AAFX TRADING

Daily Market Lookup

  • The dollar hovered near a one-month low on Thursday as minutes from the Federal Reserve's May meeting confirmed the potential for a pause in rate hikes after likely further increases in June and July. However, the index has mostly been consolidating around 102 after a short-lived bounce to 102.45 immediately following Wednesday's release of the minutes. Analysts said there was nothing to suggest a further ramp up of the Federal Open Market Committee's already hawkish stance. Wall Street rallied overnight on that outlook, while long-term Treasury yields held steady. Atlanta Fed President Raphael Bostic had already suggested earlier this week that a pause might be the best course of action in September to monitor the effects on the economy following two more 50-basis-point hikes in June and July. The dollar index reached a nearly two-decade peak above 105 mid-month, but signs that aggressive Fed action may already be slowing economic growth have prompted traders to scale back tightening bets, with Treasury yields also dropping from multi-year high. A strong commitment to fight inflation and a willingness to take monetary policy to restrictive levels "suggest the FOMC may fail to deliver a soft landing for the U.S. economy (and) signs the U.S. economy is losing momentum will support the USD and the JPY," she wrote in a research note.
  • The dollar hovered near a one-month low on Thursday as minutes from the Federal Reserve's May meeting confirmed the potential for a pause in rate hikes after likely further increases in June and July. Analysts said there was nothing to suggest a further ramp up of the Federal Open Market Committee's already hawkish stance. Wall Street rallied overnight on that outlook, while long-term Treasury yields held steady. Atlanta Fed President Raphael Bostic had already suggested earlier this week that a pause might be the best course of action in September to monitor the effects on the economy following two more 50-basis-point hikes in June and July. The dollar index reached a nearly two-decade peak above 105 mid-month, but signs that aggressive Fed action may already be slowing economic growth have prompted traders to scale back tightening bets, with Treasury yields also dropping from multi-year highs. The 10-year Treasury yield tracked sideways in Tokyo at 2.75%, continuing its consolidation around that level this week. A strong commitment to fight inflation and a willingness to take monetary policy to restrictive levels "suggest the FOMC may fail to deliver a soft landing for the U.S. economy (and) signs the U.S. economy is losing momentum will support the USD and the JPY," she wrote in a research note.
  • Gold prices dropped on Thursday as the dollar edged higher, with some investors cashing in after minutes of a U.S. Federal Reserve policy meeting showed that the central bank was likely to stay the course on interest-rate hikes. The Fed's commitment to raising rates has affected gold a little, with some profits being taken as the news sinks in, and prices could drop to $1,820 or so, said Brian Lan, managing director at dealer GoldSilver Central. Gold cut some dollar strength-driven losses on Wednesday after notes from the Fed's May meeting suggested the central bank would not get more aggressive, and would raise interest rates again by 50 basis points in June and July to combat inflation. In the longer term, however, investors that know a recession is looming are looking at something of high value that can tide them through this period, and gold will shine, Lan said. Higher short-term U.S. interest rates and bond yields raise the opportunity cost of holding bullion, which yields nothing. Gold is, however, seen as a safe-haven asset during financial crises. It was positive for gold that the Fed will put in two more half-percentage-point hikes and then wait to see its economic impact, so gold's response has been quiet disappointing, said Michael McCarthy, chief strategy officer at Tiger Brokers, Australia.
  • Oil prices rose on Thursday, extending a cautious rally this week on signs of tight supply while the European Union (EU) wrangles with Hungary over plans to ban imports from Russia, the world's second-largest crude exporter, after it invaded Ukraine. A bigger-than-expected drawdown in U.S. crude inventories in the week to May 20, following soaring exports, buoyed the market on Wednesday. Analysts said the inventory draw and the prospect of an EU embargo on Russian oil, in retaliation for what Moscow calls its "special military operation" in Ukraine, were pushing prices highe. European Council President Charles Michel on Wednesday said he is confident that an agreement can be reached before the council's next meeting on May 30. However, Hungary remains a stumbling block to the unanimous support needed for EU sanctions. Hungary is pressing for about 750 million euros ($800 million) to upgrade its refineries and expand a pipeline from Croatia to enable it to switch away from Russian oil. Even without a formal ban, much less Russian oil is available to the market as buyers and trading houses avoid dealing with crude and fuel suppliers from the country. A forecast increase in oil output to a record high of 5.2 million barrels per day (bpd) in the Permian Basin of the United States is unlikely to plug the 2 million to 3 million bpd gap from lost Russian supply, said Commonwealth Bank commodities analyst Vivek Dhar. Still, this week's rise in oil markets has been tempered by strict COVID-19 lockdowns increasing concerns about falling fuel demand in China, the world's biggest oil importer, and worries about inflation leading to slower global growth.

 

 
Intraday RESISTANCE LEVELS
26th 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 110.30-111.60 -112.50 113.25-114.50
EURO/USD 1.0690 1.0741 1.0805-1.0945
GBP/USD 1.2575-1.2620 1.2745 1.2800-1.2975
USD/JPY 127.50-128.90 129.60 130.60-131.20

Intraday SUPPORTS LEVELS
26th 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 109.00--107.50 106.60-105.50 104.00-102.60
EURO/USD 1.0630-1.0550 1.0490 1.0450-1.0390
GBP/USD 1.2490 1.2420 1.2310-1.2200
USD/JPY 126.90-125.70 125.00 124.30-123.50

Intra-Day Strategy (26th 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$1868.11/oz and low of US$1842.20/oz. Gold down 0.682% at US$1853.02/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 Tuesday made its intraday high of US$22.13/oz and low of US$21.73/oz settled down by 0.407% at US$21.98/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 US110.81/bbl, intraday low of US$108.45/bbl and settled up by 0.358% to close at US$109.88/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 110.30-116.50 with stop loss at 116.50; targeting 109.00 and 106.90-105.90-104.50. Buy above 109.00-100.20 with risk daily closing below 100.20 and targeting 110.30-111.60 and 112.50-113.25-114.00

 
Intraday Support Levels
S1     109.00--107.50
S2     106.60-105.50
S3     104.00-102.60

Intraday Resistance Levels
R1     110.30-111.60
R2     -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 Wednesday made an intraday low of US$1.0641/EUR, high of US$1.0737/EUR and settled the day down by 0.534% to close at US$1.0671/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 Wednesday made an intra‐day low of US$1.2480/GBP, high of US$1.2590/GBP and settled the day up by 0.299% to close at US$1.2565/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 1.2575-1.2620-1.2745 and 1.2800-1.2975 with stop loss closing below 1.2010. Sell in between 1.2575-1.2975 with targets at 1.2490-1.2420-1.2310 and 1.2200-1.2150-1.2070 with stop loss should be 1.2975.

 
Intraday Support Levels
S1     1.2490
S2     1.2420
S3     1.2310-1.2200

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 Wednesday made intra‐day low of JPY126.65/USD and made an intraday high of JPY127.49/USD and settled the day up 0.336% at JPY127.21/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 127.50-132.50 with risk above 132.50 targeting 127.50-126.90-126.10 and 125.00-124.30. Long positions above 126.90-124.30 with targets of 127.50-128.90-129.60 and 130.60-131.20-132.00 with stop below 124.30.

 
Intraday Support Levels
S1     126.90-125.70
S2     125.00
S3     124.30-123.50

INTRADAY RESISTANCE LEVELS
R1     127.50-128.90
R2     129.60
R3     130.60-131.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   46.561 Buy
20-DMA   128.09 Buy
50-DMA   125.95 Buy
100-DMA   122.48 Buy
200-DMA   118.40 Buy
STOCH(9,6)   28.683 Buy
MACD(12,26,9)   0.0102 Sell

AAFX TRADING
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