AAFX TRADING

Daily Market Lookup

  • The dollar was up on Tuesday morning in Asia. The euro gave up some of its recent gains but was still set for its best month in a year, with markets repositioning in anticipation of interest rate hikes in Europe and potentially slower U.S. rate hikes. Chinese data released earlier in the day showed that May 2022’s manufacturing purchasing managers’ index (PMI) was 49.6 and the non-manufacturing PMI was 47.8. German inflation rose to its highest level in nearly half a century in May, according to Monday’s data, strengthening the case for the European Central Bank to hike interest rates more aggressively. The central bank is expected to start to raise rates in July 2022 for the first time since the COVID-19 pandemic began in 2020. With the Eurozone consumer price index (CPI) due later in the day, the German data could mean that the CPI will be above expectations as well, according to CBA analysts. Additionally, "there are a number of ECB officials speaking tonight, no doubt talking up the prospects of higher European interest rates," they said in a note. The euro is also set for a 2.2% gain in May 2022, its biggest monthly rise in a year, and the dollar index fell to a five-week low of 101.29 overnight. However, he added that it remains uncertain whether the U.S. Federal Reserve would pivot away from its aggressive pace of tightening and pointed to hawkish remarks overnight from Fed governor Christopher Waller, noting that “this trend of a weaker dollar could reverse". Rebounding sentiment towards riskier assets and currencies partly caused by an easing of lockdowns in the Chinese city of Shanghai has also weighed on the safe-haven greenback recently, according to other investors. The European Union also agreed in principle on Monday to cut most oil imports from Russia by the end of 2022, giving oil and commodity currencies a boost.
  • The euro gave back some of its recent gains on Tuesday, but was still set for its best month in a year as markets reposition in anticipation of interest rate increases in Europe and the possibility of a slower pace of U.S. rate hikes. This strengthens the case for more aggressive rate rises from the European Central Bank, which is expected to start to raise rates in July for the first time since the pandemic began. Eurozone CPI data is due later on Tuesday, and CBA analysts said the German data implied a possibility that this could come in above expectations as well. In addition, "There are a number of ECB officials speaking tonight, no doubt talking up the prospects of higher European interest rates," they said in a note to clients. The dollar index was at 101.63, having fallen to a five-week low of 101.29 overnight. The index measures the greenback against six peers with the largest weighting given to the euro. He added, however, that there was no certainty that the Federal Reserve would pivot away from an aggressive pace of tightening, and pointed to hawkish remarks overnight from Fed governor Christopher Waller, noting "so this trend of a weaker dollar could reverse". A rebound in sentiment towards riskier assets and currencies partly caused by an easing of lockdowns in China's financial hub of Shanghai has also weighed on the safe-haven greenback recently, say investors. News that European Union leaders agreed in principle on Monday to cut most oil imports from Russia by the end of this year, sent oil prices higher, and boosted commodity currencies.
  • Gold was down on Tuesday morning in Asia. A strengthening dollar and rising U.S. Treasury yields impacted demand for the U.S. currency-priced yellow metal, which is set for a second consecutive monthly loss for the first time since March 2021. The U.S. Federal Reserve should be prepared to raise interest rates by a half percentage point at every meeting from now on until inflation is decisively curbed, Fed Governor Christopher Waller said on Monday. Waller’s colleagues, New York Fed President John Williams, and St. Louis Fed President James Bullard will speak at separate events Wednesday. Cleveland Fed President Loretta Mester will discuss the economic outlook a day later. The Fed is set to start shrinking its $8.9 trillion balance sheet and release its Beige Book on Wednesday. U.S. President Joe Biden will also meet Fed Chairman Jerome Powell later in the day. On the data front, the U.S. jobs report, including non-farm payrolls, is due on Friday. Investors also digested Chinese data released earlier in the day.
  • Oil prices extended gains on Tuesday after the EU agreed to slash oil imports from Russia, fuelling worries of a tighter market already strained for supply amid rising demand ahead of peak U.S. and European summer driving season. European Union leaders agreed in principle to cut 90% of oil imports from Russia by the end of 2022, resolving a deadlock with Hungary over the bloc's toughest sanction yet on Moscow since the invasion of Ukraine three months ago. Oil prices soared in March to their highest since 2008 and are up over 55% so far this year. They should draw further support as demand from China is expected to pick up after the easing of COVID-19 curbs. Shanghai has announced an end to its two-month-long lockdown, and will allow the vast majority of people in China's largest city to leave their homes and drive their cars from Wednesday. On the production side, OPEC+ is set to stick to last year's deal at its meeting on Thursday, with a modest July output hike by 432,000 barrels per day, six OPEC+ sources said, rebuffing Western calls for a faster increase to lower surging prices. Members from the group - the Organization of the Petroleum Exporting Countries and allies led by Russia - maintain that the oil market is balanced and that the recent price hikes are not related to fundamentals.

 

 
Intraday RESISTANCE LEVELS
31st May 2022 R1 R2 R3
GOLD-XAU 1,859-1,870 1,879 1,890-1,900
Silver-XAG 22.50-22.90 23.20 23.75-24.25
Crude Oil 118.20-119.00 119.60 121.00-123.80
EURO/USD 1.0750-1.0795 1.0920 1.0970-1.1005
GBP/USD 1.2630-1.2690 1.2745 1.2800-1.2975
USD/JPY 128.90-129.60 130.60 131.20-132.00

Intraday SUPPORTS LEVELS
31st May 2022 S1 S2 S3
GOLD-XAU 1,851 1,840 1,831-1,820
Silver-XAG 21.50 20.90 20.60-20.00
Crude Oil 117.10-115.80 114.50-113.25 112.50-111.60
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 127.50-126.90 125.70-125.00 124.30-123.50

Intra-Day Strategy (31st 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$1863.87/oz and low of US$1848.07/oz. Gold up 0.1738% at US$1855.57/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
S2     1,840
S3     1,831-1,820
Intraday Resistance Levels
R1     1,859-1,870
R2     1,879
R3     1,890-1,900

Technical Indicators

Name   Value Action
14DRSI  

46.024

Buy
20-DMA   1857.00 Buy
50-DMA  

1878.02

Buy
100-DMA   1875.88 Buy
200-DMA   1855.89 Buy
STOCH(5,3)   47.831 Sell
MACD(12,26,9)   -11.400 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$22.28/oz and low of US$21.90/oz settled down by 0.506% at US$21.99/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 22.10-23.75 with stop loss above 23.75; targeting 21.50-21.05-20.60 and 20.00-19.60.

 
Intraday  Support Levels
S1     21.50
S2     20.90
S3     20.60-20.00

Intraday  Resistance Levels
R1     22.50-22.90
R2     23.20
R3     23.75-24.25

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 US116.03/bbl, intraday low of US$113.74/bbl and settled up by 1.701% to close at US$115.68/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 118.20-123.80 with stop loss at 123.80; targeting 117.10-115.80-114.50 and 113.25-112.50-111.60. Buy above 117.10-111.60 with risk daily closing below 111.60 and targeting 118.20-119.00-119.60 and 121.00-123.80..

 
Intraday Support Levels
S1     117.10-115.80
S2     114.50-113.25
S3     112.50-111.60

Intraday Resistance Levels
R1     118.20-119.00
R2     119.60
R3     121.00-123.80

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$1.0724/EUR, high of US$1.0786/EUR and settled the day up by 0.394% to close at US$1.0775/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.0736), which become immediate support, break below will target 1.0647. 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 1.0750-1.0970, 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     1.0750-1.0795
R2     1.0920
R3     1.0970-1.1005

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.943 Buy
20-DMA   1.0647 Buy
50-DMA   1.0736 Buy
100-DMA   1.0916 Sell
200-DMA   1.1165 Sell
STOCH(5,3)   84.051 Buy
MACD(12,26,9)   -0.001 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.2608/GBP, high of US$1.2659/GBP and settled the day up by 0.281% to close at US$1.2650/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 1.2650-1.2745 and 1.2800-1.2975 with stop loss closing below 1.2010. Sell in between 1.2650-1.2975 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     1.2630-1.2690
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 Monday made intra‐day low of JPY126.85/USD and made an intraday high of JPY127.82/USD and settled the day up 0.366% at JPY127.41/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 128.90-132.50 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 and 130.60-131.20-132.00 with stop below 124.30.

 
Intraday Support Levels
S1     127.50-126.90
S2     125.70-125.00
S3     124.30-123.50

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.575 Buy
20-DMA   127.91 Buy
50-DMA   126.12 Buy
100-DMA   122.76 Buy
200-DMA   118.66 Buy
STOCH(9,6)   58.683 Buy
MACD(12,26,9)   0.0102 Sell

AAFX TRADING
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