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  • The U.S. dollar strengthened in early European trade Thursday to a new two-decade high after U.S. inflation remained stubbornly high, while sterling weakened on disappointing U.K. growth data. The U.S. consumer price index climbed 8.3% on an annual basis in April, data released on Wednesday showed, easing from 8.5% in March but still higher than the 8.1% generally expected. While this number suggested inflation may have peaked in the U.S., it remained persistently high meaning the Federal Reserve's current monetary policy plans to aggressively raise interest rates in the months ahead will remain intact. The market is fully priced for at least a half percentage point increase to the policy rate at each of the next two Fed decisions, on June 15 and July 27. European Central Bank will lift interest rates this summer, for the first time in more than a decade. ECB Executive Board member Isabel Schnabel was the latest policymaker to voice her concerns about the high inflation level in the Eurozone, saying the central bank must respond even if the inflation drivers that have pushed it to record levels are global by nature. in the first quarter, hurt by an intensifying cost-of-living crisis. Gross domestic product grew by only 0.8% in seasonally-adjusted terms from the fourth quarter, with preliminary data suggesting that it actually declined in March by 0.1%. Analysts had expected growth of 1.0% for the quarter, and stagnation in March.
  • The dollar hit a two-decade high on Thursday after U.S. inflation moderated less than markets had expected, keeping the Federal Reserve on course to tighten policy aggressively. The safe-haven greenback also got support amid a slide in global equities amid investor worries that central banks are behind the curve in trying to rein in consumer prices, with growth already facing risks from China's prolonged COVID-19 lockdowns. The data suggested inflation may have peaked, but was unlikely to cool quickly and derail the Fed's current monetary policy plans. The market is fully priced for at least a half percentage point increase to the policy rate at each of the next two Fed decisions, on June 15 and July 27, according to the CME FedWatch Tool. The May CPI data comes five days before the June Fed meeting, and another "shocker" would make a 75 basis-point hike then a "strong possibility," he said. The euro was about flat at $1.05095 after receiving a lift overnight as the European Central Bank overnight firmed up expectations that it will raise its policy interest rate in July for the first time in more than a decade. The British pound languished as Brexit headlines returned, with the attorney-general for England and Wales advising the government that it would be within its legal rights to scrap large parts of the Northern Ireland protocol, according to the Times newspaper. Sterling, which also tends to move with risk assets, dipped to $1.2211 on Thursday for the first time in almost two years.
  • Gold saw choppy price action on Thursday, as the dollar hit a 20-year high, balancing support from a slide in Treasury yields, after the U.S. inflation data signalled the Federal Reserve would likely stick to its current, aggressive rate-hike roadmap. The U.S. dollar reached its highest level in nearly two decades, a milestone it has set multiple times and hovered around recently, keeping up pressure on demand for greenback-priced bullion. U.S. consumer price growth slowed sharply in April as gasoline eased off record highs, suggesting inflation has probably peaked, although it is likely to stay hot for a while and keep the Fed's foot on the brakes. The inflation reading comes on the heels of the Fed raising its benchmark overnight interest rate by an aggressive half-a-percentage point last week — the biggest hike in 22 years — as it pushes to unwind ultra-easy pandemic-era monetary policy. Although seen as an inflation hedge, bullion yields no interest, and is sensitive to rising U.S. short-term interest rates and bond yields. There could be some support in the near term as investors know that once lockdowns in China are lifted, there may be more support for precious metals' demand, said Brian Lan, managing director at dealer GoldSilver Central.
  • Oil prices dropped more than 1% on Thursday in a volatile week as economic concerns and recession fears dogged global financial markets, outweighing supply concerns and geopolitical tensions in Europe. Oil prices are under pressure this week, along with global financial markets, on jitters over rising interest rates, the strongest U.S. dollar in two decades, concerns over inflation and possible recession. Prolonged COVID-19 lockdowns in world's top crude importer China have also impacted the market. U.S. headline CPI for the 12 months to April jumped 8.3%, reaffirming concerns that interest rates will need to rise quickly to tame it. However, supply concerns stemming from Russia's invasion of Ukraine have bolstered the market, with prices rising over 35% so far this year. A pending European Union ban on oil from Russia, a key EU supplier of crude and fuels that could further tighten global supplies is underpinning prices. The EU is still haggling over the details of the Russian embargo. The vote needs unanimous support, but it has been delayed as Hungary opposes the ban because it would be too disruptive to its economy. On Wednesday, oil prices jumped 5% after Russia sanctioned 31 companies based in countries that imposed sanctions on Moscow after the Ukraine invasion. That created unease in the market at the same time that Russian natural gas flows to Europe via Ukraine fell by a quarter. It was the first time exports via Ukraine have been disrupted since the invasion. Price gains have been limited by worries about demand destruction in China, as it attempts to curb the spread of the coronavirus. In the United States, commercial crude inventories rose last week because of a record release of oil from the U.S. strategic reserves, but gasoline stockpiles declined ahead of the peak summer driving demand season, the Energy Information Administration said on Wednesday.

 

 
Intraday RESISTANCE LEVELS
12th May 2022 R1 R2 R3
GOLD-XAU 1,851-1,858 1,868 1,874-1,890
Silver-XAG 21.50-22.05 22.50 22.90-23.20
Crude Oil 102.95 103.90 104.50-106.40
EURO/USD 1.0550-1.0610 1.0690 1.0765-1.0820
GBP/USD 1.2240-1.2310 1.2420 1.2490-1.2545
USD/JPY 129.60-130.60 131.20 132.00-132.90

Intraday SUPPORTS LEVELS
12th May 2022 S1 S2 S3
GOLD-XAU 1,840-1,831 1,820 1,805-1,789
Silver-XAG 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 1.2200-1.2150 1.2070 1.2010-1.1945
USD/JPY 129.00-127.50 126.90 126.10-125.00

Intra-Day Strategy (12th 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 Wednesday made its intraday high of US$1865.26/oz and low of US$1835.31/oz. Gold up 0.759% 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     1,840-1,831
S2     1,820
S3     1,805-1,789
Intraday Resistance Levels
R1     1,851-1,858
R2     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 Wednesday made its intraday high of US$21.95/oz and low of US$21.23/oz settled up by 1.54% at US$21.56/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 21.05-19.60, targeting 21.50-22.05-22.50 and 23.05--23.95-24.55-25.10 with stop loss should be place on the breakage below 19.50. Sell in between 21.50-23.20 with stop loss above 23.20; targeting 21.05-20.60 and 20.00-19.60.

 
Intraday  Support Levels
S1     21.05
S2     20.60
S3     20.00-19.60

Intraday  Resistance Levels
R1     21.50-22.05
R2     22.50
R3     22.90-23.20

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 Wednesday made an intra‐day high of US104.99/bbl, intraday low of US$97.127/bbl and settled up by 6.30% to close at US$104.18/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 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 102.90-106.40 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     102.95
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 Wednesday made an intraday low of US$1.0501/EUR, high of US$1.0576/EUR and settled the day down by 0.120% to close at US$1.0511/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 Wednesday made an intra‐day low of US$1.2236/GBP, high of US$1.2399/GBP and settled the day down by 0.506% to close at US$1.2247/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 1.2200-1.2070 with target 1.2240-1.2310-1.2420 and 1.2490-1.2545-1.2605 with stop loss closing below 1.2050. Sell in between 1.2240-1.2690 with targets at 1.2200-1.2150-1.2070 and 1.2010-1.1945 with stop loss should be 1.2690.

 
Intraday Support Levels
S1     1.2200-1.2150
S2     1.2070
S3     1.2010-1.1945

Intraday Resistance Levels
R1     1.2240-1.2310
R2     1.2420
R3     1.2490-1.2545

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 Wednesday made intra‐day low of JPY129.43/USD and made an intraday high of JPY130.81/USD and settled the day down 0.384% at JPY129.92/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 129.60-132.50 with risk above 132.50 targeting 129.00-128.10 and 126.90-126.10-125.00. Long positions above 129.00-126.40 with targets of 129.60-130.60-131.20 and 132.00-132.90-133.50 with stop below 126.40.

 
Intraday Support Levels
S1     129.00-127.50
S2     126.90
S3     126.10-125.00

INTRADAY RESISTANCE LEVELS
R1     129.60-130.60
R2     131.20
R3     132.00-132.90

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

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