AAFX TRADING

Daily Market Lookup

  • The dollar hovered near a two-decade high against major peers on Wednesday, ahead of a key reading on inflation that should provide clues on how aggressive the Federal Reserve will be in tightening monetary policy. Investors will be closely watching the April U.S. consumer price index reading later on Wednesday for any signs inflation may be starting to cool, with expectations calling for a 8.1% annual increase compared with an 8.5% rise recorded in March. After the Fed raised its benchmark overnight interest rate by 50 basis points last week, the largest hike in 22 years, investors have been attempting to assess how aggressive the central bank will be. Markets are priced for another hike of at least 50 basis points at the central bank's June meeting, according to CME's FedWatch Tool. CBA sees the potential for a further 5 U.S. cent drop in both Antipodean currencies if strict COVID-19 lockdowns continue for several more months in key trade partner China, although fundamentals point to "large gains by year-end" for Aussie and kiwi after the lockdowns end.
  • The dollar was down on Wednesday morning in Asia, but remained near a two-decade high, ahead of U.S. inflation that could indicate how aggressively the Federal Reserve will tighten monetary policy. The USD/CNY pair edged down 0.12% to 6.7266. Chinese data released earlier in the day showed that the consumer price index (CPI) for April 2022 grew 0.4% month-on-month and 2.1% year-on-year, while the producer price index also rose 8% year-on-year. The yen continued to get some respite as benchmark U.S. Treasury yields pressed pause on their recent rally. The Japanese currency was little changed after dropping to a more than two-decade low of 131.35 on Monday. Investors now await the April U.S. CPI figure later in the day for any signs that inflation is beginning to cool, with forecasts prepared by Investing.com predicting an 8.1% annual increase. The PPI will follow a day later. After the Fed raised its benchmark overnight interest rate by 50 basis points during the previous week, the largest hike in 22 years, investors have been attempting to predict how aggressive the central bank will be. Markets are priced for another hike of at least 50 basis points at the Fed's June 2022 meeting, according to CME's FedWatch Tool. The greenback has climbed nearly 9% in 2022 amid an increasingly hawkish Fed trying to combat ever-rising inflation. The yen continued to get some respite as benchmark U.S. Treasury yields pressed pause on their recent rally. The Japanese currency was little changed after dropping to a more than two-decade low of 131.35 on Monday. Investors now await the April U.S. CPI figure later in the day for any signs that inflation is beginning to cool, with forecasts prepared by Investing.com predicting an 8.1% annual increase. The PPI will follow a day later. After the Fed raised its benchmark overnight interest rate by 50 basis points during the previous week, the largest hike in 22 years, investors have been attempting to predict how aggressive the central bank will be. Markets are priced for another hike of at least 50 basis points at the Fed's June 2022 meeting, according to CME's FedWatch Tool.
  • Gold was down on Wednesday morning in Asia, hitting its lowest level since February 11, as investors eyed the rising dollar and inflation data. The Dollar, which normally moves inversely to the gold, inched down on Wednesday morning, but the moves were small. The tightened policy to fight inflation from the U.S. Federal Reserve has fueled five weeks of gains for the dollar. The Fed raised its interest rates to 1% last week. Fed officials on Tuesday reiterated their stance on the aggressive efforts to slow the fastest inflation in 40 years. As investors expect additional increases of the same magnitude from the Fed, they await the U.S. Core CPI, due later in the day, for more clues on the Fed’s monetary policies. The forecasts prepared by Investing.com expected the figure to moderate but stay above 8%. In Asia Pacific, Australia’s consumer sentiment released on Wednesday fell 5.6% in May from April, according to the Westpac-Melbourne Institute index. Surging inflation and rising interest rates are weighing on household spending. In other precious metals, silver dipped 0.1%. Platinum edged up 0.1%, while palladium fell 1.2%.
  • Oil was up on Wednesday morning in Asia, as investors await US and China economic data. Investors will be keeping an eye on China’s April factory gate prices and the US consumer-price index. A stronger dollar in particular, affects commodities like oil that are priced in the currency. In addition, the oil market has been shaken in recent times by Russia’s invasion of Ukraine and COVID-19 lockdowns across China. The war has fanned inflation, driving up the cost of everything from food to fuel. Retail gasoline in the US hit a record ahead of the summer driving season. After a robust start, oil is still up more than 30% for the year underpinned by economies rebounding from the pandemic. Officials in Saudi Arabia and the United Arab Emirates cautioned that spare capacity is decreasing in all energy sectors as producers slash investment, driving up prices. The American Petroleum Institute reported US crude stockpiles rose by 1.62 million barrels last week, according to sources familiar with the data. Fuel inventories have also expanded.

 

 
Intraday RESISTANCE LEVELS
11th May 2022 R1 R2 R3
GOLD-XAU 1,840-1,848 1,858-1,868 1,874-1,890
Silver-XAG 21.70-22.05 22.50-23.05 23.20
Crude Oil 102.10-102.95 103.90 104.50-106.40
EURO/USD 1.0550-1.0610 1.0690 1.0765-1.0820
GBP/USD 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
11th May 2022 S1 S2 S3
GOLD-XAU 1,831-1,820 1,805 1,789-1,780
Silver-XAG 21.50-21.05 20.60 20.00-19.60
Crude Oil 101.00-99.00 98.30-96.60 95.55-94.90
EURO/USD 1.0490-1.0450 1.0390 1.0305-1.0250
GBP/USD 1.2310-1.2240 1.2200 1.2150-1.2070
USD/JPY 130.60-129.60 129.00 127.50-127.00

Intra-Day Strategy (11th 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 Tuesday made its intraday high of US$1865.26/oz and low of US$1835.31/oz. Gold up 0.825% at US$1838.31/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 1840-1890 keeping stop loss closing above 1890, targeting 1831-1820-1801 and 1789-1780. Buy in between 1831-1780 with risk below 1780, targeting 1840-1848-1858 and 1868-1874-1890.

 
Intraday Support Levels
S1     1,831-1,820
S2     1,805
S3     1,789-1,780
Intraday Resistance Levels
R1     1,840-1,848
R2     1,858-1,868
R3     1,874-1,890

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 Tuesday made its intraday high of US$22.09/oz and low of US$22.30/oz settled down by 2.39% at US$21.26/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 21.40-19.60, targeting 21.70-22.05-22.50 and 23.05--23.95-24.55-25.10 with stop loss should be place on the breakage below 19.50. Sell in between 21.70-23.20 with stop loss above 23.20; targeting 21.40-21.05-20.60 and 20.00-19.60.

 
Intraday  Support Levels
S1     21.50-21.05
S2     20.60
S3     20.00-19.60

Intraday  Resistance Levels
R1     21.70-22.05
R2     22.50-23.05
R3     23.20

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 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US103.05/bbl, intraday low of US$97.87/bbl and settled down by 3.71% to close at US$98.31/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 102.10-106.40 with stop loss at 106.40; targeting 101.00-99.00-98.30 and 96.60-95.55-94.90. Buy above 101.00-94.90 with risk daily closing below 94.90 and targeting 101.00-99.00-98.30 and 96.60-95.55-94.90.

 
Intraday Support Levels
S1     101.00-99.00
S2     98.30-96.60
S3     95.55-94.90

Intraday Resistance Levels
R1     102.10-102.95
R2     103.90
R3     104.50-106.40

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 Tuesday made an intraday low of US$1.0524/EUR, high of US$1.0584/EUR and settled the day down by 0.291% to close at US$1.0526/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 Tuesday made an intra‐day low of US$1.2291/GBP, high of US$1.2375/GBP and settled the day down by 0.150% to close at US$1.2309/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 1.2310-1.2070 with target 1.2420-1.2490-1.2545 and 1.2605-1.2690 with stop loss closing below 1.2050. Sell in between 1.2410-1.2690 with targets at 1.2310-1.2240-1.2200 and 1.2150-1.2070 with stop loss should be 1.2690.

 
Intraday Support Levels
S1     1.2310-1.2240
S2     1.2200
S3     1.2150-1.2070

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

29.549

Buy
20-DMA   1.2604 Sell
50-DMA   1.2882 Sell
100-DMA   1.3106 Sell
200-DMA   1.3305 Sell
STOCH(5,3)   17.970 Buy
MACD(12,26,9)   -0.019 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY129.78/USD and made an intraday high of JPY130.56/USD and settled the day up 0.378% at JPY130.42/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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