AAFX TRADING

Daily Market Lookup

  • The U.S. dollar edged lower in early European trade Friday, but remained near a 20-year high with Federal Reserve Chair Jerome Powell largely cementing the likelihood of further hefty interest rate rises to combat stubbornly high U.S. inflation. The dollar has been in demand for much of the year, with the Federal Reserve seen as one of the most aggressive of the world’s central banks in combating soaring inflation. The U.S. central bank raised its benchmark overnight interest rate by 50 basis points last week, the largest hike in 22 years, and is expected to continue to aggressively tighten monetary policy in the months ahead. However, he added that the Fed wasn’t “actively considering” a larger 75 basis-point increase, comments that have prompted some traders to dial back their long dollar positions. This weakness occurs despite ECB President Christine Lagarde on Thursday joining the chorus of policymakers calling for the central bank to start lifting interest rates, amid expectations that it will take action in July. “The EUR has blatantly struggled to draw any tangible benefits from the increasingly hawkish tone among ECB policymakers,” said analysts at ING, in a note, “which in our view boils down to the already quite aggressive tightening expectations (80-85 bp fully priced in by year-end) and lingering uncertainty around whether the ECB will be able to deliver many more hikes afterwards given the deteriorating economic outlook in the euro area.”
  • The dollar was down on Friday morning in Asia but remains near a 20-year high. Persistent global economic worries gave the dollar support. The U.S. Federal Reserve raised interest rates to 1% last week to tame inflation, the biggest hike in 22 years. Investors are concerned about more aggressive monetary policies that might hurt the economy. However, Fed Chair Jerome Powell said on Thursday that the central bank’s battle to cool inflation would “include some pain” as the impact of higher interest rates is felt, calling stable prices the “bedrock” of the economy. He added that the worse outcome would be speeding up prices. On the data front, the U.S. Producer Price Index increased 0.5% month-on-month in April, moderating from March when the growth of 1.6% was recorded. In cryptocurrencies, bitcoin gained 7.49% and retook $30,000 after plunging below that level on Wednesday for the first time since July.
  • Gold was down on Friday morning in Asia, holding near a three-month low as the dollar continued to strengthen over the U.S. Federal Reserve's tightening policies. The dollar, which normally moves inversely to gold, edged down on Friday morning. The dollar climbed to a 20-year high. Investors are concerned about the recession caused by the tightening policies, giving the currency a boost. Fed Chair Jerome Powell called stable prices the “bedrock” of the economy, saying on Thursday that the central bank’s battle to cool inflation would “include some pain” as the impact of higher interest rates is felt. But he said the worse outcome would be the prices to continue speeding ahead. On the data front, the U.S. Producer Price Index (PPI) released on Thursday showed a growth of 0.5% month-on-month in April, slower than the 1.6% increase in March, due to the easing pressure of rising costs for energy products. Data released on Thursday also showed that the U.S. Initial Jobless Claims increased to 203,000 last week. The figure was above 195,000 forecasted by investing.com and 202,000 the previous week.
  • Oil prices rose on Friday but were headed for their first weekly loss in three weeks as worries about inflation and China's COVID lockdowns slowing global growth offset concerns about dwindling supplies from Russia. The market is continuing to be pushed and pulled by the prospect of a European Union ban on Russian oil tightening supply and concerns about faltering global demand. SPI Asset Management managing partner Stephen Innes said in a note that oil traders were looking "for a glimmer of light at the end of China's gloomy lockdown tunnel". Inflation and rate rises have driven the U.S. dollar to 20-year highs, capping oil price gains as a stronger dollar makes oil more expensive when purchased in other currencies. Analysts, however, continue to focus on the prospect of a European Union ban on Russian oil, after Moscow imposed sanctions this week on European units of state-owned Gazprom (MCX:GAZP) and after Ukraine halted a key gas transit route. An International Energy Agency report on Thursday said rising oil production in the Middle East and the United States and a slowdown in demand growth are "expected to fend off an acute supply deficit amid a worsening Russian supply disruption".

 

 
Intraday RESISTANCE LEVELS
13th May 2022 R1 R2 R3
GOLD-XAU 1,831-1,840 1,851 1,858-1,868
Silver-XAG 20.90-21.50 22.05-22.50 22.90-23.20
Crude Oil 105.90-106.40 106.90 109.00-110.40
EURO/USD 1.0450-1.0490 1.0550 1.0610-1.0690
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
13th May 2022 S1 S2 S3
GOLD-XAU 1,820-1,805 1,789 1,780-1,769
Silver-XAG 20.60-20.00 19.60 19.05-18.50
Crude Oil 104.50-103.90 102.95-101.00 99.00-98.30
EURO/USD 1.0390-1.0305 1.0250 1.0210-1.0190
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 (13th 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 Thursday made its intraday high of US$1858.63/oz and low of US$1821.17/oz. Gold up 1.653% at US$1821.64/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 1831-1890 keeping stop loss closing above 1890, targeting 1831-1820-1801 and 1789-1780. Buy in between 1820-1780 with risk below 1780, targeting 1831-1840-1848-1858 and 1868-1874-1890.

 
Intraday Support Levels
S1     1,820-1,805
S2     1,789
S3     1,780-1,769
Intraday Resistance Levels
R1     1,831-1,840
R2     1,851
R3     1,858-1,868

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 Thursday made its intraday high of US$21.65/oz and low of US$20.61/oz settled down by 4.10% at US$20.68/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 20.60-19.60, 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     20.60-20.00
S2     19.60
S3     19.05-18.50

Intraday  Resistance Levels
R1     20.90-21.50
R2     22.05-22.50
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 Thursday made an intra‐day high of US105.77/bbl, intraday low of US$101.29/bbl and settled up by 3.432% to close at US$105.05/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 105.90-110.40 with stop loss at 110.40; targeting 104.50-103.90-101.00 and 99.00-98.30-96.60. Buy above 104.50-94.90 with risk daily closing below 94.90 and targeting 105.90-106.40-106.90 and 109.00-110.40.

 
Intraday Support Levels
S1     104.50-103.90
S2     102.95-101.00
S3     99.00-98.30

Intraday Resistance Levels
R1     105.90-106.40
R2     106.90
R3     109.00-110.40

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$1.0353/EUR, high of US$1.0528/EUR and settled the day down by 1.262% to close at US$1.0379/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 1.0450-1.1145, 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 1.0390-1.0210 with risk below 1.0210, targeting 1.0450-1.0490-1.0550 and 1.0610-1.0690-1.0765.

 
Intraday Support Levels
S1     1.0390-1.0305
S2     1.0250
S3     1.0210-1.0190

Intraday  Resistance Levels
R1     1.0450-1.0490
R2     1.0550
R3     1.0610-1.0690

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 Thursday made an intra‐day low of US$1.2164/GBP, high of US$1.2250/GBP and settled the day down by 0.395% to close at US$1.2198/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 Thursday made intra‐day low of JPY127.51/USD and made an intraday high of JPY130.04/USD and settled the day down 1.30% at JPY128.21/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

AAFX TRADING
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