AAFX TRADING

Daily Market Lookup

  • Most Asian currencies sank on Wednesday as a potential Russian missile strike on Poland drove investors away from risk-driven assets, while the dollar steadied from recent losses as investors sought safe haven in the greenback. The dollar index and dollar index futures both steadied around 106.58, recovering from mild losses in the prior session, while gold also saw increased bids. Wednesday’s gains saw the dollar brush off data that showed U.S. producer inflation at a 14-month low. The reading gave further credence to bets that inflation has likely peaked in the country, which is expected to elicit a less hawkish stance by the Federal Reserve. Several Fed members also called for smaller rate hikes, while bets that the Fed will enact a smaller, 50 basis point hike in December grew sharply this week. While this scenario is positive for Asian currencies in the near-term, sentiment was battered on Wednesday as a missile of Russian make killed two people in eastern Poland. The move, if linked to Russia, would mark the first time since Russia’s invasion of Ukraine that Moscow has attacked a member of the North Atlantic Treaty Organization, and could spark a potential escalation in the conflict. Risk assets saw steep losses on Wednesday in anticipation of more details on the strike. More signs of economic duress in China also further soured sentiment towards Asian markets, with data showing Chinese house prices sank to a seven-year low in October. This followed dismal readings on industrial production and retail sales earlier this week, which indicated that COVID-induced rifts in Asia’s largest economy were deepening. The country is also struggling with its worst COVID outbreak in six months, which has brewed more uncertainty over its economic prospects. Overnight gains in oil prices dragged the Indian rupee down 0.6%, while the Indonesian rupiah led losses across Southeast Asia with a 0.5% decline. Losses in the Australian dollar were somewhat tempered by data showing local wages grew more than expected in the quarter to September. The reading gives the Reserve Bank more headroom to keep raising interest rates. The safe-haven U.S. dollar's early gains fizzled following volatile trading on Wednesday as traders took comfort from U.S. President Joe Biden's remarks that a missile that caused a explosion in Poland may not have been fired from Russia. NATO-member Poland and Ukraine say the blast that killed two in a town close to their border was caused by a Russian-made rocket, raising concerns of an escalation in the war. However, Biden said the weapon was probably not fired by Russia, although the investigation was ongoing. According to U.S. officials, initial findings suggested that the missile that hit Poland had been fired by Ukrainian forces at an incoming Russian missile, the Associated Press said. Russia denies it was responsible for the explosion. Biden was speaking after global leaders held an emergency meeting on Wednesday following the deadly explosions that Ukraine and Polish authorities said were caused by Russian-made missiles. Turbulent trading during the Asian session saw major currencies swing between gains and losses, with the U.S. dollar index, which measures the greenback against six peers and weights the euro most heavily, rising as much as 0.31% to 106.76 before last trading 0.05% lower at 106.38. The Japanese yen was about 0.3% weaker at 139.75 per dollar, influenced by a rise in U.S. long-term Treasury yields during Tokyo trading as haven demand eased. Bond yields move inversely to prices.
  • Gold prices hit a three-month high on Wednesday after a Russian missile strike on Polish territory ramped up fears of a NATO-led escalation in the Ukraine conflict, boosting demand for traditional safe haven assets. Investors sought renewed safe haven exposure after a missile of Russian make fell in the eastern part of Poland and killed two people. The incident marks the first time that Russian weapons have struck NATO territory, with Ukrainian President Volodymyr Zelenskyy calling the strike a “very significant escalation” of the war. NATO members said they were reviewing the incident, and warned consequences for the strike if it was intentional. Bullion prices had surged to two-year highs during the initial days of the Russian invasion of Ukraine earlier this year. An escalation in the conflict could potentially drive up prices of the yellow metal again. Weakness in the dollar also benefited gold prices, after data showed U.S. producer inflation hit a 14-month low in October. The reading, coupled with softer-than-expected consumer inflation data released last week, saw markets ramping up bets that U.S. inflation had eased. This could see the Federal Reserve softening its hawkish rhetoric. The central bank is already expected to hike interest rates by a relatively smaller margin in December. Other precious metals also benefited from safe haven buying. Silver futures rose 0.5%, while platinum futures hovered near eight-month highs.Among industrial metals, copper prices fell for a third straight session, as concerns over slowing demand in China largely offset signs of tightening supply. This largely offset signs of tighter copper supply in the near-term, as workers at Chile’s Escondida mine, the world’s largest copper mine, announced a strike. The move, coupled with U.S. sanctions against Russian exporters, is expected to severely crimp global copper supply.
  • Oil prices slid on Wednesday as COVID-19 cases in China continued to climb, sparking worries of lower fuel demand in the world's top crude importer that outweighed concerns about an escalation of geopolitical tensions and tighter oil supply. Oil prices settled higher on Tuesday after oil supply to parts of Eastern and Central Europe via a section of the Druzhba pipeline was temporarily suspended, according to oil pipeline operators in Hungary and Slovakia The disruption came concurrent with an explosion in a village in eastern Poland near the Ukraine border that killed two people and raised the possibility that the Russian-Ukraine conflict could spill over. But after the initial "knee-jerk rally in oil prices, the tepid market follow-through reflects the significant prudence that will be taken to avoid an escalation," said Stephen Innes, managing partner at SPI Asset Management. U.S. President Joe Biden's comments that the missile was probably not fired from Russia also helped to ease immediate escalation worries, Innes said. In China, rising COVID-19 cases are weighing on sentiment despite the hopes raised by easing virus restrictions this week. That has dampened the oil demand growth outlook, with the International Energy Agency (IEA) forecasting demand growth to slow to 1.6 million bpd in 2023 from 2.1 million bpd this year. Earlier, the Organization of the Petroleum Exporting Countries (OPEC) cut its forecast for 2022 global oil demand growth for a fifth time since April citing mounting economic challenges. The safe-haven greenback also firmed as markets took stock of geopolitical risks. A stronger U.S. dollar makes dollar-denominated commodities more expensive for holders of other currencies and tends to weigh on oil and other risk assets. Industry data showing a bigger-than-expected drop in U.S. crude stockpiles provided some support to oil prices. U.S. crude oil inventories fell by about 5.8 million barrels for the week ended Nov. 11, according to market sources citing American Petroleum Institute figures. By comparison, seven analysts polled by Reuters estimated on average that crude inventories dropped by about 400,000 barrels. Official U.S. inventory data from the Energy Information Administration is due at 10:30 a.m. EST (1530 GMT). In the United States, producer prices increased less than expected in October, suggesting inflation was starting to ease, which may allow the Federal Reserve to slow its aggressive pace of interest rate hikes.

 

 
Intraday RESISTANCE LEVELS
16th November 2022 R1 R2 R3
GOLD-XAU 1,774-1,781 1,790 1,800-1,807
Silver-XAG 21.90-22.10 22.50-23.00 23.30-23.70
Crude Oil 85.85-87.00 87.90-88.90 89.60-90.30
EURO/USD 1.0390-1.0450 1.0490-1.0520 1.0546
GBP/USD 1.1900-1.1950 1.2030 1.2090-1.2120
USD/JPY 140.20-140.80 141.20-142.10 143.00-143.80

Intraday SUPPORTS LEVELS
16th November 2022 S1 S2 S3
GOLD-XAU 1,766-1,759 1,750-1,736 1,724-1,716
Silver-XAG 21.50-21.05 20.70-20.10 19.80-18.90
Crude Oil 84.45-83.70 82.55-81.20 80.60-79.50
EURO/USD 1.0290-1.0210 1.0150-1.0105 1.0099-1.0050
GBP/USD 1.1870-1.1790 1.1750-1.1680 1.1610-1.1495
USD/JPY 139.50-138.50 137.80 137.00-136.60

Intra-Day Strategy (16th 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$1786.43/oz and low of $1766.98/oz. Gold is up by 0.438% at US$1778.66/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 1774-1800 keeping stop loss closing above 1800, targeting 1766-1759-1750 and 1736-1700-1690. Buy in between 1759-1690 with risk below 1640, targeting 1774-1781 and 1790-1800.

 
Intraday Support Levels
S1     1,766-1,759
S2     1,750-1,736
S3     1,724-1,716
Intraday Resistance Levels
R1     1,774-1,781
R2     1,790
R3     1,800-1,807

Technical Indicators

Name   Value Action
14DRSI  

69.170

Buy
20-DMA   1707.66 Buy
50-DMA  

1697.32

Buy
100-DMA   1721.73 Buy
200-DMA   1759.68 Buy
STOCH(5,3)   90.244 Sell
MACD(12,26,9)   14.868 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$22.24/oz and low of US21.37/oz settled down by 1.85% at US$21.55/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 21.50-18.30, 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 22.10-23.40 with stop loss above 23.40; targeting 21.70-21.30-20.70-20.10 and 19.80-18.90-18.30.

 
Intraday  Support Levels
S1     21.50-21.05
S2     20.70-20.10
S3     19.80-18.90

Intraday  Resistance Levels
R1     21.90-22.10
R2     22.50-23.00
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$88.06/bbl, an intraday low of US$83.53/bbl, and settled up by 1.818% to close at US$86.18/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 85.90-93.40 with stop loss at 93.40; targeting 84.45-83.70-82.55 and 81.20-80.60-79.50. Buy above 84.40-79.70 with risk daily closing below 79.50; targeting 85.85-87.90 and 88.90-89.60-91.10.

 
Intraday Support Levels
S1     84.45-83.70
S2     82.55-81.20
S3     80.60-79.50

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.370 Sell
20-DMA   86.62 Buy
50-DMA   87.18 Buy
100-DMA   90.02 Sell
200-DMA   90.69 Sell
STOCH(5,3)   37.486 Sell
MACD(12,26,9)   0.501 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.0279/EUR, a high of US$1.0480/EUR, and settled the day down by 0.261% to close at US$1.0348/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 1.0365-1.0545, targeting 1.0290-1.0210-1.0150 and 1.0105-1.0099-1.0050 with stop-loss at daily closing above 1.0545. Buy above 1.0290-1.0050 with risk below 1.0050 targeting 1.0350-1.0390-1.0450 and 1.0490-1.0520-1.0546.

 
Intraday Support Levels
S1     1.0290-1.0210
S2     1.0150-1.0105
S3     1.0099-1.0050

Intraday  Resistance Levels
R1     1.0390-1.0450
R2     1.0490-1.0520
R3     1.0546

TECHNICAL INDICATORS
Name   Value Action
14DRSI   68.782 Buy
20-DMA   1.0040 Sell
50-DMA   0.9980 Buy
100-DMA   1.0088 Buy
200-DMA   1.0386 Buy
STOCH(5,3)   93.455 Buy
MACD(12,26,9)   0.0109 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.1740/GBP, a high of US$1.2028/GBP, and settled the day up 0.927% to close at US$1.1862/GBP.

Technicals in Focus:

On daily charts, prices are sustaining below 20DMA (1.2113) is becoming a resistance level. 14-D RSI is currently in a neutral 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 1.1870-1.1310 with a target of 1.1900-1.1950-1.2030 and 1.2090-1.2120 with a stop loss closing below 1.0640. Sell in between 1.1900-1.2120 with targets at 1.1870-1.1790-1.1750 and 1.1680-1.1610-1.1495 with stop loss should be 1.2120.

 
Intraday Support Levels
S1     1.1870-1.1790
S2     1.1750-1.1680
S3     1.1610-1.1495

Intraday Resistance Levels
R1     1.1900-1.1950
R2     1.2030
R3     1.2090-1.2120

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

61.957

Buy
20-DMA   1.1552 Buy
50-DMA   1.1498 Buy
100-DMA   1.1689 Buy
200-DMA   1.2119 Sell
STOCH(5,3)   78.021 Sell
MACD(12,26,9)   0.0012 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made an intra‐day low of JPY137.66/USD and made an intraday high of JPY140.62/USD and settled the day down by 0.442% at JPY139.26/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 140.20-144.50 with risk above 144.50 targeting 140.20-139.50-138.50-137.80 and 137.00-136.60. Long positions above 139.60-136.60 with targets of 140.80-141.20-142.10 and 143.00-143.80-144.50 with stops below 143.00.

 
Intraday Support Levels
S1     139.50-138.50
S2     137.80
S3     137.00-136.60

INTRADAY RESISTANCE LEVELS
R1     140.20-140.80
R2     141.20-142.10
R3     143.00-143.80

TECHNICAL INDICATORS
Name   Value Action
14DRSI   34.453 Buy
20-DMA   144.67 Buy
50-DMA   144.15 Buy
100-DMA   140.81 Buy
200-DMA   134.44 Buy
STOCH(9,6)   13.733 Buy
MACD(12,26,9)   -1.290 Sell

AAFX TRADING
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