AAFX TRADING

Daily Market Lookup

  • The U.S. dollar was headed for its worst week since early February against major peers on Friday, weighed down by a retreat in Treasury yields and fatigue after the currency's breathless 10%, 14-week surge. Even with global stocks sliding this week amid risks to growth from aggressive monetary tightening - led by the Federal Reserve - and China's strict lockdowns to quash a COVID-19 outbreak, the dollar's appeal as a haven was eclipsed overnight by a decline in U.S. yields as investors rushed for the safety of Treasury bonds. Other safe-haven currencies continued to rally overnight, as a key index of global equities headed for a seventh weekly decline, its longest ever. Concerns are growing that the Fed and other central banks have fallen behind the curve in combating super-hot inflation, and will need to be ever more aggressive in tightening policy, inflicting pain on the economy as a consequence. The war in Ukraine shows no sign of abating either, darkening the outlook for commodity price-driven inflation. China's path out of coronavirus lockdowns also remains unclear, threatening more global price pressures, even as Shanghai prepares to allow more businesses in zero-COVID areas to resume normal operations from the beginning of June and its ports now operating at 90% capacity.
  • The dollar was up on Friday morning in Asia, headed for its worst week since early February 2022 as U.S. Treasury yields retreat and fatigue after the greenback's 10%, 14-week surge. However, global shares continue their fall as aggressive monetary tightening, led by the U.S. Federal Reserve, and China's COVID-19 continue to pose challenges to economic growth. The dollar's safe-haven appeal was also eclipsed by a fall in U.S. yields as investors turned to Treasury bonds. Concerns are now growing that the Fed and other central banks have fallen behind in curbing inflation and will need to be ever more aggressive in tightening policy. The ongoing war in Ukraine, precipitated by the Russian invasion on Feb. 24, is also darkening the outlook for commodity price-driven inflation. In Asia-Pacific, China's path out of its COVID-19 lockdowns remains unclear, even as the city of Shanghai prepares to allow more businesses in zero-COVID areas to resume normal operations from the beginning of June 2022. Signs of a re-opening in China lent some support to the antipodean currencies. The Australian dollar fell on Friday, with its U.S. counterpart bouncing a bit after the Aussie's 1.33% surge on Thursday.
  • Gold was down on Friday morning in Asia but set for its first weekly gain since mid-April 2022. The dollar retreated from two-decade highs and growing concerns over U.S. economic growth saw investors turn to the safe-haven asset. However, the U.S. Federal Reserve's aggressive rate hike path and quantitative tightening would still be major down-drafts for gold, he added. The U.S. central bank will hike interest rates higher by the end of 2022 than anticipated just a month ago, keeping the already signification risks of a recession alive, according to a Reuters poll of economists. Reflecting this rising demand, SPDR Gold Trust also said its holdings rose 0.66% to 1,056.18 tons on Thursday, following its recent losses.
  • Oil prices fell on Friday as investors worried that weakening global economic growth and tighter central bank monetary policy could curb a recovery in fuel demand. The International Monetary Fund (IMF) urged Asian economies to be mindful of spillover risks from monetary tightening. Asian economies faced a choice between supporting growth with more stimulus and withdrawing it to stabilise debt and inflation, IMF Deputy Managing Director Kenji Okamura said. While Bank of Japan policy runs counter to a global shift towards monetary tightening, central banks in the United States, Britain and Australia raised interest rates recently. Crude gains have been limited this week, with Brent and WTI mostly trading in a range due to the uncertain path of demand. Investors, worried about rising inflation and more aggressive action from central banks, have been reducing exposure to riskier assets. In the United States, Americans were getting back behind the wheel, despite higher fuel prices, according to a report from the Federal Highway Administration on vehicle miles. On the gasoline supply side, South Korea's third-largest refiner S-Oil halted production at its No. 2 alkylation unit and related processes at its Onsan refinery due to a blast. The shutdown following Thursday night's blast that killed one person is expected to affect already tight gasoline supplies in Asia. Citi analysts expect S-Oil's gasoline output to be "severely impacted" in the near term, although it could buy alkylate to maintain production. Iran, meanwhile, is having a tougher time selling its crude now that more Russian barrels are available. Iran's crude exports to China have fallen sharply since the start of the Ukraine war as Beijing favoured heavily discounted Russian barrels, leaving almost 40 million barrels of Iranian oil stored on tankers at sea in Asia and seeking buyers.

 

 
Intraday RESISTANCE LEVELS
20th May 2022 R1 R2 R3
GOLD-XAU 1,851-1,859 1,870 1,879-1,890
Silver-XAG 22.05-22.50 22.90 23.20-23.75
Crude Oil 109.00-110.30 111.60 112.50-113.25
EURO/USD 1.0610-1.0690 1.0741 1.0805-1.0945
GBP/USD 1.2490 1.2545 1.2620-1.2730
USD/JPY 128.90-129.60 130.60 131.20-132.00

Intraday SUPPORTS LEVELS
20th May 2022 S1 S2 S3
GOLD-XAU 1,840-1,831 1,820 1,805-1,789
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 1.0550-1.0490 1.0450 1.0390-1.0305
GBP/USD 1.2420-1.2310 1.2200 1.2150-1.2070
USD/JPY 127.50-126.90 125.70 125.00-124.30

Intra-Day Strategy (20th 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$1849.05/oz and low of US$1810.84/oz. Gold up 1.405% at US$1841.92/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 1851-1890 keeping stop loss closing above 1890, targeting 1831-1820-1801 and 1789-1780-1769. Buy in between 1851-1769 with risk below 1769, targeting 1831-1840 and 1848-1858-1868.

 
Intraday Support Levels
S1     1,840-1,831
S2     1,820
S3     1,805-1,789
Intraday Resistance Levels
R1     1,851-1,859
R2     1,870
R3     1,879-1,890

Technical Indicators

Name   Value Action
14DRSI  

41.861

Buy
20-DMA   1859.01 Buy
50-DMA  

1885.39

Buy
100-DMA   1878.98 Buy
200-DMA   1855.93 Buy
STOCH(5,3)   72.831 Sell
MACD(12,26,9)   -25.400 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$21.98/oz and low of US$21.27/oz settled up by 2.44% at US$21.92/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 Thursday made an intra‐day high of US109.81/bbl, intraday low of US$102.95/bbl and settled down by % to close at US$108.89/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 109.10-116.50 with stop loss at 116.50; targeting 106.90-105.90-104.50. Buy above 106.90-100.20 with risk daily closing below 100.20 and targeting 109.00-110.30-111.60 and 112.50-113.25-114.00

 
Intraday Support Levels
S1     106.90-105.50
S2     104.00-102.60
S3     102.00-100.20

Intraday Resistance Levels
R1     109.00-110.30
R2     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 Thursday made an intraday low of US$1.0459/EUR, high of US$1.0606/EUR and settled the day up by 1.141% to close at US$1.0579/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 1.0610-1.0945, targeting 1.0550-1.0490-1.0450 and 1.0390-1.3050-1.0305 with stop-loss at daily closing above 1.1150. Buy above 1.0550-1.0210 with risk below 1.0210, targeting 1.0610-1.0690-1.0741 and 1.0805-1.0945.

 
Intraday Support Levels
S1     1.0550-1.0490
S2     1.0450
S3     1.0390-1.0305

Intraday  Resistance Levels
R1     1.0610-1.0690
R2     1.0741
R3     1.0805-1.0945

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.903 Buy
20-DMA   1.0568 Sell
50-DMA   1.0741 Sell
100-DMA   1.0946 Sell
200-DMA   1.1197 Sell
STOCH(5,3)   77.688 Buy
MACD(12,26,9)   -0.011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.2333/GBP, high of US$1.2523/GBP and settled the day up by 1.036% to close at US$1.2460/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 1.2420-1.2010 with target 1.2490 and 1.2545-1.2620-1.2730 with stop loss closing below 1.2730. Sell in between 1.2490-1.2730 with targets at 1.2420-1.2310-1.2200 and 1.2150-1.2070-1.2010 with stop loss should be 1.2690.

 
Intraday Support Levels
S1     1.2420-1.2310
S2     1.2200
S3     1.2150-1.2070

Intraday Resistance Levels
R1     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)   1.3265 Buy
MACD(12,26,9)   -0.018 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY128.93/USD and made an intraday high of JPY128.93/USD and settled the day down 0.336% at JPY127.78/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 128.50-132.50 with risk above 132.50 targeting 127.50-126.90-126.10 and 125.00-124.30. Long positions above 127.50-124.30 with targets of 128.90-129.60-130.60 and 131.20-132.00-132.90 with stop below 124.30.

 
Intraday Support Levels
S1     127.50-126.90
S2     125.70
S3     125.00-124.30

INTRADAY RESISTANCE LEVELS
R1     128.90-129.60
R2     130.60
R3     131.20-132.00

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)   116.74 Buy
MACD(12,26,9)   0.0102 Sell

AAFX TRADING
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