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Daily Market Lookup

  • The U.S. dollar edged lower in early European trade Monday, with activity limited ahead of the release of key U.S. consumer inflation data as well as a major European Central Bank meeting. The index had gained around 0.5% last week after Friday’s U.S. jobs report showed that employers added 390,000 jobs in May, more than expected, which added to expectations that the U.S. Federal Reserve will remain forceful in tackling inflation. Attention this week will concentrate on the U.S. consumer price index for May, which is due for release on Friday. A high inflation reading would add to expectations of aggressive tightening by the U.S. Federal Reserve, and likely put an end to last month's speculation that the Fed will take a break from raising interest rates at its September meeting. That said, core inflation, which excludes the volatile energy and fuel prices and is the Fed’s preferred gauge, is expected to come in at 5.9% year over year, a drop from 6.2% the previous month. That would mark a third month of consecutive declines and make the case that core inflation may have peaked. Also of note this week is Thursday's meeting by the European Central Bank, which is expected to prepare the ground for an interest rate hike at its July meeting, especially after recent data showed Eurozone consumer inflation accelerated in May to hit a new record high of 8.1%. The risk-sensitive AUD/USD edged lower to 0.7204 ahead of Tuesday’s meeting of the Reserve Bank of Australia, which is expected to result in a 25 basis point rate hike as the central bank tightens policy to combat inflation.
  • The yen was on the back foot on Monday and the dollar held firm against most peers ahead of a busy policy-focused week in which inflation is in the spotlight with a major European Central Bank meeting and U.S. consumer price data scheduled. Barclays (LON:BARC) analysts attributed last week's softer yen to a recovery in risk assets, a rise in overseas yields, a stronger dollar and higher oil prices causing concerns about Japan's balance of trade. The dollar index, which measures the greenback against six major peers, was at 102.06 after gaining 0.47% last week following good jobs and manufacturing data, snapping a two-week losing streak. Top of the agenda for many traders this week is Thursday's meeting by the European Central Bank, which is expected to prepare the ground for an interest rate hike at its July meeting. There is some market speculation the ECB could start with a large 50 basis point rise, after euro zone inflation accelerated to yet another record high in May. Markets are currently pricing in 125 basis points of hikes at the ECB's four meetings this year. The euro was a whisker firmer at $1.0733 on Monday morning and sterling was steady at $1.2505, not immediately affected by reports British Prime Minister Boris Johnson is expected to face a vote of confidence A high inflation reading would add to expectations of aggressive tightening by the U.S. Federal Reserve and likely put an end to last month's speculation it will take a break from raising interest rates at its September meeting. Fifty basis point hikes in June and July are priced in.
  • Oil futures gained on Monday, with Brent rising above $120 a barrel after Saudi Arabia raised prices for its crude sales in July, signalling tight supply even after OPEC+ producers agreed to accelerate output increases over the next two months. Saudi Arabia raised the July official selling price (OSP) for its flagship Arab light crude to Asia by $2.10 from June to $6.50 premium versus the average of the Oman and Dubai benchmarks, state oil producer Aramco (TADAWUL:2222) said on Sunday. The July OSP is the highest since May, when prices hit all-time highs due to worries of disruption in supplies from Russia because of sanctions over its invasion of Ukraine. The price increase came despite a decision last week by the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, to increase output in July and August by 648,000 barrels per day, or 50% more than planned. Iraq said on Friday it aimed to raise output to 4.58 million bpd in July. Oil producers are "making hay while the sun shines", Avtar Sandu, manager of commodities at Phillip Futures in Singapore said, adding that U.S. summer driving demand and easing of COVID-19 lockdowns in China were expected to keep prices high. The OPEC+ decision to bring forward output increases is widely seen as unlikely to meet demand as the increased allocation is spread across all members, including Russia, which is facing sanctions. On Monday, Citibank and Barclays (LON:BARC) raised their price forecasts for 2022 and 2023 on tighter Russian supplies and the delayed return of Iranian oil. Citi analysts said reconfigured flows to Asia could mean Russian production and exports would not ultimately fall so much, but more in the range of 1 million to 1.5 million bpd. Barclays expect Russian oil output to fall by 1.5 million bpd by end-2022 Separately, Italy's Eni and Spain's Repsol (OTC:REPYY) could begin shipping Venezuelan oil to Europe as soon as next month to make up for Russian crude, five people familiar with the matter told Reuters, resuming oil-for-debt swaps halted two years ago when Washington stepped up sanctions on Venezuela. However, the volume that the companies will receive is not expected to be large, the people said.

 

 
Intraday RESISTANCE LEVELS
6th June 2022 R1 R2 R3
GOLD-XAU 1,859-1,870 1,879-1,890 1,900-1,908
Silver-XAG 22.50-22.90 23.20 23.75-24.25
Crude Oil 118.20-119.00 120.10 121.00-122.10
EURO/USD 1.0755-1.0795 1.0920 1.0970-1.1005
GBP/USD 1.2575-1.2630 1.2690-1.2745 1.2800-1.2975
USD/JPY 131.20-132.00 132.90 133.50

Intraday SUPPORTS LEVELS
6th June 2022 S1 S2 S3
GOLD-XAU 1,851-1,840 1,831 1,820-1,808
Silver-XAG 22.05-21.50 20.90 20.60-20.00
Crude Oil 117.10-115.80 114.50 113.25-111.60
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 130.60-129.60 128.90-127.50 126.90-125.70

Intra-Day Strategy (6th 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 Friday made its intraday high of US$1874.02/oz and low of US$1847.41/oz. Gold down 0.939% at US$1851.07/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 1859-1907 keeping stop loss closing above 1907, targeting 1851-1842-1827 and 1820-1801-1789. Buy in between 1859-1808 with risk below 1808, targeting 1870-1879-1890 and 1900-1907.

 
Intraday Support Levels
S1     1,851-1,840
S2     1,831
S3     1,820-1,808
Intraday Resistance Levels
R1     1,859-1,870
R2     1,879-1,890
R3     1,900-1,908

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 Friday made its intraday high of US$22.47/oz and low of US$21.84/oz settled down by 1.739% at US$21.91/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     22.05-21.50
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   50.588 Buy
20-DMA   22.12 Sell
50-DMA   22.83 Sell
100-DMA   23.32 Sell
200-DMA   23.68 Sell
STOCH(5,3)   71.135 Buy
MACD(12,26,9)   0.272 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US118.78/bbl, intraday low of US$113.67/bbl and settled up by 2.409% to close at US$118.70/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 118.20-122.10 with stop loss at 122.10; targeting 114.50-113.25-111.60 and 110.10-107.60-105.90. Buy above 117.10-109.90 with risk daily closing below 109.00 and targeting 105.80-117.10-118.20 and 119.00-120.10.

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

Intraday Resistance Levels
R1     118.20-119.00
R2     120.10
R3     121.00-122.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   61.122 Sell
20-DMA   110.83 Buy
50-DMA   106.36 Buy
100-DMA   100.19 Buy
200-DMA   90.659 Buy
STOCH(5,3)   60.915 Sell
MACD(12,26,9)   1.807 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.0703/EUR, high of US$1.0764/EUR and settled the day down by 0.236% to close at US$1.0718/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     1.0755-1.0795
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 Friday made an intra‐day low of US$1.2484/GBP, high of US$1.2589/GBP and settled the day down by 0.691% to close at US$1.2488/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 Friday made intra‐day low of JPY129.67/USD and made an intraday high of JPY130.97/USD and settled the day up 0.849% at JPY130.88/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 130.60-133.50 with risk above 133.50 targeting 129.60-128.90-127.50 and 126.90-126.10-125.00. Long positions above 129.60-124.30 with targets of 130.60-131.20-132.00 and 132.90-133.50 with stop below 124.30.

 
Intraday Support Levels
S1     130.60-129.60
S2     128.90-127.50
S3     126.90-125.70

INTRADAY RESISTANCE LEVELS
R1     131.20-132.00
R2     132.90
R3     133.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   61.567 Buy
20-DMA   128.49 Buy
50-DMA   126.58 Buy
100-DMA   122.76 Buy
200-DMA   119.00 Buy
STOCH(9,6)   92.683 Buy
MACD(12,26,9)   0.0102 Sell

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