AAFX TRADING

Daily Market Lookup

  • The dollar was set for its biggest weekly drop in nearly four months as traders lowered Federal Reserve rate hike expectations amid signs the U.S. central bank might slow or even pause its tightening cycle in the second half of the year. A broad-based decline in U.S. Treasury yields, weak economic data and cautious comments by some Fed policymakers including Atlanta Fed President Raphael Bostic this week have raised the prospect that the dollar's gains premised on aggressive rate hikes may have halted for now. It hit a nearly two-decade peak above 105 earlier this month but has retreated since then as economic data has weakened. A Citigroup (NYSE:C) economic surprise index for the United States has fallen to its lowest level since September 2021. Minutes from the Fed's May meeting this week showed most participants believed 50 basis-point hikes would be appropriate at the June and July policy meetings, but many thought big, early hikes would allow room to pause later in the year to assess the effects of that policy tightening. The chief beneficiary of the dollar's decline is the euro but that momentum has also stalled as investors believe a lot of the expected rate hikes from the European Central Bank is already baked into current levels. Better risk sentiment did not help bitcoin however, which slipped 1.62% to around $28,710, continuing this week's gradual decline from the psychologically important $30,000 level.
  • The U.S. dollar weakened in early European trade Friday, sinking to a one-month low on rising expectations that the Federal Reserve’s tightening cycle could be relatively short-lived. The dollar climbed to a near 20-year high earlier in the month but has retreated amid signs that monetary policy tightening may already be slowing economic growth. Data released Thursday showed that the U.S. economy shrunk by slightly more than initially estimated in the first quarter of the year, as gross domestic product contracted at an annualized pace of 1.5%, rather than the 1.4% preliminary reading. Additionally, the minutes from the early May Fed meeting, released Wednesday, indicated that the central bank policymakers may be prepared to slow or even pause its tightening cycle in the second half of the year if inflation levels start to retreat. Attention will now turn to the release of the personal consumption expenditure index, due later Friday, with the core version of this index, which excludes the volatile food and energy elements, being the Fed’s primary gauge of inflation. This index is expected to fall to an annualized 4.9% in April, from 5.2% the previous month.
  • Gold was up on Friday morning in Asia and was set for a second weekly gain after the dollar retreated from 20-year highs. The dollar, which normally moves inversely to gold, was down on Friday, continued a fall in the previous session, and was set for a second consecutive weekly decline. Gold fell on Thursday, with the U.S. Federal Reserve's aggressive monetary policy tightening plan dimming bullion’s appeal and a rebound in equities also adding pressure. The minutes from the Fed’s last meeting released earlier in the week, showed that it favored additional 50 basis point rate hikes at its June and July 2022 meetings, as per expectations. U.S. Treasury yields were subdued, with the benchmark 10-year note hitting a fresh six-week low. Inflation fears continue to dissipate even as data and corporate announcements point to slower economic growth.
  • Oil prices dipped on Friday but stayed near a two-month high, with Brent crude on track for its biggest weekly jump in 1-1/2 months, supported by the prospect of an EU ban on Russian oil and the upcoming U.S. summer driving season. The "U.S. market will remain in focus in the near term as we are near the start of the summer driving season. Also in focus will be China's virus situation and whether more measures are being taken to support the economy," she added. Both benchmark crude contracts were poised to end the week higher as the European Commission continued to seek unanimous support of all 27 EU member states for its proposed new sanctions against Russia, with Hungary posing a stumbling block. A top Hungarian aide said the country needed 3-1/2 to 4 years to shift away from Russian crude and make huge investments to adjust its economy. Hungary could not back the EU's proposed oil embargo until there was a deal on all issues, the aide said. OPEC+ is set to stick to last year's oil production deal at its June 2 meeting and raise July output targets by 432,000 barrels per day, six OPEC+ sources told Reuters. The OPEC+ members would thereby rebuff Western calls for a faster increase to lower surging prices. Oil was up on Friday morning in Asia, remaining around a two-month high. Brent crude is on track for its biggest weekly jump in one-and-a-half months, supported by the prospect of the European Union (EU)’s ban on Russian oil and the upcoming U.S. summer driving season. Both Brent and WTI crude contracts are set to end the week higher as the European Commission continues seeking the unanimous support of all 27 bloc member states needed to implement its proposed new sanctions against Russia. Hungary is one member state that remains a stumbling block to this unanimous support. The country needs three-and-a-half to four years to shift away from Russian crude and make huge investments to adjust its economy, according to a top Hungarian aide, adding that Hungary cannot back the EU's proposed oil embargo until there was a deal on all issues. Meanwhile, the Organization of the Petroleum Exporting Countries and allies (OPEC+) is set to leave 2021’s oil production deal unchanged when it meets on June 2. The cartel could raise July output targets by 432,000 barrels per day, rebuffing Western calls for a faster increase to lower surging prices, six OPEC+ sources told Reuters.

 

 
Intraday RESISTANCE LEVELS
27th May 2022 R1 R2 R3
GOLD-XAU 1,859-1,870 1,879 1,890-1,900
Silver-XAG 21.50-22.05 22.50-22.90 23.20-23.75
Crude Oil 113.25-114.50 116.00 117.10-118.20
EURO/USD 1.0740-1.0795 1.0920 1.0970-1.1005
GBP/USD 1.2620-1.2690 1.2745 1.2800-1.2975
USD/JPY 127.50-128.90 129.60 130.60-131.20

Intraday SUPPORTS LEVELS
27th May 2022 S1 S2 S3
GOLD-XAU 1,851-1,840 1,831 1,820-1,805
Silver-XAG 20.90-20.60 20.00 19.60-19.05
Crude Oil 112.50-111.60 110.30-109.00 107.50-106.60
EURO/USD 1.0690-1.0630 1.0550 1.0490-1.0450
GBP/USD 1.2575-1.2490 1.2420 1.2310-1.2200
USD/JPY 126.90-125.70 125.00 124.30-123.50

Intra-Day Strategy (27th 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$1854.26/oz and low of US$1840.85/oz. Gold down 0.112% at US$1850.78/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 Wednesday made its intraday high of US$22.06/oz and low of US$22.00/oz settled down by 0.277% at US$22.00/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 20.90-19.60, targeting 21.60-22.05-22.50 and 23.05--23.95-24.55-25.10 with stop loss should be place on the breakage below 19.50. Sell in between 21.60-23.75 with stop loss above 23.75; targeting 21.50-21.05-20.60 and 20.00-19.60.

 
Intraday  Support Levels
S1     20.90-20.60
S2     20.00
S3     19.60-19.05

Intraday  Resistance Levels
R1     21.50-22.05
R2     22.50-22.90
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)   50.135 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US113.75/bbl, intraday low of US$109.23/bbl and settled up by 0.358% to close at US$113.21/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 113.25-116.50 with stop loss at 116.50; targeting 112.50-111.60-110.30 and 109.00-106.90-105.90. Buy above 112.50-106.60 with risk daily closing below 106.60 and targeting 113.25-114.50-116.00 and 117.10-118.20.

 
Intraday Support Levels
S1     112.50-111.60
S2     110.30-109.00
S3     107.50-106.60

Intraday Resistance Levels
R1     113.25-114.50
R2     116.00
R3     117.10-118.20

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$1.0661/EUR, high of US$1.0730/EUR and settled the day up by 0.291% to close at US$1.0702/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 1.0740-1.0970, targeting 1.0690-1.0630-1.0550 and 1.0490-1.0450-1.0390 with stop-loss at daily closing above 1.1100. Buy above 1.0690-1.0210 with risk below 1.0210, targeting 1.0741-1.0795 and 1.0920-1.0970-1.1005.

 
Intraday Support Levels
S1     1.0690-1.0630
S2     1.0550
S3     1.0490-1.0450

Intraday  Resistance Levels
R1     1.0740-1.0795
R2     1.0920
R3     1.0970-1.1005

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.228 Buy
20-DMA   1.0621 Sell
50-DMA   1.0734 Sell
100-DMA   1.0923 Sell
200-DMA   1.1173 Sell
STOCH(5,3)   78.051 Buy
MACD(12,26,9)   -0.001 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.2551/GBP, high of US$1.2620/GBP and settled the day up by 0.104% to close at US$1.2578/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 1.2575-1.2490-1.2420 and 1.2310-1.2200-1.2150 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     1.2620-1.2690
R2     1.2745
R3     1.2800-1.2975

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

52.981

Buy
20-DMA   1.2523 Sell
50-DMA   1.2722 Sell
100-DMA   1.2967 Sell
200-DMA   1.3208 Sell
STOCH(5,3)   80.970 Sell
MACD(12,26,9)   -0.004 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY126.54/USD and made an intraday high of JPY127.57/USD and settled the day down 0.0911% at JPY127.11/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   122.48 Buy
STOCH(9,6)   28.683 Buy
MACD(12,26,9)   0.0102 Sell

AAFX TRADING
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