AAFX TRADING

Daily Market Lookup

  • The U.S. dollar edged lower in early European trade Tuesday, slipping back from a 20-year high as gains in global equity markets helped risk appetite rebound to the detriment of this safe haven. The dollar has edged lower from a two-decade high as U.S. bond yields have pulled back slightly as traders calculate aggressive near-term interest rate hikes from the U.S. Federal Reserve will drag on long-term U.S. growth. Some evidence pointing to a U.S. economic slowdown emerged Monday with the New York Fed's Empire State manufacturing index showing an abrupt fall during May. While the US dollar typically strengthens when a recession is looming, its performance is more mixed when it hits, according to research from Goldman Sachs. There are two possible outcomes for the currency in coming weeks, according to the influential investment bank. If the global growth outlook improves, it will weaken as investors veer to riskier assets, but if the world economy does enter a recession, the dollar’s path is murky, with the Japanese yen likely to outperform the dollar as it usually does well during recessions. Investors now await speeches from Fed Chairman Jerome Powell and other Fed policymakers later in the day.
  • The dollar slipped against other major currencies for a third straight day on Tuesday, tempering a long rally as investors cashed out and trimmed bets on U.S. interest rate rises driving further gains. He still thinks the dollar will continue to find support as the driver of gains shifts. But it has been becalmed lately in the absence of new reasons to expect sharp rate hikes and longer-end U.S. yields have fallen on fears of a recession. The dollar remains above parity versus the Swiss franc and on the front foot in Asia's emerging markets, where rising food prices are seen putting pressure on regional economies. The greenback made a fresh record high on the Indian rupee on Tuesday and hit its highest since 2020 on Indonesia's rupiah. China's yuan, however, has finally caught a footing as Shanghai edges closer to emerging from lockdown Shanghai logged three consecutive days with no new COVID-19 cases outside quarantine zones on Tuesday, a milestone that in other cities has signalled the beginning of lifting restrictions. He added that a pause in its slide as well as a calming of markets' volatility generally has paused dollar gains, for now. Appearances from a handful of Federal Reserve speakers on Tuesday, including Chairman Jerome Powell at 1800 GMT, will be closely watched for any clues about whether near-term rate expectations could become even more aggressive. Futures markets are priced for consecutive 50 basis point hikes in June and July and for the benchmark U.S. interest rate to reach 2.75% by year's end. However there are growing expectations that other central banks will catch up. The gap between 10-year German and U.S. real yields has narrowed by more than 30 basis points this month and central banks in Britain and Australia have raised rates.
  • Gold was up on Tuesday morning in Asia, even as the dollar slowly resumed an upward trend and U.S. Treasury yields resumed their climb. The Chinese yuan, which had been on a downward trend lately, found a floor as investors reduced bets on whether U.S. interest rate hikes will drive further gains for the greenback. Benchmark U.S. 10-year Treasury yields also climbed. Asian shares were mostly up on Tuesday, and the Reserve Bank of Australia released the minutes from its latest policy meeting earlier in the day. G-7 finance ministers and central bankers are due to meet a day later. Investors also await speeches from Fed Chairman Jerome Powell and other Fed policymakers later in the day, with Philadelphia Fed President Patrick Harker speaking a day later. Improving demand and lower supply will also help palladium and rhodium swing back into deficit in 2022 and reduce platinum's surplus, consultants Metals Focus said on Monday.
  • Oil prices inched lower on Tuesday as Hungary resisted a European Union push for a ban on Russian oil imports, a move that would tighten global supply, with investors taking profits on a recent rally. EU foreign ministers failed on Monday in their effort to pressure Budapest to lift its veto of a proposed oil embargo on Russia following the country's invasion of Ukraine. An embargo would require approval from all EU nations On the supply side, U.S. producers are ramping up in order to replenish inventories that have dwindled in the wake of Russia's war on Ukraine - which Moscow calls "a special military operation" - and recovery from the COVID-19 pandemic. Oil output in the Permian Basin in Texas and New Mexico, the biggest U.S. shale oil producer, is due to rise 88,000 barrels per day (bpd) to a record 5.219 million bpd in June, the U.S. Energy Information Administration (EIA) said on Monday. Still, overall sentiment on prices remained bullish amid optimism about demand recovery in China as it looks to ease COVID restrictions that have hurt its economy, analysts said. Shanghai on Tuesday achieved the long-awaited milestone of three consecutive days with no new COVID-19 cases outside quarantine zones and set out on Monday its clearest timetable yet for exiting a lockdown now in its seventh week. Stockpiles in the Strategic Petroleum Reserve (SPR) fell to 538 million barrels, the lowest since 1987, data from the U.S. Department of Energy showed on Monday, underlining tight supply.

 

 
Intraday RESISTANCE LEVELS
17th May 2022 R1 R2 R3
GOLD-XAU 1,831-1,840 1,851 1,858-1,869
Silver-XAG 22.05-22.50 22.90 23.20-23.75
Crude Oil 112.50-113.25 114.00 115.80-116.50
EURO/USD 1.0490-1.0550 1.0610 1.0690-1.0755
GBP/USD 1.2420-1.2490 1.2545 1.2620-1.2730
USD/JPY 129.60-130.60 131.20 132.00-132.90

Intraday SUPPORTS LEVELS
17th May 2022 S1 S2 S3
GOLD-XAU 1,820-1,805 1,789 1,780-1,769
Silver-XAG 21.50-20.90 20.60 20.00-19.60
Crude Oil 111.60-110.30 108.90-108.00 106.90-105.90
EURO/USD 1.0450-1.0390 1.0305 1.0250-1.0210
GBP/USD 1.2310-1.2200 1.2150 1.2070-1.2010
USD/JPY 128.90-127.50 126.90 126.10-125.00

Intra-Day Strategy (17th 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 Monday made its intraday high of US$1826.87/oz and low of US$1786.69/oz. Gold up 0.760% at US$1823.74/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 1820-1801-1789 and 1780-1769. Buy in between 1820-1769 with risk below 1769, targeting 1831-1840 and 1848-1858-1868.

 
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     1,858-1,869

Technical Indicators

Name   Value Action
14DRSI  

29.310

Buy
20-DMA   1871.19 Buy
50-DMA  

1894.31

Buy
100-DMA   1882.73 Buy
200-DMA   1856.83 Buy
STOCH(5,3)   9.204 Sell
MACD(12,26,9)   -29.760 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$21.67/oz and low of US$20.83/oz settled up by 2.5% at US$21.61/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 21.60-19.60, targeting 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 22.05-23.75 with stop loss above 23.75; targeting 21.50-21.05-20.60 and 20.00-19.60.

 
Intraday  Support Levels
S1     21.50-20.90
S2     20.60
S3     20.00-19.60

Intraday  Resistance Levels
R1     22.05-22.50
R2     22.90
R3     23.20-23.75

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 Monday made an intra‐day high of US112.53/bbl, intraday low of US$106.32/bbl and settled up by 2.32% to close at US$111.55/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 112.50-116.50 with stop loss at 116.50; targeting 111.60-110.30-108.90 and 108.00-106.90-105.90-104.50. Buy above 111.60-106.90 with risk daily closing below 106.90 and targeting 112.50-113.25-114.00 and 115.80-116.50.

 
Intraday Support Levels
S1     111.60-110.30
S2     108.90-108.00
S3     106.90-105.90

Intraday Resistance Levels
R1     112.50-113.25
R2     114.00
R3     115.80-116.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.360 Sell
20-DMA   105.25 Buy
50-DMA   102.29 Buy
100-DMA   96.65 Buy
200-DMA   87.69 Buy
STOCH(5,3)   93.206 Buy
MACD(12,26,9)   1.807 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.0388/EUR, high of US$1.0442/EUR and settled the day up by 0.309% to close at US$1.0427/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     1.0450-1.0390
S2     1.0305
S3     1.0250-1.0210

Intraday  Resistance Levels
R1     1.0490-1.0550
R2     1.0610
R3     1.0690-1.0755

TECHNICAL INDICATORS
Name   Value Action
14DRSI   37.267 Buy
20-DMA   1.0569 Sell
50-DMA   1.0764 Sell
100-DMA   1.0969 Sell
200-DMA   1.1216 Sell
STOCH(5,3)   37.688 Sell
MACD(12,26,9)   -0.011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.2216/GBP, high of US$1.2328/GBP and settled the day up by 0.648% to close at US$1.2316/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 1.2310-1.2010 with target 1.2420-1.2490 and 1.2545-1.2620-1.2730 with stop loss closing below 1.2730. Sell in between 1.2420-1.2730 with targets at 1.2310-1.2200-1.2150 and 1.2070-1.2010-1.1945 with stop loss should be 1.2690.

 
Intraday Support Levels
S1     1.2310-1.2200
S2     1.2150
S3     1.2070-1.2010

Intraday Resistance Levels
R1     1.2420-1.2490
R2     1.2545
R3     1.2620-1.2730

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

39.251

Buy
20-DMA   1.2498 Sell
50-DMA   1.2792 Sell
100-DMA   1.3042 Sell
200-DMA   1.3265 Sell
STOCH(5,3)   67.970 Buy
MACD(12,26,9)   -0.018 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY128.69/USD and made an intraday high of JPY129.63/USD and settled the day down 0.0843% at JPY129.08/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     128.90-127.50
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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