AAFX TRADING

Daily Market Lookup

  • The U.S. dollar edged higher in early European trade Wednesday, rebounding after overnight losses, while sterling weakened after U.K. inflation soared in April. USD/JPY fell 0.1% to 129.25, with the safe-haven yen also suffering from the improved tone, while USD/CNY rose 0.1% to 6.7450, with the yuan handing back some gains after Shanghai achieved its long-awaited milestone of three consecutive days with no new COVID-19 cases outside quarantine zones. Confidence has been returning to the financial markets, helped by gains in stock markets as U.S. retail sales rose strongly in April, suggesting consumers are successfully weathering the sharp price rises so far. U.K. inflation rose to its highest level in 40 years ago, with data released Wednesday showing consumer prices surged 9% in the year through April, adding to pressure for action from the Bank of England. The central bank raised interest rates to 1% at its last policy-setting meeting, its fourth successive hike, and this jump in inflation suggests it will have to continue tightening monetary policy even though the risk of recession is mounting. The equivalent CPI data from the Eurozone is scheduled for release later in the session and is expected to show annual consumer inflation at 7.5% in April, with the monthly figure climbing 0.6%. The European Central Bank has been relatively slow in starting to tighten monetary policy, but expectations are growing that the bank will be forced to raise interest rates in the summer given the inflationary threat. European Central Bank Governing Council member Klaas Knot, on Tuesday, became the first Eurozone official to suggest a possible half-point interest rate hike if inflation risks worsen, although he currently supports a quarter-point increase in July. The Netherlands governor is one of the ECB’s most hawkish policymakers, but his comments do suggest the hawks are winning the policy-tightening debate.
  • The dollar was up on Wednesday morning in Asia. Overnight surges gave the euro and pound Euro and sterling cling onto overnight gains The pound and euro on Wednesday held onto most of their gains a boost in early trading, alongside strong U.K. jobs data and a general improvement in investor sentiment thanks to positive U.S. retail sales data and hopes that China will ease COVID-19 lockdowns. The Chinese city of Shanghai on Tuesday hit a long-awaited milestone of three consecutive days with no new COVID-19 cases outside quarantine zones, with authorities setting out the city’s clearest timetable to date for exiting a lockdown the day before. Reflecting the improved risk sentiment, equities jumped overnight, and U.S. benchmark Treasury yields were on an upward trend, last hitting the 2.9878% mark. The higher U.S. yields also saw an end to the yen's small recent recovery, with the Japanese currency sensitive to higher U.S. rates. U.S. Federal Reserve Chairman Jerome Powell also said at a Wall Street Journal event on Tuesday that the Fed will "keep pushing" to tighten its monetary policy until there are clear signs that inflation is slowing.
  • Gold was down on Wednesday morning in Asia, with the dollar continuing its retreat from a 20-year high and countering pressure from stronger Treasury yields. Investors also digested the latest hawkish comments from U.S. Federal Reserve Chairman Jerome Powell. The dollar, which normally moves inversely to gold, edged up on Wednesday but extended its decline into a fourth day. Investors’ increased appetites for riskier bets also took the edge off the safe-haven greenback's appeal. Powell on Tuesday pledged that the U.S. central bank would hike interest rates as needed to curb sky-high inflation that he said threatened the foundation of the economy. The Fed has hiked its interest rate by three-quarters of a percentage point in 2022 to date and is on track to hike it again in half-percentage-point increments at its next two meetings in June and July 2022. Philadelphia Fed President Patrick Harker will speak, and a G-7 finance ministers and central bankers meeting will take place, later in the day. In Asia Pacific, Japan’s GDP contracted 1% year-on-year and 0.2% quarter-on-quarter in the first quarter of 2022, while Australia’s wage price index grew 2.4% year-on-year and 0.7% quarter-on-quarter. Strong U.S. retail sales and factory data for April gave investor sentiment a boost, with consumers purchasing motor vehicles and frequenting restaurants, showing no signs of a slowdown in demand despite high inflation.
  • Oil prices edged up on Wednesday on expectations that easing COVID-19 restrictions in China will push up demand and as industry data showed drawdowns in U.S crude inventories. The authorities allowed 864 of Shanghai's financial institutions to resume work, sources said on Wednesday, a day after the Chinese city achieved a milestone of three consecutive days with no new COVID-19 cases outside quarantine zones Raising supply concerns, U.S. crude and gasoline stocks fell last week, according to market sources who cited American Petroleum Institute figures on Tuesday. Crude stocks fell by 2.4 million barrels for the week ended May 13, they said. U.S. government data is due on Wednesday. But prices could still face some pressure after reports that the United States was allowing Chevron Corp (NYSE:CVX) to negotiate oil licences with Venezuela's national producer, temporarily lifting a U.S. ban on such talks that could lead to more crude hitting the market, ANZ Research analysts said. The European Union's failure on Monday to persuade Hungary to lift its veto on a proposed embargo on Russian oil could also weigh, although some diplomats expect agreement on a phased ban at a summit at the end of May. For the economic outlook, U.S. Federal Reserve Chairman Jerome Powell on Tuesday said the central bank would ratchet up interest rates as high as needed to stifle inflation that he said threatened the foundation of the economy.

 

 
Intraday RESISTANCE LEVELS
18th May 2022 R1 R2 R3
GOLD-XAU 1,820-1,831 1,840 1,851-1,858
Silver-XAG 22.05-22.50 22.90 23.20-23.75
Crude Oil 111.60-112.50 113.25-114.00 115.80-116.50
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
18th May 2022 S1 S2 S3
GOLD-XAU 1,805-1,789 1,780 1,769-1,760
Silver-XAG 21.50-20.90 20.60 20.00-19.60
Crude Oil 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 (18th 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$1836.10/oz and low of US$1812.83/oz. Gold up 0.509% at US$1814.82/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 1821-1890 keeping stop loss closing above 1890, targeting 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     1,805-1,789
S2     1,780
S3     1,769-1,760
Intraday Resistance Levels
R1     1,820-1,831
R2     1,840
R3     1,851-1,858

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$21.91/oz and low of US$21.50/oz settled up by 0.097% at US$21.62/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 Tuesday made an intra‐day high of US113.14/bbl, intraday low of US$108.91/bbl and settled down by 0.820% to close at US$110.60/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 111.60-116.50 with stop loss at 116.50; targeting 111.60-110.30-108.90 and 108.00-106.90-105.90-104.50. Buy above 110.30-106.90 with risk daily closing below 106.90 and targeting 111.60-112.50-113.25 and 114.00-115.80-116.50.

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

Intraday Resistance Levels
R1     111.60-112.50
R2     113.25-114.00
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 Tuesday made an intraday low of US$1.0427/EUR, high of US$1.0555/EUR and settled the day up by 1.140% to close at US$1.0546/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 Tuesday made an intra‐day low of US$1.2313/GBP, high of US$1.2328/GBP and settled the day up by 0.648% to close at US$1.2489/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   1.2792 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 Tuesday made intra‐day low of JPY128.82/USD and made an intraday high of JPY129.77/USD and settled the day up 0.195% at JPY129.33/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
AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING