AAFX TRADING

Daily Market Lookup

  • The dollar was down on Thursday morning in Asia. Safe-haven currencies pressed paused after the previous session’s big gains. However, concerns are growing that tighter monetary policies from the U.S. Federal Reserve and other global central banks could impact economic growth. Japanese trade data for April 2022, released earlier in the day, showed that exports rose 12.5% year-on-year, imports rose 28.2% year-on-year, and the trade balance contracted to -¥839.2 billion (-$6.51 billion). However, investor sentiment remains fragile despite safe-haven assets cooling a recent rally. Asian stocks and U.S. futures were down, tracking a 4% drop for the S&P 500 and a 5% plunge for the Nasdaq the day before. Poor U.S. housing data on Wednesday added to economic slowdown concerns, with building permits at 1.819 million but contracting 3.2% month-on-month in April 2022. Housing starts were at 1.724 million but contracted 0.2% month-on-month. Fed Chairman Jerome Powell adopted his most hawkish tone to date earlier in the week, saying the U.S. central bank would hike interest rates as high as needed to stem a surge in inflation that threatened the foundation of the economy. Powell's stance "makes it hard to achieve a 'soft landing' for the U.S. economy given the long lags between changes in monetary policy and changes in inflation," Commonwealth Bank of Australia currency strategist Joseph Capurso said in a note. Back in Asia-Pacific, the Australian dollar shook off a smaller-than-forecast increase in the employment change, which was 4,000 in April 2022. The latest employment data also showed that the full employment change was 92,400 and the unemployment rate was 3.9%.Despite these safe-haven assets cooling after a recent rally, sentiment remains fragile on mounting concerns that aggressive tightening by the Federal Reserve and other global central banks could choke growth. Fed Chair Jerome Powell had said earlier in the week that the U.S. central bank would push interest rates as high as needed to stem a surge in inflation, and weak U.S. housing data on Wednesday added to slowdown concerns. The “comments by Fed Chair Powell were quite relevant from a signaling perspective, as he firmly reiterated the Fed’s determination to bring inflation sustainably lower, even by hiking beyond the neutral rate if necessary,” said analysts at ING, in a note. “The notion of aggressive Fed tightening continues to argue against a sustained bearish dollar trend.” Attention, Thursday will turn towards the release of the minutes from the last European Central Bank meeting, due for release later in the session, with investors looking for clues for a potential timetable for monetary policy tightening. Dutch central banker Klaas Knot, on Tuesday, raised the possibility of a 50 basis points hike in July, the first time that any ECB policymaker has mentioned that, and Bank of Finland Governor Olli Rehn said on Wednesday that the ECB should get its key rate above zero “relatively quickly.”
  • Gold was down on Thursday morning in Asia, with a steady dollar and elevated Treasury yields weighing on the greenback-priced bullion, whose outlook has already been dampened by the U.S. Federal Reserve’s aggressive stance on inflation. Gold's daily closing price is effectively hugging the trendline projected from its March 2020 low, and intraday volatile spikes on either side of that key trendline have lacked conviction to prompt a sustainable move, City Index senior market analyst Matt Simpson told Reuters. The yellow metal has largely seemed to track daily moves in both the dollar and benchmark U.S. 10-year Treasury yields in recent weeks. A greenback near 20-year highs pushed gold to its lowest in well over three months on Monday. Gold's performance and outlook have also been impacted as the Fed adopts a more hawkish monetary policy stance on interest rate hikes. Fed Chairman Jerome Powell on Tuesday said that the U.S. central bank would hike its interest rates as needed to curb inflation which he said threatened the foundation of the economy. In Asia-Pacific, Japanese trade data for April 2022 showing that exports rose 12.5% year-on-year and imports rose 28.2% year-on-year. The trade balance contracted to -¥839.2 billion (-$6.51 billion).
  • Oil prices rose on Thursday, recovering from early losses, on hopes that planned easing of restrictions in Shanghai could improve fuel demand while lingering concerns over tight global supplies outweighed fears of slower economic growth. The European Union this month proposed a new package of sanctions against Russia for its invasion of Ukraine. This would include a total ban on oil imports in six months' time, but the measures have not yet been adopted, with Hungary being among the most vocal critics of the plan. The European Commission unveiled on Wednesday a 210 billion euro ($220 billion) plan for Europe to end its reliance on Russian fossil fuels by 2027, and to use the pivot away from Moscow to quicken its transition to green energy. Also, U.S. crude inventories fell last week, an unexpected drawdown, as refiners ramped up output in response to tight product inventories and near-record exports that have forced U.S. diesel and gasoline prices to record levels. [EIA/S] Capacity use on both the East Coast and Gulf Coast was above 95%, putting those refineries close to their highest possible running rates. In China, investors are closely watching plans in the country's most populous city, Shanghai, to ease restrictions from June 1, which could lead to a rebound in oil demand at the world's top crude importer. Stephen Innes from SPI Asset Management said news that Shanghai planned to gradually resume inter-district public transport from May 22 was positive for risk and supporting oil prices.

 

 
Intraday RESISTANCE LEVELS
19th 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 108.00-108.90 110.30-111.60 112.50-113.25
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
19th 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 106.90-105.50 104.00-102.60 102.00-100.20
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 (19th 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$1824.67/oz and low of US$1807.26/oz. Gold up 0.0876% at US$1816.32/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 Wednesday made its intraday high of US$21.74/oz and low of US$21.36/oz settled down by 0.990% at US$21.40/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 Wednesday 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 108.00-116.50 with stop loss at 116.50; targeting 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     106.90-105.50
S2     104.00-102.60
S3     102.00-100.20

Intraday Resistance Levels
R1     108.00-108.90
R2     110.30-111.60
R3     112.50-113.25

TECHNICAL INDICATORS
Name   Value Action
14DRSI   54.140 Sell
20-DMA   105.51 Buy
50-DMA   102.62 Buy
100-DMA   97.04 Buy
200-DMA   88.06 Buy
STOCH(5,3)   60.206 Sell
MACD(12,26,9)   1.807 Buy

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.0459/EUR, high of US$1.0563/EUR and settled the day down by 0.798% to close at US$1.0460/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 Wednesday made an intra‐day low of US$1.2329/GBP, high of US$1.2500/GBP and settled the day up by 1.24% to close at US$1.2333/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 Wednesday made intra‐day low of JPY128.00/USD and made an intraday high of JPY129.52/USD and settled the day down 0.911% 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     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

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