields, said Marc Chandler, chief market speculation at Bannockburn Global Forex. CPI data is due to be announced on Thursday, with economists forecasting the monthly and annual core numbers to advance 0.5% and 6.5%, respectively. Signs of improving inflation, though, might not slow the Federal Reserve's policy tightening that federal fund futures forecast will peak at 5.095% in June 2023. The Fed could raise interest rates by 50 basis points when policymakers meet in December, again by the same amount in February and another 25 basis points at their March meeting, Moya said. The interest rate differential with other currencies favors dollar strength, as do potentially severe recession risks abroad and China's ongoing struggles with COVID restrictions, he said.
  • Gold prices jumped to a one-month high on Wednesday, benefiting from resurgent safe haven demand and a weakening dollar as investors awaited the results of the U.S. midterm elections, with broader metal prices also gaining. Weakness in the dollar, which slipped to an over 1-½ month low this week, greatly aided a rally in metal markets. The dollar index traded down 0.5% at 109.61 early-Wednesday. U.S. Treasury yields also tumbled over 2%. Bullion prices shot up this week as some uncertainty over the results of the U.S. midterm elections drove safe haven buying into the yellow metal. While markets are broadly expecting a mixed result, a clear-cut majority for the incumbent Democrats or re-elected Republicans could herald changes in monetary and fiscal policy. Speculation over a smaller interest rate hike by the Federal Reserve in December also weighed on the dollar, after several Fed officials said they supported such a move. Markets are now pricing in a nearly 60% chance the central bank will raise rates by 50 basis points (bps) in December, smaller than November’s hike of 75 bps. CPI inflation data due on Thursday is expected to shine more light on this front. The reading is widely expected to show inflation remained stubbornly high in October, which could see the Fed position for a bigger rate hike. The dollar also saw some profit taking, as investors locked in gains from a stellar rally by the greenback this year. While prices of the red metal had initially retreated this week on fears of more Chinese demand disruptions, weakness in the dollar spurred buying into the metal, which has fallen sharply this year.
  • Oil prices edged lower as industry data showed U.S. crude stockpiles rose more than expected and on worries a rebound in COVID-19 cases in top importer China would hurt fuel demand. U.S. crude oil inventories rose by about 5.6 million barrels for the week ended Nov. 4, according to market sources citing American Petroleum Institute figures, while seven analysts polled by Reuters estimated on average that crude inventories would rise by about 1.4 million barrels. Last week, the market had latched on to hopes that China might be moving toward relaxing COVID-19 restrictions but over the weekend health officials said they would stick to their "dynamic-clearing" approach to new infections. COVID-19 cases in Guangzhou and other Chinese cities have surged, with millions of residents of the global manufacturing hub being required to have COVID-19 tests on Wednesday. CMC Markets analyst Tina Teng said despite tight supply in the physical markets, China's slowdown in demand has a major impact on the oil futures markets. In another bearish sign, API data showed gasoline inventories rose by about 2.6 million barrels, against analysts' forecasts for a 1.1 million drawdown. The market will be looking out for official U.S. inventory data from the Energy Information Administration due at 10:30 a.m. EST (1530 GMT) for a further view on demand in the world's biggest economy. Meanwhile, supply concerns remain. The EU will ban Russian crude imports by Dec. 5 and Russian oil products by Feb. 5, in retaliation to Russia's invasion of Ukraine. Russia calls its actions in Ukraine a "special operation".Crude markets slumped 3% on Tuesday, sharply reversing recent gains as signs of slowing economic activity in China brewed more concerns over the country’s crude demand. Data on Wednesday showed Chinese factory inflation slowed for the first time in a year in October, indicating that manufacturing activity is likely to remain subdued in the near-term. China’s consumer inflation also grew less than expected last month, as COVID-19 restrictions continued to stifle economic activity. These measures are the biggest reason behind China’s weakening crude demand this year.

 

 
Intraday RESISTANCE LEVELS
9th November 2022 R1 R2 R3
GOLD-XAU 1,716-1,724 1,736 1,750-1,759
Silver-XAG 21.90-22.50 23.00 23.30-23.70
Crude Oil 87.90-88.90 89.60-90.30 91.10-92.00
EURO/USD 1.0099 1.0105 1.0150-1.0195
GBP/USD 1.1455-1.1495 1.1610 1.1680-1.1750
USD/JPY 147.00-147.50 148.00-148.80 149.50

Intraday SUPPORTS LEVELS
9th November 2022 S1 S2 S3
GOLD-XAU 1,700-1,690 1,679-1,667 1,652-1,640
Silver-XAG 21.30-20.70 20.10-19.80 18.90-18.30
Crude Oil 87.00-85.85 84.45-83.70 82.55-81.10
EURO/USD 0.9960-0.9910 0.9800-0.9740 0.9680- 0.9600
GBP/USD 1.1390-1.1310 1.1270-1.1210 1.1150-1.1095
USD/JPY 145.70-145.30 144.50-143.80 143.00-142.10

Intra-Day Strategy (9th 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$1716.81/oz and low of $1664.66/oz. Gold is up by 2.21% at US$1712.33/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 1716 keeping stop loss closing above 1716, targeting 1700-1690-1670 and 1652-1640-1628. Buy in between 1700-1640 with risk below 1640, targeting 1716-1734-1736 and 1750-1759.

 
Intraday Support Levels
S1     1,700-1,690
S2     1,679-1,667
S3     1,652-1,640
Intraday Resistance Levels
R1     1,716-1,724
R2     1,736
R3     1,750-1,759

Technical Indicators

Name   Value Action
14DRSI  

61.402

Buy
20-DMA   1667.18 Sell
50-DMA  

1681.35

Sell
100-DMA   1716.74 Sell
200-DMA   1759.19 Sell
STOCH(5,3)   93.742 Sell
MACD(12,26,9)   3.137 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$21.61/oz and low of US20.48/oz settled up by 2.735% at US$21.34/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 21.10-18.30, targeting 22.00-22.50-23.00 and 23.30-23.70 with stop loss should be placed on the breakage below 18.00. Sell in between 21.90-23.40 with stop loss above 23.40; targeting 21.30-20.70-20.10 and 19.80-18.90-18.30.

 
Intraday  Support Levels
S1     21.30-20.70
S2     20.10-19.80
S3     18.90-18.30

Intraday  Resistance Levels
R1     21.90-22.50
R2     23.00
R3     23.30-23.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   67.179 Buy
20-DMA   19.88 Buy
50-DMA   19.59 Buy
100-DMA   19.93 Buy
200-DMA   20.91 Buy
STOCH(5,3)   89.110 Sell
MACD(12,26,9)   -0.112 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$91.36/bbl, an intraday low of US$87.37/bbl, and settled down by 3.46% 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 87.90-93.40 with stop loss at 93.40; targeting 87.90-85.85-83.70 and 82.55-81.10. Buy above 87.00-81.10 with risk daily closing below 81.10; targeting 87.90-88.90-89.60 and 91.10-92.00-93.35

 
Intraday Support Levels
S1     87.00-85.85
S2     84.45-83.70
S3     82.55-81.10

Intraday Resistance Levels
R1     87.90-88.90
R2     89.60-90.30
R3     91.10-92.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   51.302 Sell
20-DMA   87.39 Buy
50-DMA   87.55 Buy
100-DMA   90.25 Sell
200-DMA   90.83 Sell
STOCH(5,3)   38.486 Sell
MACD(12,26,9)   -0.29 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$0.9971/EUR, a high of US$1.0095/EUR, and settled the day up by 2.141% to close at US$1.0071/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 0.9860 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     0.9960-0.9910
S2     0.9800-0.9740
S3     0.9680- 0.9600

Intraday  Resistance Levels
R1     1.0099
R2     1.0105
R3     1.0150-1.0195

TECHNICAL INDICATORS
Name   Value Action
14DRSI   54.784 Buy
20-DMA   0.9874 Sell
50-DMA   0.9912 Sell
100-DMA   1.0071 Sell
200-DMA   1.0396 Sell
STOCH(5,3)   61.950 Buy
MACD(12,26,9)   0.0005 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.1429/GBP, a high of US$1.1598/GBP, and settled the day up 0.217% to close at US$1.1537/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 1.1390-1.1100 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 1.1450-1.1825 with targets at 1.1370-1.1310-1.1270 and 1.1210-1.1150 with stop loss should be 1.1825.

 
Intraday Support Levels
S1     1.1390-1.1310
S2     1.1270-1.1210
S3     1.1150-1.1095

Intraday Resistance Levels
R1     1.1455-1.1495
R2     1.1610
R3     1.1680-1.1750

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

52.206

Buy
20-DMA   1.1390 Sell
50-DMA   1.1433 Sell
100-DMA   1.1678 Sell
200-DMA   1.2128 Sell
STOCH(5,3)   78.558 Sell
MACD(12,26,9)   -0.0083 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made an intra‐day low of JPY145.30/USD and made an intraday high of JPY146.93/USD and settled the day down by 0.681% at JPY145.66/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 147.00-151.70 with risk above 151.70 targeting 145.70-145.30-144.50 and 143.80-143.00-142.10. Long positions above 145.30-142.10 with targets of 147.00-148.00-148.80 and 149.50-150.00 with stops below 143.00.

 
Intraday Support Levels
S1     145.70-145.30
S2     144.50-143.80
S3     143.00-142.10

INTRADAY RESISTANCE LEVELS
R1     147.00-147.50
R2     148.00-148.80
R3     149.50

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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