AAFX TRADING

Daily Market Lookup

  • The U.S. dollar weakened in early European trade Monday, with risk sentiment boosted by hopes that loosening lockdowns in China can help global growth. The safe haven dollar appears to have lost momentum with risk sentiment on the rise, boosted by the news that Shanghai, China’s commercial hub, is set to lift its city-wide lockdown and return to more normal life from June 1. Additionally, Beijing authorized an unexpectedly large rate cut last week, which has been taken as a signal that the Chinese authorities are going to provide support to the world’s second largest economy. Australia elected a new government on Saturday, but this is not expected to impact the Reserve Bank of Australia’s thinking regarding monetary policy. The Reserve Bank of New Zealand is expected to raise its benchmark cash rate by 50 basis points on Wednesday. GBP/USD climbed 0.7% to 1.2573, with the important U.K. housing market still showing strength. Asking prices for U.K. homes rose to a new record for a fourth straight month, according to data from real estate company Rightmove, rising 2.1% in May, the highest for the month since 2014. Attention later this week will turn to the release on Wednesday of the minutes of the last Federal Reserve, with traders looking for clues about whether the U.S. central bank can curb the most aggressive inflation in four decades without tipping the economy into recession. The Fed has already hiked interest rates by 75 basis points since March and markets are pricing in 50 basis point rate hikes in June and July.
  • The euro rallied on Monday as investors sold the dollar on hopes that loosening lockdowns in China could help global growth. A calmer mood on equity markets in early European trading also pressured the dollar, which fell sharply last week but has been the go-to currency for investors this year when risk assets tumbled and worries about the economy and inflation jumped. Risk-sensitive currencies rose across the board, with the Australian dollar, which initially showed a muted reaction to the expected victory for the centre-left Labor Party in national elections on the weekend, soaring almost 1%. Sentiment around China also helped. Shanghai is edging out of lockdown and an unexpectedly big rate cut in China last week was taken as a signal that authorities are going to provide support. The yuan had its best week since late 2020 last week and in offshore markets on Monday firmed to 6.6555 per dollar, its strongest level since early May. Geopolitics are also in focus in Asia this week as U.S. President Joe Biden tours the region, promoting greater U.S. economic engagement and seeking to push back against China's influence. The U.S. dollar has soared this year. But with expectations for aggressive Federal Reserve interest rate hikes priced in, some analysts say further gains may be tougher from here.
  • Gold was up on Monday morning in Asia, hitting a more than one-week high. A weakening dollar continued to support the greenback-priced yellow metal, even as rising U.S. Treasury yields capped gains. The dollar, which normally moves inversely to gold, was down on Monday following its first weekly loss in nearly two months. Benchmark U.S. 10-year Treasury yields firmed after a three-session losing streak. The U.S. Federal Reserve will also release the minutes from its latest meeting due on Wednesday. St. Louis Fed President James Bullard has already repeated his view during the past week that the U.S. Fed should hike interest rates to 3.5% in 2022 to control inflation quicker. In Asia-Pacific, the Reserve Bank of New Zealand will hand down its policy decision on Wednesday, with the Bank of Korea’s decision following a day later.
  • Oil prices gained on Monday with U.S. fuel demand, tight supply and a slightly weaker U.S. dollar supporting the market, as Shanghai prepares to reopen after a two-month lockdown fuelled worries about a sharp slowdown in growth. The U.S. peak driving season traditionally begins on Memorial Day weekend at the end of May and ends on Labour Day in September. Analysts said despite fears about soaring fuel prices potentially denting demand, mobility data from TomTom and Google (NASDAQ:GOOGL) had climbed in recent weeks, showing more people were on the roads in places like the United States. A weaker U.S. dollar also sent oil higher on Monday, as that makes crude cheaper for buyers holding other currencies. Market gains have been capped, however, by concerns about China's efforts to crush COVID-19 with lockdowns, even with Shanghai due to reopen on June 1. Lockdowns in China, the world's top oil importer, have hammered industrial output and construction, prompting moves to prop up the economy, including a bigger-than-expected mortgage rate cut last Friday The European Union's inability to reach a final agreement on banning Russian oil for its invasion of Ukraine, which Moscow calls a "special operation", has also stopped oil prices from climbing much higher.

 

 
Intraday RESISTANCE LEVELS
23rd May 2022 R1 R2 R3
GOLD-XAU 1,859-1,870 1,879 1,890-1,900
Silver-XAG 22.05-22.50 22.90 23.20-23.75
Crude Oil 111.60-112.50 113.25 114.50-115.90
EURO/USD 1.0630-1.0690 1.0741 1.0805-1.0945
GBP/USD 1.2575-1.2620 1.2745 1.2800-1.2975
USD/JPY 128.90-129.60 130.60 131.20-132.00

Intraday SUPPORTS LEVELS
23rd May 2022 S1 S2 S3
GOLD-XAU 1,851-1,840 1,831 1,820-1,805
Silver-XAG 21.50-20.90 20.60 20.00-19.60
Crude Oil 110.30-109.00 106.90-105.50 104.00-102.60
EURO/USD 1.0550-1.0490 1.0450 1.0390-1.0305
GBP/USD 1.2490-1.2420 1.2310 1.2200-1.2150
USD/JPY 127.50-126.90 125.70 125.00-124.30

Intra-Day Strategy (23rd 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 Friday made its intraday high of US$1849.46/oz and low of US$1832.30/oz. Gold up 0.266% at US$1846.54/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 1859-1890 keeping stop loss closing above 1890, targeting 1851-1831-1820 and 1801-1789-1780. Buy in between 1851-1769 with risk below 1769, targeting 1858-1868-1879 and 1890-1900.

 
Intraday Support Levels
S1     1,851-1,840
S2     1,831
S3     1,820-1,805
Intraday Resistance Levels
R1     1,859-1,870
R2     1,879
R3     1,890-1,900

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 Friday made its intraday high of US$22.07/oz and low of US$21.60/oz settled down by 0.798% at US$21.74/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 Friday made an intra‐day high of US110.52/bbl, intraday low of US$107.65/bbl and settled down by 0.949% to close at US$109.78/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 110.30-109.00 and 106.90-105.90-104.50. Buy above 110.30-100.20 with risk daily closing below 100.20 and targeting 111.60 and 112.50-113.25-114.00

 
Intraday Support Levels
S1     110.30-109.00
S2     106.90-105.50
S3     104.00-102.60

Intraday Resistance Levels
R1     111.60-112.50
R2     113.25
R3     114.50-115.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   54.140 Sell
20-DMA   105.51 Buy
50-DMA   105.51 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 Friday made an intraday low of US$1.0532/EUR, high of US$1.0598/EUR and settled the day down by 0.155% to close at US$1.0562/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     1.0630-1.0690
R2     1.0741
R3     1.0805-1.0945

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.903 Buy
20-DMA   1.0568 Sell
50-DMA   1.0568 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 Friday made an intra‐day low of US$1.2436/GBP, high of US$1.2499/GBP and settled the day up by 0.209% to close at US$1.2486/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 1.2490-1.2010 with target 1.2490 and 1.2575-1.2620-1.2745 and 1.2800-1.2975 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     1.2490-1.2420
S2     1.2310
S3     1.2200-1.2150

Intraday Resistance Levels
R1     1.2575-1.2620
R2     1.2745
R3     1.2800-1.2975

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 Friday made intra‐day low of JPY127.52/USD and made an intraday high of JPY128.29/USD and settled the day up 0.0626% at JPY127.85/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)   52.683 Buy
MACD(12,26,9)   0.0102 Sell

AAFX TRADING
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