AAFX TRADING

Daily Market Lookup

  • The Japanese yen crashed to a six-year low versus the dollar on Monday, and headed for its biggest monthly loss since 2016 after the Bank of Japan moved to contain rising bond yields, even as U.S. Treasury yields soared to new multi-year highs. The Bank of Japan has pledged to keep policy loose, in contrast with most other major central banks which are in rate hike mode, especially the U.S. Federal Reserve which is widely expected to deliver a half-point interest rate rise in May. Treasury yields rose further on Monday, with 10-year yields above 2.5% at a three-year high, boosting the dollar's index to a two-week high. To stop the global yield rises from spilling into Japanese bond markets, the BOJ offered to buy an unlimited amount of debt with maturities of more than five years and up to 10 years. It pledged to do this for three consecutive days. The Japanese currency also lost ground against the euro, which is increasingly underpinned by expectations the European Central Bank will join the rate hike club this year. The euro gained 0.8% at 135.6 yen, a four-year high. The dollar rose 0.4% against a basket of currencies, with 130 bps of interest rate rises priced until the July meeting. While money markets now see the ECB kicking off rate rises in July, its monetary tightening will lag the Fed, keeping the euro under pressure against the greenback. Its fortunes this week could be determined by inflation figures from major European economies, with the bloc's harmonised HICP inflation seen edging up to 6.5% in March. One possible headwind for the Aussie is the COVID-19 situation in China, after Shanghai said on Sunday it would lock down the city to carry out COVID-19 testing.
  • The U.S. dollar traded higher Monday, making gains against the Japanese yen in particular, benefiting from the monetary policy divergence between the two countries. The Bank of Japan moved into the market earlier Monday, offering to buy unlimited amounts of 10-year Japanese government bonds at 0.25% in order to prevent these bond yields from rising above its key target after the benchmark 10-year JGB yield crept up to a six-year high of 0.245%. This dovish stance contrasts vividly with the U.S. Federal Reserve hiking rates by a quarter percentage point a couple of weeks ago and Fed Chair Jerome Powell indicating that the central bank is prepared to raise rates in half-point increments to combat inflation if warranted. Friday’s U.S. nonfarm payrolls report for March could help to cement further tightening by the Fed, with economists expecting the U.S. economy to have added 475,000 jobs, after 678,000 were created in February, while average hourly earnings are forecast to increase 5.5% on a year-over-year basis. Additionally, Thursday sees the release of personal consumption expenditures data, a gauge of inflation closely watched by the Fed. The core PCE price index is expected to rise 5.5% on an annual basis, staying well above the Fed’s 2% inflation target. Inflation figures from major European economies and the Eurozone are due from Wednesday, and while the European Central Bank policymakers will be keen to move to address prices at historically high levels they are also very aware of the headwinds to growth in the region caused by the Ukraine war.
  • U.S. oil exports have climbed following Russia's invasion of Ukraine, and barrels of domestic oil that would typically go to the Cushing, Oklahoma, storage hub are instead being exported via the Gulf Coast, traders said. The invasion threw the oil market into disarray, as companies stopped buying Russian oil and prices skyrocketed. Worldwide buyers are looking to source crude wherever they can, and exports have risen in recent weeks from the United States, the world's largest crude producer. Cushing, Oklahoma, known colloquially as the crossroads of the oil industry, is where holders of U.S. West Texas Intermediate futures contracts take delivery. Its vast storage capacity means it is still considered a guidepost for U.S. inventories even as barrels have shifted to the Gulf after Washington lifted the U.S. ban on exports in 2015. U.S. crude exports rose to 3.8 million barrels per day for the March 18 week, highest since July 2021, U.S. Energy Department data showed. Cushing stockpiles are currently at 25.2 million barrels, just off a four-year low reached in early March. Usually when Cushing stockpiles fall that low, the price for crude oil delivered at Midland, Texas, trades at a discount to Cushing in order to attract barrels into the storage hub, said Ryan Saxton, head of oil data at research firm Wood Mackenzie. However, that hasn't happened. Midland crude is trading at a 70-cent premium to Cushing barrels. U.S. crude is attractive to world buyers because it is trading at a steep discount of nearly $7 under the global benchmark Brent. That spread hit $9.20 earlier this month, the steepest discount in nearly two years. Worldwide demand has risen to nearly pre-pandemic levels, but supply has been hindered, as the Organization of the Petroleum Exporting Countries (OPEC) has been slow to restore supply cuts enacted during the pandemic in 2020. Also, Russian supply could fall by 2 to 3 million barrels a day Low storage levels are also an issue in Canada, the world's fourth-largest producer of crude. Storage levels at monitored locations in Western Canada remained within 3 million barrels of record-low utilization set in 2017 at 30.3%, said Dylan White, senior research analyst for oil markets at Wood Mackenzie. That number is a marker for the operational floor for storage facilities, he said. Upcoming oil refinery maintenance, which typically occurs in the spring, could boost storage in both Canada and the United States, though balances should remain tight, Bank of America (NYSE:BAC) analysts said.

 

 
Intraday RESISTANCE LEVELS
28th March 2022 R1 R2 R3
GOLD-XAU 1,941-1,950 1,958 1,965-1,974
Silver-XAG 25.40-26.00 26.50 27.00-27.50
Crude Oil 109.40-110.10 112.00 112.90-113.50
EURO/USD 1.1025-1.1090 1.1105 1.1190-1.1260
GBP/USD 1.3240-1.3285 1.3320 1.3360-1.3400
USD/JPY 124.90-125.50

Intraday SUPPORTS LEVELS
28th March 2022 S1 S2 S3
GOLD-XAU 1,925-1,911 1,900 1,889-1,870
Silver-XAG 24.80 24.30 23.95-23.80
Crude Oil 108.60-107.50 106.20 104.60-104.00
EURO/USD 1.0900-1.0820 1.0880 1.0800-1.0720
GBP/USD 1.3110 1.3070 1.3035-1.2970
USD/JPY 124.00- 123.60 123.00 122.00-121.00

Intra-Day Strategy (28th March 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 Friday made its intraday high of US$1964.19/oz and low of US$1937.32/oz. Gold up 0.696% at US$1958.07/oz.

Technicals in Focus:

In daily charts, prices are above 200DMA (1809) and breakage below will call for 1790. MACD is above zero line and histograms are also increasing trend and it will bring upward stance in the upcoming sessions. RSI is in overbought region and more upside is expected before it gets stretched. Stochastic Oscillator is in neutral territory and giving negative crossover to bearish stance for intraday trade.

Trading Strategy: Sell on Strength

Sell below 1950-1974 keeping stop loss closing above 1973, targeting 1941-1925-1911 and 1900-1888-1877. Buy in between 1941-1877 with risk below 1877, targeting 1950 and 1958-1965-1973.

 
Intraday Support Levels
S1     1,925-1,911
S2     1,900
S3     1,889-1,870
Intraday Resistance Levels
R1     1,941-1,950
R2     1,958
R3     1,965-1,974

Technical Indicators

Name   Value Action
14DRSI  

48.973

Buy
20-DMA   1934.91 Buy
50-DMA  

1888.36

Buy
100-DMA   1853.64 Buy
200-DMA   1829.49 Buy
STOCH(5,3)   5.445 Buy
MACD(12,26,9)   26.943 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$25.71/oz and low of US$25.25/oz settled down by 0.047% at US$25.51/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (26.62), breakage above will lead to 27.60. MACD is below zero line and histograms are decreasing trend and it will bring bearish stance in the upcoming sessions. RSI is approaching neutral region, indicating buy signal for now. The Stochastic Oscillator is in oversold region and giving positive crossover to show upside move for the intraday trade.

Trading Strategy: Buy on Dips

Buy in between 25.00-22.90, targeting 25.10-25.70-26.50 and 26.75-27.50-27.80 with stop loss should be place on the breakage below 22.90. Sell in between 26.00-27.90 with stop loss above 27.90; targeting 25.40-24.80 and 24.40-23.90-23.40.

 
Intraday  Support Levels
S1     24.80
S2     24.30
S3     23.95-23.80

Intraday  Resistance Levels
R1     25.40-26.00
R2     26.50
R3     27.00-27.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   51.506 Buy
20-DMA   24.91 Sell
50-DMA   24.20 Buy
100-DMA   23.90 Buy
200-DMA   24.00 Buy
STOCH(5,3)   12.836 Sell
MACD(12,26,9)   0.455 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US113.20/bbl, intraday low of US$109.84/bbl and settled down by 2.87% to close at US$111.70/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 zero line and histograms are in increasing mode 0will bring bullish stance in the upcoming sessions. The Stochastic Oscillator is in neutral region and giving positive crossover for confirmation of bullish stance; while the RSI is in 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 109.40-114.00 with stop loss at 114.00; targeting 109.40-108.90-107.50 and 106.20-104.60. Buy above 108.20-114.00 with risk daily closing below 114.00 and targeting 110.10-112.00-112.90 and 113.50-114.00.

 
Intraday Support Levels
S1     108.60-107.50
S2     106.20
S3     104.60-104.00

Intraday Resistance Levels
R1     109.40-110.10
R2     112.00
R3     112.90-113.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.807 Sell
20-DMA   104.56 Sell
50-DMA   97.05 Buy
100-DMA   89.49 Buy
200-DMA   80.96 Buy
STOCH(5,3)   74.206 Buy
MACD(12,26,9)   3.580 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.0980/EUR, high of US$1.1037/EUR and settled the day down by 0.134% to close at US$1.0981/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.1191), which become immediate support, break below will target 1.1270. MACD is above zero line and histograms are increasing mode which will bring bullish view. Stochastic is in overbought territory and giving positive crossovers to signal for bullish outlook for intraday. 14D RSI is currently in neutral region and giving no directions to consider right now.

Trading Strategy: Neutral to Sell

Sell below 1.1090-1.1260, targeting 1.1010-1.0850-1.0720 and 1.0640- 1.0600-1.0520 with stop-loss at daily closing above 1.1200. Buy above 1.1010-1.0520 with risk below 1.0520, targeting 1.1050-1.1105-1.1100-1.1270.

 
Intraday Support Levels
S1     1.0900-1.0820
S2     1.0880
S3     1.0800-1.0720

Intraday  Resistance Levels
R1     1.1025-1.1090
R2     1.1105
R3     1.1190-1.1260

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.313 Buy
20-DMA   1.1079 Sell
50-DMA   1.1191 Sell
100-DMA   1.1307 Sell
200-DMA   1.1466 Sell
STOCH(5,3)   71.688 Buy
MACD(12,26,9)   0.001 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.3158/GBP, high of US$1.3224/GBP and settled the day down by 0.0091% to close at US$1.3180/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 100DMA (1.3760) is become immediate support level. 14-D RSI is currently in neutral region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in overbought territory and giving positive crossover to confirm bullish stance. MACD is above zero line but histograms are increasing lead to upward movement.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; buy in between 1.3200-1.2850 with target 1.3250-1.3290-1.3320 and 1.3360-1.3400 with stop loss closing below 1.2850. Sell in between 1.3240-1.3400 with targets at 1.3200-1.3140-1.3035 and 1.2970-1.2925-1.2850 with stop loss should be 1.3300.

 
Intraday Support Levels
S1     1.3110
S2     1.3070
S3     1.3035-1.2970

Intraday Resistance Levels
R1     1.3240-1.3285
R2     1.3320
R3     1.3360-1.3400

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

46.813

Buy
20-DMA   1.3227 Buy
50-DMA   1.3340 Buy
100-DMA   1.3509 Buy
200-DMA   1.3509 Buy
STOCH(5,3)   78.970 Sell
MACD(12,26,9)   -0.002 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY121.17/USD and made an intraday high of JPY122.42/USD and settled the day down 0.229% at JPY122.07/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 overbought region and chances of downward are expected based on RSI. MACD is above 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 negative crossover to confirm bearish stance.

Trading Strategy: Neutral to Sell

Sell below 122.00-124.90 with risk above 124.90 targeting 121.00-120.50-120.10 and 119.00-118.00-117.50. Long positions above 121.00-118.50 with targets of 122.00-122.90 and 123.60-124.00-124.90 with stop below 115.50.

 
Intraday Support Levels
S1     124.00- 123.60
S2     123.00
S3     122.00-121.00

INTRADAY RESISTANCE LEVELS
R1     124.90-125.50
R2    
R3    

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.266 Buy
20-DMA   115.18 Sell
50-DMA   114.81 Buy
100-DMA   113.1 Buy
200-DMA   111.59 Buy
STOCH(9,6)   11.683 Sell
MACD(12,26,9)   0.0102 Sell

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