AAFX TRADING

Daily Market Lookup

  • Most Asian currencies rose sharply on Friday, while the dollar hit a two-month low as softer-than-expected U.S. inflation data ramped up expectations that the Federal Reserve will slow its pace of interest rate hikes. Sentiment was also aided by Hong Kong relaxing some COVID curbs, which spurred renewed speculation that China could do the same in the near-term China’s yuan rose 0.3% to 7.1669 against the dollar, its strongest level in over two weeks. Local stock markets rallied on the prospect of some relaxation in COVID curbs. But Chinese authorities have dismissed recent speculation over such a move, as the country faces its worst outbreak since May. Broader Asian currencies rose, while the dollar sank as investors positioned for a smaller interest rate hike by the Fed in December. The South Korean won was the best performer in Asia, rising 1.7% to a near three-month high, while the Malaysian ringgit led gains across Southeast Asia with a 1.2% jump. The Taiwan dollar and Indian rupee both drifted higher after rallying sharply in the prior session, while the Australian dollar rose 0.1% to a 1-½ month high. Bucking the trend on Friday, the Japanese yen fell 0.6% after data showed producer price inflation grew at its fastest pace in over 40 years in October. But the currency stuck to a two-month high against the dollar after surging 3% in the prior session. The dollar index and dollar index futures fell 0.2% each, with both indicators languishing at a two-month low after data showed U.S. CPI inflation grew 7.7% in October, its slowest pace in nine months. The reading gives the Federal Reserve impetus to hike interest rates by a relatively smaller 50 basis points in December. Markets are also positioning for such a move, with traders pricing in an over 80% chance of the Fed hiking rates at a slower clip. A bevy of Fed members also said this week that they support such a move to avoid damaging the economy. A slower pace of interest rate hikes is beneficial for Asian currencies, as it keeps gains in the dollar and Treasury yields subdued. But given that inflation is still well above the Fed’s 2% annual target, the bank signaled it is likely to keep raising interest rates until it sees more favorable trends for prices.
  • The dollar hovered around two-month lows on Friday after falling sharply on data that showed U.S. inflation eased more than expected, with Treasury yields also down as investors positioned for a smaller interest rate hike by the Federal Reserve in December. The dollar index and dollar index futures were flat on Friday after plummeting 2.2% in the prior session to their lowest point since mid-September. 10-year U.S. Treasury yields fell below 4% and hit an over one-month low. Data on Thursday showed U.S. CPI inflation grew 7.7% in October, its slowest pace in nine months. The reading showed that a series of sharp interest rate hikes by the Fed this year were now beginning to have the intended effect of bringing down inflation. It also drove up expectations that the Fed will now slow its pace of rate hikes in the coming months. Data from exchange operator CME showed that market expectations for a 50 basis point (bps) hike by the Fed in December surged to an over 80% probability from the previous day’s reading of 56.8%. Expectations for peak U.S. interest rates also dropped below 5%. This shift comes amid an increasing number of Fed members expressing support for smaller rate hikes in the coming months to avoid damaging the economy. The central bank had also signaled that it was considering such a move during its meeting earlier this month. But given that inflation is still well above the Fed’s 2% target, the central bank is unlikely to halt its hiking cycle anytime soon. Fed Chair Jerome Powell has also signaled that interest rates may peak at higher levels than expected, if inflation proves to be stubborn in coming down. Risk-driven markets rallied on the prospect of a smaller hike in December, with Wall Street indexes gaining sharply on Thursday.
  • Gold prices stuck to a 2-½ month high on Friday and were set for their best week in over eight months as signs of cooling U.S. inflation drove up hopes that the Federal Reserve will trim its pace of interest rate hikes in the coming months. Metal markets across the board were boosted by a softer-than-expected CPI inflation reading, with expectations for a smaller interest rate hike by the Fed skyrocketing after the data. U.S. CPI inflation grew 7.7% in October, its slowest pace in nine months. This served to greatly boost bullion prices, which have been otherwise battered this year as rising interest rates pushed up the opportunity cost of holding non-yielding assets. But even as U.S. inflation showed signs of slowing in October, price pressures still remained well above the Fed’s 2% target. This likely entails more interest rate hikes by the bank, albeit at a smaller pace. Fed Chair Jerome Powell recently signaled that interest rates could potentially peak at higher levels than expected, and that the Fed is willing to risk some economic damage in its fight against inflation - heralding continued pressure on most assets from higher interest rates. Industrial metals also surged after the inflation data, with copper prices hovering around 2-½ month highs on Friday. But copper markets are also expected to see tightening supply in the coming months, largely due to disruptions in major producers Chile and Peru. This is expected to support prices of the red metal in the medium-term.
  • Oil prices jumped by about 2% on Friday after health authorities in top global crude importer China eased some of the country's heavy COVID curbs. The easing curbs include shortening quarantine times for close contacts of cases and inbound travellers by two days, as well as eliminating a penalty on airlines for bringing in infected passengers. The move towards liberalising the COVID-zero policy will provide a springboard for oil markets, given that lockdowns hurt mobility and oil prices more than economic activity, he said. Prices also picked up on Friday after milder-than-expected U.S. inflation data reinforced hopes that the Federal Reserve will slow down rate hikes, boosting chances of a soft landing for the world's biggest economy. A weaker U.S. dollar also supported oil prices as it makes the commodity cheaper for buyers holding other currencies. Still, the benchmark oil contracts were headed for weekly declines of more than 2% due to rising U.S. oil inventories, and lingering fears over capped fuel demand in China amid an uptick in daily COVID cases. China's COVID-19 case load soared to its highest since the lockdown in Shanghai earlier this year. Both Beijing and Zhengzhou reported record daily cases. Besides work-from-home orders reducing mobility and fuel demand, travel across China remained subdued as people wanted to avoid the risk of being caught up in quarantine, ANZ Research analysts said in a note.

 

 
Intraday RESISTANCE LEVELS
11th November 2022 R1 R2 R3
GOLD-XAU 1,766-1,774 1,781 1,790-1,800
Silver-XAG 21.90-22.50 23.00 23.30-23.70
Crude Oil 85.85-87.00 87.90-88.90 89.60-90.30
EURO/USD 1.0099 1.0105 1.0150-1.0195
GBP/USD 1.1750-1.1820 1.1870 1.1900-1.1950
USD/JPY 142.10-143.00 143.80-144.50 145.70-145.30

Intraday SUPPORTS LEVELS
11th November 2022 S1 S2 S3
GOLD-XAU 1,750-1,736 1,724-1,716 1,700-1,690
Silver-XAG 21.05-20.70 20.10-19.80 18.90-18.30
Crude Oil 84.45-83.70 82.55-81.20 80.70-79.70
EURO/USD 0.9960-0.9910 0.9800-0.9740 0.9680- 0.9600
GBP/USD 1.1680-1.1610 1.1495 1.1350-1.1310
USD/JPY 141.20-140.80 140.20-139.50 138.50-137.80

Intra-Day Strategy (11th 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$1757.14/oz and low of $1703.70/oz. Gold is up by 2.848% at US$1755.42/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 1766-1800 keeping stop loss closing above 1800, targeting 1750-1736-1700 and 1690-1670-1652. Buy in between 1750-1690 with risk below 1640, targeting 1766-1774-1781 and 1790-1800.

 
Intraday Support Levels
S1     1,750-1,736
S2     1,724-1,716
S3     1,700-1,690
Intraday Resistance Levels
R1     1,766-1,774
R2     1,781
R3     1,790-1,800

Technical Indicators

Name   Value Action
14DRSI  

68.920

Buy
20-DMA   1683.42 Sell
50-DMA  

1687.12

Sell
100-DMA   1718.28 Sell
200-DMA   1759.13 Sell
STOCH(5,3)   94.244 Sell
MACD(12,26,9)   14.868 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$21.82/oz and low of US20.94/oz settled up by 2.97% at US$21.67/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     21.05-20.70
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 Wednesday made an intra‐day high of US$88.47/bbl, an intraday low of US$84.85/bbl, and settled down by 3.12% to close at US$84.98/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 85.85-93.40 with stop loss at 93.40; targeting 84.45-83.70-82.55 and 81.20-80.70-79.70. Buy above 84.45-79.70 with risk daily closing below 79.50; targeting 85.85-87.00-87.90 and 88.90-89.60-91.10.

 
Intraday Support Levels
S1     84.45-83.70
S2     82.55-81.20
S3     80.70-79.70

Intraday Resistance Levels
R1     85.85-87.00
R2     87.90-88.90
R3     89.60-90.30

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.910 Sell
20-DMA   86.93 Buy
50-DMA   87.35 Buy
100-DMA   90.09 Sell
200-DMA   90.74 Sell
STOCH(5,3)   6.486 Sell
MACD(12,26,9)   -0.29 Buy

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$0.9935/EUR, a high of US$1.0221/EUR, and settled the day up by 1.665% to close at US$1.0208/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 Thursday made an intra‐day low of US$1.1344/GBP, a high of US$1.1730/GBP, and settled the day up 3.15% to close at US$1.1714/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 1.1680-1.1310 with a target of 1.1725-1.1760-1.1820 and 1.1900-1.1950 with a stop loss closing below 1.0640 Sell in between 1.1750-1.1950 with targets at 1.1680-1.1610-1.1495 and 1.1370-1.1310-1.1270 with stop loss should be 1.1825.

 
Intraday Support Levels
S1     1.1680-1.1610
S2     1.1495
S3     1.1350-1.1310

Intraday Resistance Levels
R1     1.1750-1.1820
R2     1.1870
R3     1.1900-1.1950

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

58.666

Buy
20-DMA   1.1440 Sell
50-DMA   1.1451 Sell
100-DMA   1.1677 Sell
200-DMA   1.2119 Sell
STOCH(5,3)   80.572 Sell
MACD(12,26,9)   0.0071 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made an intra‐day low of JPY140.19/USD and made an intraday high of JPY146.58/USD and settled the day up by 3.76% at JPY146.96/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     141.20-140.80
S2     140.20-139.50
S3     138.50-137.80

INTRADAY RESISTANCE LEVELS
R1     142.10-143.00
R2     143.80-144.50
R3     145.70-145.30

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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