AAFX TRADING

Daily Market Lookup

  • The dollar slipped against a basket of currencies on Friday after two volatile days as investors focused on how aggressive the Federal Reserve might be in hiking rates as it tackles rising inflation. The dollar index hit a 20-year high overnight on safe-haven demand, following Thursday's sharp stock sell-off driven by concerns about the Fed's aggressive tightening and as European currencies weakened on worries about growth in the region. It retraced some of these gains, however, as investors evaluated how much of the Fed's hawkishness was already priced into the greenback, and as some analysts suggested that inflation may be nearing a peak. Data on Friday showed U.S. jobs increased more than expected in April. Average hourly earnings rose 0.3% after advancing 0.5% in March. That lowered the year-on-year increase in wages to 5.5% from 5.6% in March. The Fed will have to raise interest rates more aggressively and risk a recession if supply chain issues don't begin to ebb, Minneapolis Fed President Neel Kashkari said on Friday, as he reiterated that policymakers are keenly watching how far rates will have to rise above the neutral level. The next major U.S. economic focus will be consumer price inflation data on Wednesday. This is expected to show that price pressures rose at an annual pace of 8.1% in April, just below March's reading of 8.5%, according to the median estimate of economists polled by Reuters. The euro also got a boost on Friday by relatively hawkish comments from European Central Bank (ECB) officials. The ECB should raise its deposit rate back into positive territory this year, French central bank chief Francois Villeroy de Galhau said, comments that point to his support for at least three rate hikes in 2022. ECB policymaker Joachim Nagel also said that the central bank’s time window for raising interest rates in response to record-high inflation is slowly closing, in an indication he backed a move sooner rather than later. The single currency has weakened as the region struggles with weaker growth and energy disruptions due to sanctions imposed on Russia after its invasion of Ukraine. German industrial production fell more than expected in March as pandemic restrictions and war in Ukraine disrupted supply chains, making it difficult to fill orders, official data showed on Friday. Sterling fell to its lowest level since June 2020, a day after the Bank of England raised interest rates to their highest since 2009 but warned the economy was at risk of recession.
  • Bitcoin fell to its lowest level since January on Monday as slumping equity markets continued to hurt cryptocurrencies, which are currently trading in line with so-called riskier assets like tech stocks. The tech heavy Nasdaq fell 1.5% last week, and has lost 22% year to date, hurt by the prospect of persistent inflation forcing the U.S. Federal Reserve to hike rates despite slowing growth. Nasdaq futures were down a further 0.8% in Asia trade on Monday morning. Dibb said other factors in the decline over the weekend - bitcoin closed on Friday around $36,000 - were the crypto market's notoriously low liquidity over the weekends, and also short lived fears that algorithmic stablecoin called Terra USD (UST) could lose its peg to the dollar. Stablecoins are digital tokens pegged to other traditional assets, often the U.S. dollar. UST is closely watched by the crypto community both because of the novel way in which it maintains its 1:1 dollar peg, and because its founders have set out plans to build a reserve of $10 billion worth of bitcoin to back the stablecoin, meaning volatility in UST could potentially spill over into bitcoin markets.
  • Oil prices slipped on Monday, along with stock markets in Asia, sparked by weak China data and fears a global recession could dampen oil demand, with investors eying European Union talks on a Russian oil embargo that could tighten global supplies. Global financial markets have also been spooked by concerns over interest rate hikes and recession worries as tighter and wider COVID-19 lockdowns in China led to slower export growth in the world's No. 2 economy in April. Crude imports by China, the world's top oil importer, rose nearly 7% in April from a year earlier although imports for the first four months fell 4.8% on year. A price cut by Saudi Arabia also reflected worries over global oil demand, Teng said. Saudi Arabia, world's top oil exporter, lowered crude prices for Asia and Europe for June on Sunday. Last week, the European Commission proposed a phased embargo on Russian oil as part of its toughest-yet package of sanctions over the conflict in Ukraine, boosting Brent and WTI prices for the second straight week. However, the proposal requires a unanimous vote among EU members this week. The EU proposal was followed by a pledge by G7 nations on Sunday to ban or phase out Russian oil imports. Washington also imposed new sanctions against Gazprombank executives and other businesses. Japan, part of G7 and one of the world's top five crude importers, will ban Russian crude imports "in principle", Prime Minister Fumio Kishida said on Sunday. Bulgaria's Deputy Prime Minister, however, said on Sunday that his country would veto EU oil sanctions on Russia if it does not get a derogation from the proposed ban. Bulgaria had earlier said it would seek an exemption from the proposed Russian oil ban if such opt-outs were allowed, but it was not clear if it was seeking a full exemption or a delay similar to the one proposed on Friday for Hungary, Slovakia and the Czech Republic.

 

 
Intraday RESISTANCE LEVELS
9th May 2022 R1 R2 R3
GOLD-XAU 1,874-1,890 1,900-1,914 1,923-1,938
Silver-XAG 22.50-23.05 23.20 23.60-23.95
Crude Oil 109.40-110.80 111.85 113.20-114.70
EURO/USD 1.0550-1.0610 1.0690 1.0765-1.0820
GBP/USD 1.2310-1.2420 1.2490-1.2545 1.2605-1.2690
USD/JPY 131.20-132.00 132.90 133.50-133.90

Intraday SUPPORTS LEVELS
9th May 2022 S1 S2 S3
GOLD-XAU 1,868-1,858 1,848 1,840-1,831
Silver-XAG 22.05-21.70 21.40 21.05-20.60
Crude Oil 107.20-106.40 104.50-103.90 102.95-102.10
EURO/USD 1.0490-1.0450 1.0390 1.0305-1.0250
GBP/USD 1.2240 1.2200 1.2150-1.2070
USD/JPY 130.60-129.60 129.00 127.50-127.00

Intra-Day Strategy (9th May 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$1892.41/oz and low of US$1865.99/oz. Gold up 0.340% at US$1883.27/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 1890-1970 keeping stop loss closing above 1970, targeting 1868 and 1858-1849-1831. Buy in between 1868-1834 with risk below 1834, targeting 1890-1911-1923 and 1938-1958-1970.

 
Intraday Support Levels
S1     1,868-1,858
S2     1,848
S3     1,840-1,831
Intraday Resistance Levels
R1     1,874-1,890
R2     1,900-1,914
R3     1,923-1,938

Technical Indicators

Name   Value Action
14DRSI  

42.603

Buy
20-DMA   1944.89 Buy
50-DMA  

1925.10

Buy
100-DMA   1890.99 Buy
200-DMA   1856.28 Buy
STOCH(5,3)   10.014 Sell
MACD(12,26,9)   3.180 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$22.63/oz and low of US$22.09/oz settled down by 0.640% at US$22.35/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 22.05-21.00, targeting 23.20--23.95 and 24.55-25.10-25.70 with stop loss should be place on the breakage below 21.00. Sell in between 22.50-24.90 with stop loss above 24.90; targeting 22.05-21.70 and 21.40-21.05-20.60.

 
Intraday  Support Levels
S1     22.05-21.70
S2     21.40
S3     21.05-20.60

Intraday  Resistance Levels
R1     22.50-23.05
R2     23.20
R3     23.60-23.95

TECHNICAL INDICATORS
Name   Value Action
14DRSI   27.633 Buy
20-DMA   23.80 Sell
50-DMA   24.20 Sell
100-DMA   24.13 Sell
200-DMA   24.13 Sell
STOCH(5,3)   50.135 Buy
MACD(12,26,9)   0.108 0.108

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US110.00/bbl, intraday low of US$106.18/bbl and settled up by 1.832% to close at US$109.44/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 109.40-113.20 with stop loss at 113.20; targeting 107.20-106.40-104.50 and 103.90-102.95-102.10. Buy above 107.20-101.00 with risk daily closing below 101.00 and targeting 109.40-110.80 and 111.85-113.20.

 
Intraday Support Levels
S1     107.20-106.40
S2     104.50-103.90
S3     102.95-102.10

Intraday Resistance Levels
R1     109.40-110.80
R2     111.85
R3     113.20-114.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   58.276 Sell
20-DMA   103.67 Buy
50-DMA   100.98 Buy
100-DMA   95.22 Buy
200-DMA   86.36 Buy
STOCH(5,3)   79.206 Buy
MACD(12,26,9)   1.220 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.0482/EUR, high of US$1.0598/EUR and settled the day up by 0.156% to close at US$1.0554/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 1.0550-1.1145, targeting 1.0490-1.0450-1.0390 and 1.3050-1.0305-1.0250 with stop-loss at daily closing above 1.1150. Buy above 1.0490-1.0250 with risk below 1.0250, targeting 1.0550-1.10610-1.0690 and 1.0765-1.0820-1.0870.

 
Intraday Support Levels
S1     1.0490-1.0450
S2     1.0390
S3     1.0305-1.0250

Intraday  Resistance Levels
R1     1.0550-1.0610
R2     1.0690
R3     1.0765-1.0820

TECHNICAL INDICATORS
Name   Value Action
14DRSI   33.857 Buy
20-DMA   1.0662 Sell
50-DMA   1.0846 Sell
100-DMA   1.1034 Sell
200-DMA   1.1263 Sell
STOCH(5,3)   31.688 Sell
MACD(12,26,9)   -0.011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.2275/GBP, high of US$1.2379/GBP and settled the day down by 0.058% to close at US$1.2348/GBP.

Technicals in Focus:

On daily charts, prices are sustaining below 20DMA (1.2834) is become immediate resistance level. 14-D RSI is currently in oversold 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 1.2240-1.2070 with target 1.2290-1.2360-1.2420 and 1.2490-1.2605-1.2690 with stop loss closing below 1.2050. Sell in between 1.2310-1.2690 with targets at 1.2240-1.2200 and 1.2150-1.2070 with stop loss should be 1.2690.

 
Intraday Support Levels
S1     1.2240
S2     1.2200
S3     1.2150-1.2070

Intraday Resistance Levels
R1     1.2310-1.2420
R2     1.2490-1.2545
R3     1.2605-1.2690

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

33.674

Buy
20-DMA   1.2755 Sell
50-DMA   1.2985 Sell
100-DMA   1.3174 Sell
200-DMA   1.3347 Sell
STOCH(5,3)   62.970 Buy
MACD(12,26,9)   -0.002 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY130.07/USD and made an intraday high of JPY130.80/USD and settled the day up 0.378% at JPY130.56/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 130.60-132.50 with risk above 132.50 targeting 130.00-129.60-129.00 and 128.10-127.00-126.40. Long positions above 130.00-126.40 with targets of 130.60-131.20-132.00 and 132.90-133.50 with stop below 126.40.

 
Intraday Support Levels
S1     130.60-129.60
S2     129.00
S3     127.50-127.00

INTRADAY RESISTANCE LEVELS
R1     131.20-132.00
R2     132.90
R3     133.50-133.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   65.875 Buy
20-DMA   127.65 Buy
50-DMA   123.87 Buy
100-DMA   120.34 Buy
200-DMA   116.74 Buy
STOCH(9,6)   52.683 Buy
MACD(12,26,9)   0.0102 Sell

AAFX TRADING
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