AAFX TRADING

Daily Market Lookup

  • The safe-haven dollar clawed back some of its overnight losses on Tuesday and the yen also strengthened as U.S. stock futures sank following a profit warning from Snapchat, souring the mood after Wall Street's strong start to the week. Despite the respite on Tuesday, the U.S. currency has been falling broadly alongside a decline in Treasury yields from multi-year peaks, with aggressive easing by the Federal Reserve already priced in. Meanwhile, positive signs for the global economy such as Shanghai's expected emergence from weeks of crippling COVID-19 lockdowns and U.S. President Joe Biden's comments this week towards a possible easing of the trade war with China have lifted sentiment at the dollar's expense. The release of global manufacturing PMIs over the course of Tuesday will be another key focus for currency traders. The Antipodean currencies rallied 0.83% and 0.91% respectively on Monday. Westpac predicts the kiwi could top $0.69 by year-end, on a rally fuelled by both a climb-down in Fed tightening expectations and optimism about a China reopening. "It's too early to conclude Fed pricing will not rise again, given officials emphasise front loading of the cycle, so that a final burst of USD strength is possible over the next month or two," Westpac strategist Imre Speizer wrote in a client note. "But beyond that, we expect USD strength to fade." The euro retreated 0.22% to $1.0667, although barely denting the 1.17% surge from Monday, when European Central Bank President Christine Lagarde said policymakers were likely to lift the euro area deposit rate out of negative territory by the end of September.
  • The dollar was up on Tuesday morning in Asia. The safe-haven asset clawed back some of its overnight losses, and the yen also strengthened, as U.S. stock futures fell following a profit warning from Snapchat. The U.S. currency clawed back its losses after Monday's 0.85% fall, which took it further from the nearly two-decade peak above 105 hit during the middle of the month. European Central Bank President Christine Lagarde said policymakers were likely to lift the euro area deposit rate out of negative territory by the end of September 2022. The dollar has been falling alongside U.S. Treasury yields from multi-year highs, and the market has already priced in aggressive easing by the Federal Reserve. Meanwhile, there are small positive signs for the global economy, with the Chinese city of Shanghai expected to lift its lockdown soon and U.S. President Joe Biden's comments earlier in the week about a possible easing of the trade war with China lifting risk sentiment at the dollar's expense. Investors now await other global manufacturing PMIs over the course of the day will be another key focus for investors.
  • Gold was up on Tuesday morning in Asia. The dollar was up, stabilizing after its fall during the previous session that helped boost the yellow metal to its highest point in two weeks. The dollar, which normally moves inversely to gold, was up on Tuesday after falling to a one-month low in the previous session. Benchmark U.S. 10-year Treasury yields also eased. The U.S. Federal Reserve could hike its target interest rate to about 2% by August 2022, with further action dependent on how both supply and demand are affecting inflation, Kansas City Fed President Esther George said on Monday. Investors now await the minutes from the Fed's last meeting, due on Wednesday. The Reserve Bank of New Zealand will hand down its policy decision on the same day, with the Bank of Korea following on Thursday. Asian Pacific shares were mostly down on Tuesday, after an early slide in U.S. stock futures cooled a rally in U.S. shares. The euro was near a one-month high, with bets increasing that the European Central Bank will hike its interest rate in July 2022. Russian palladium mining and smelting company Nornickel on Monday slashed its estimate for the global palladium market deficit in 2022 to 100,000 troy ounces. This is due to lower demand from the car industry amid the war in Ukraine and the slow recovery of the chip market from a shortage.
  • Oil prices fell by more than $1 on Tuesday as concerns over a possible recession and China's COVID-19 curbs outweighed an expectation of tight global supply and a pick-up in fuel demand with the U.S. summer driving season. Multiple threats to the global economy topped the worries ofthe world's well-heeled at the annual Davos economic summit,with some flagging the risk of a worldwide recession. International Monetary Fund Managing Director KristalinaGeorgieva said she did not expect a recession for majoreconomies but could not rule one out. While Shanghai, China's commercial hub, aims to normalise life from June 1 as its coronavirus caseloads decline, an increase in new COVID-19 cases in Beijing has raised concerns for further curbs. The Chinese capital detected 99 new cases on Sunday, up from 61 the previous day - the largest daily tally so far during a month-old outbreak that has consistently seen dozens of new infections every day. Losses were limited by expectations that gasoline demand would remain high amid tight supplies. The United States is set to enter its peak driving season beginning on Memorial Day weekend at the end of this week. An embargo on Russian oil imports will likely be agreed on by the European Union "within days," according to its biggest member Germany, as Moscow said it saw its economic ties growing with China after being isolated by the West over its invasion of Ukraine. The world is facing an oil supply crunch, with most companies afraid to invest in the sector as they face green energy pressures, the head of Saudi Aramco told Reuters, adding it cannot expand production capacity any faster than promised.

 

 
Intraday RESISTANCE LEVELS
24th 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 109.00-110.30 111.60-112.50 113.25-114.50
EURO/USD 1.0690 1.0741 1.0805-1.0945
GBP/USD 1.2620 1.2745 1.2800-1.2975
USD/JPY 128.90-129.60 130.60 131.20-132.00

Intraday SUPPORTS LEVELS
24th 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 107.50-106.60 105.50 104.00-102.60
EURO/USD 1.0630-1.0550 1.0490 1.0450-1.0390
GBP/USD 1.2575-1.2490 1.2420 1.2310-1.2200
USD/JPY 127.50-126.90 125.70 125.00-124.30

Intra-Day Strategy (24th 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$1865.37/oz and low of US$1832.30/oz. Gold up 0.413% at US$1853.35/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 Monday made its intraday high of US$22.18/oz and low of US$21.66/oz settled up by 0.183% at US$21.79/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 US111.25/bbl, intraday low of US$108.54/bbl and settled up by 0.205% to close at US$110.00/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 109.00-116.50 with stop loss at 116.50; targeting 110.30-109.00 and 106.90-105.90-104.50. Buy above 107.50-100.20 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     107.50-106.60
S2     105.50
S3     104.00-102.60

Intraday Resistance Levels
R1     109.00-110.30
R2     111.60-112.50
R3     113.25-114.50

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 Monday made an intraday low of US$1.0554/EUR, high of US$1.0696/EUR and settled the day up by 1.211% to close at US$1.0688/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 1.0690-1.0945, 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 1.0610-1.0210 with risk below 1.0210, targeting 1.0610-1.0690-1.0741 and 1.0805-1.0945.

 
Intraday Support Levels
S1     1.0630-1.0550
S2     1.0490
S3     1.0450-1.0390

Intraday  Resistance Levels
R1     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 Monday made an intra‐day low of US$1.2465/GBP, high of US$1.2600/GBP and settled the day up by 0.971% to close at US$1.2586/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 1.2575-1.2010 with target 1.2620-1.2745 and 1.2800-1.2975 with stop loss closing below 1.2010. Sell in between 1.2620-1.2975 with targets at 1.2575-1.2420-1.2310 and 1.2200-1.2150-1.2070 with stop loss should be 1.2975.

 
Intraday Support Levels
S1     1.2575-1.2490
S2     1.2420
S3     1.2310-1.2200

Intraday Resistance Levels
R1     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 Monday made intra‐day low of JPY127.14/USD and made an intraday high of JPY128.05/USD and settled the day down 0.027% at JPY127.88/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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