AAFX TRADING

Daily Market Lookup

  • The dollar was up on Thursday morning in Asia, hitting a three-week high against the yen in early Asian trading. The U.S. currency held firm and was supported by rising U.S. Treasury yields, which hit two-week peaks overnight. The U.S. benchmark 10-year yield hit a two-week high of 2.951% on Wednesday, with data showing U.S. manufacturing activity picked up in May 2022 as demand for goods remained strong. The manufacturing purchasing managers’ index (PMI) at 57 and the ISM manufacturing PMI was 56.1. U.S. job openings also remained at high levels, with the Institute of Supply Management (ISM) manufacturing employment index at 49.6 and the JOLTs jobs opening index at 11.4 million. Yields have been on an upward trend as the U.S. Federal Reserve has hiked interest rates quickly in an attempt to curb inflation and avoid an economic recession. Investors are also awaiting Friday's U.S. jobs report, including non-farm payrolls. The European Central Bank will have its policy meeting in the following week, where it is expected to give more details about its plans for interest rate hikes.
  • The dollar hit a three-week high against the yen in early trade on Thursday and held its gains against other majors, supported by this week's advances in U.S. Treasury yields, which hit two-week peaks overnight. The U.S. benchmark 10-year yield hit a two-week high of 2.951% on Wednesday after data showed U.S. manufacturing activity had picked up in May as demand for goods remained strong, which could allay fears of an imminent recession. U.S. job openings also remained at high levels. Yields have been rising as the U.S. Federal Reserve has raised interest rates quickly in an attempt to bring red hot inflation under control while hoping to avoid pushing the economy into recession. This surge stopped last week after Atlanta Fed President Raphael Bostic raised the possibility of a pause in interest rate rises at the Fed's September meeting, depending on the inflation situation and the economic impact of higher rates. Traders are looking to more U.S. employment data due later Thursday and to Friday's U.S. payroll data. They are also starting to turn their minds towards next week's European Central Bank (ECB) policy meeting, at which the central bank is expected to give more details about its plans for rate increases.
  • Gold was down on Thursday morning in Asia, with the yellow metal caught between support from slightly lower U.S. Treasury yields and pressure from a firm dollar. Prices are consolidating now, GoldSilver Central MD Brian Lan said, adding that trading in this range could continue with some investors sitting on the sidelines due to an absence of major news. Investors are also awaiting gold’s reaction to Shanghai’s lifting of lockdowns. While there could be pent-up demand on the physical side, institutions holding large amounts of gold may liquidate to raise funds, according to Lan. Benchmark U.S. 10-year Treasury yields fell and the dollar, which normally moves inversely to gold, inched up on Thursday. The greenback steadied after hitting a more than one-week peak on Wednesday.
  • -Oil prices fell on Thursday as investors cashed in on a recent rally ahead of a key producers meeting later in the day, with some speculation that Saudi Arabia may boost oil production in response to urging by the United States. While China's gradual emergence from strict COVID-19 lockdowns has helped support prices, speculation that Saudi Arabia may step up production weighed on the market, said Tsuyoshi Ueno, senior economist at NLI Research Institute Saudi Arabia is prepared to raise its oil production if Russia's output falls substantially because of the Western sanctions imposed on it, the Financial Times reported on Wednesday, citing sources. Production increases scheduled for September would be brought forward to July and August, the paper said Still, others expect OPEC+ - a grouping of the Organization of the Petroleum Exporting Countries (OPEC) and associated allied producers, including Russia - will keep its production policy unchanged.Five OPEC+ sources said on Wednesday that OPEC was set to stick to its modest monthly increases in oil output, despite seeing tighter global markets Saito predicted the market, which was dented by profit-taking, would regain ground after the meeting, because of lingering tightness in global supply and strong demand for fuel in the United States and Europe. The Wall Street Journal reported on Tuesday that some OPEC members were considering suspending Russia from the agreed production plan, to allow other producers to pump significantly more crude, as sought by the United States and European nations. But two OPEC+ sources told Reuters a technical meeting on Wednesday had not discussed the idea. Six other OPEC+ delegates said the idea was not being discussed by the group. An OPEC+ technical committee trimmed its forecast for the 2022 oil market surplus by about 500,000 bpd to 1.4 million bpd, two OPEC+ sources said. OPEC+ is working on making up for a drop in Russian oil output, two OPEC+ sources said on Thursday, as Russia's production has fallen by around 1 million barrels per day as a result of Western sanctions on Moscow over Ukraine. One OPEC+ source familiar with the Russian position said Moscow could agree to other producers compensating for its lower output but it may not happen at a Thursday meeting and might not be in full. A Gulf OPEC+ source said a decision on the matter was "highly possible" at a meeting on Thursday. The group is meeting online later on Thursday and has been widely expected to stick to its planned monthly modest output increases despite tighter global markets. However, Western sanctions imposed on Russia over Ukraine may result in production and export cuts from the world's second largest oil exporter of as much as 2-3 million bpd, according to various estimates. Russia was already producing below its OPEC+ target of 10.44 million barrels per day (bpd) in April with output of around 9.3 million bpd.

 

 
Intraday RESISTANCE LEVELS
2nd June 2022 R1 R2 R3
GOLD-XAU 1,851-1,859 1,870 1,879-1,890
Silver-XAG 22.50-22.90 23.20 23.75-24.25
Crude Oil 112.50--113.25 114.50-115.80 117.10-118.20
EURO/USD 1.0750-1.0795 1.0920 1.0970-1.1005
GBP/USD 1.2575-1.2630 1.2690-1.2745 1.2800-1.2975
USD/JPY 129.60-130.60 131.20 132.00-132.90

Intraday SUPPORTS LEVELS
2nd June 2022 S1 S2 S3
GOLD-XAU 1,840-1,831 1,820-1,808 1,795-1,786
Silver-XAG 21.50 20.90 20.60-20.00
Crude Oil 111.60-109.90 107.60 105.90-104.00
EURO/USD 1.0690-1.0630 1.0550 1.0490-1.0450
GBP/USD 1.2490-1.2420 1.2310 1.2200-1.2150
USD/JPY 128.90-127.50 126.90 125.70-125.00

Intra-Day Strategy (2nd June 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 Tuesday made its intraday high of US$1849.89/oz and low of US$1828.38/oz. Gold up 0.480% at US$1846.14/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 1842-1827-1820 and 1801-1789-1780. Buy in between 1842-1769 with risk below 1769, targeting 1858-1868 and 1879-1890-1900.

 
Intraday Support Levels
S1     1,840-1,831
S2     1,820-1,808
S3     1,795-1,786
Intraday Resistance Levels
R1     1,851-1,859
R2     1,870
R3     1,879-1,890

Technical Indicators

Name   Value Action
14DRSI  

46.024

Buy
20-DMA   1857.00 Buy
50-DMA  

1878.02

Buy
100-DMA   1878.02 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 Wednesday made its intraday high of US$21.96/oz and low of US$21.42/oz settled up by 1.341% at US$21.83/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 Wednesday made an intra‐day high of US116.39/bbl, intraday low of US$113.16/bbl and settled down by 1.80% to close at US$113.47/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 111.60-118.20 with stop loss at 119.00; targeting 111.60-110.10-107.60 and 105.90-104.00. Buy above 111.60-104.00 with risk daily closing below 104.00 and targeting 112.50-113.25-114.50 and 105.80-117.10-118.20.

 
Intraday Support Levels
S1     111.60-109.90
S2     107.60
S3     105.90-104.00

Intraday Resistance Levels
R1     112.50--113.25
R2     114.50-115.80
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 Wednesday made an intraday low of US$1.0626/EUR, high of US$1.0738/EUR and settled the day down by 0.788% to close at US$1.0644/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 Wednesday made an intra‐day low of US$1.2457/GBP, high of US$1.2616/GBP and settled the day down by 0.938% to close at US$1.2481/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 1.2575-1.2650-1.2745 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 and 1.2310-1.2200-1.2150 with stop loss should be 1.2975.

 
Intraday Support Levels
S1     1.2490-1.2420
S2     1.2310
S3     1.2200-1.2150

Intraday Resistance Levels
R1     1.2575-1.2630
R2     1.2690-1.2745
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 Wednesday made intra‐day low of JPY128.50/USD and made an intraday high of JPY130.18/USD and settled the day up 1.242% at JPY130.09/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     128.90-127.50
S2     126.90
S3     125.70-125.00

INTRADAY RESISTANCE LEVELS
R1     129.60-130.60
R2     131.20
R3     132.00-132.90

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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