AAFX TRADING

Daily Market Lookup

  • The dollar edged off a two-week high on the euro on Friday, ahead of inflation data that should guide the Federal Reserve's policy tightening path, and after the European Central Bank said it would start its rate-hike campaign next month. U.S. core consumer price growth is expected to cool a fraction, data later in the global day is set to show. Such an outcome would provide some reassurance to those hoping decades-high inflation had peaked in March and that the April pullback was not a one-off. This could give the Fed some wiggle room to raise rates less aggressively later in the year as it tries to rein in inflation without tipping the economy into recession. In the nearer term, markets expect the Fed next week to announce the second of its three consecutive 50-basis-point interest rate hikes, which has boosted the dollar in recent months. Two-thirds of respondents to a Reuters poll of analysts expected a further 25 basis point hike in September. The index "looks to have navigated a more determined and hawkish ECB with relative ease. Their plans to raise rates by 25bp in July and Sep and tabling potentially larger increments was evidently no more hawkish than expected," said analysts at Westpac. The analysts said the index looked to be settling into a range of 101 to 105, with room to test the higher end of that should the U.S. CPI data and next week's Fed meeting underscore the potential for higher U.S. yields. The European Central Bank, on Thursday, said it would end quantitative easing on July 1, then raise interest rates by 25 basis points on July 21. The ECB flagged a bigger rate increase in September unless the inflation outlook improves in the interim period. The Bank of Japan, unlike major peers, has repeatedly committed to keeping interest rates low, sending the yen down to within striking distance of 135.20 hit on Jan. 31, 2002. A break past that would be its lowest since October 1998. Analysts speculate Japanese investors in overseas assets are hedging less of their currency risk due to the weakening yen, extending a trend indicated by Japanese life insurers' publicly announced plans to reduce currency hedging earlier this year. Lifers' plans to reduce FX hedging is "marginally bearish" for the yen, said HSBC in a note on Friday, also lowering their dollar-yen forecast to 135 from the previous 128.
  • The dollar was up on Friday morning in Asia ahead of U.S. inflation data and after the European Central Bank (ECB) suggested future interest rate hikes. China’s producer inflation cooled to its slowest pace in 14 months in May. Official data showed that the producer price index (PPI) rose 6.4% year-on-year in May, while a rise of 8.0% was recorded in April, due to a weaker demand for steel, aluminum, and other raw materials given the COVID-19 disruption. The data also showed that the consumer price index (CPI) rose 2.1% year-on-year in May. Shanghai has resumed partial lockdowns due to new COVID-19 outbreaks after it eased restrictions on June 1. Meanwhile, investors are digesting the signals of interest rate hikes from the ECB with a quarter-point interest rate hike in July and a bigger hike if inflation remains high. The inflation in the eurozone now exceeds 8%. The ECB will also cease net asset purchases on July 1, 2022. Short-dated U.S. Treasury yields jumped higher. Now investors shifted their focus to U.S. inflation data, due later in the day, for more cues on the U.S. Federal Reserve’s interest rate hikes path. The analysts at Westpac said the dollar index was set to settle between 101 to 105, and could stay higher if U.S. CPI data and next week’s Fed meeting underscore a higher yield, according to Reuters.
  • Gold was down on Friday morning in Asia as U.S. Treasury yields rose, with investors looking to U.S. inflation data for more clues on the interest rate hikes path of the U.S. Federal Reserve. The European Central Bank (ECB) announced on Thursday that it will prepare a quarter-point interest rate hike in July and suggested a bigger hike in the fall over long-lasting high inflation. The inflation in the eurozone now exceeds 8%. The ECB also said that it will end net asset purchases on July 1, 2022. Now investors shifted their focus to the U.S. consumer price index (CPI) and assess how aggressive the interest rate hikes from the Fed would be. U.S. initial jobless claims increased to the highest level in nearly five months last week, suggesting that the job market remained tight. In Asia-Pacific, China’s factory factory-gate inflation cooled Defying global surge, China's factory inflation hits 14-month low China's factory-gate inflation cooled to its slowest pace in 14 months in May, to its slowest pace in 14 months in May. Official data released earlier in the day showed that the producer price index (PPI) rose 6.4% year-on-year in May, while a rise of 8.0% was recorded in April.

 

 
Intraday RESISTANCE LEVELS
10th 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 120.10-121.00 122.00 123.90-125.00
EURO/USD 1.0690-1.0755 1.0795 1.0920-1.0970
GBP/USD 1.2575-1.2630 1.2690-1.2745 1.2800-1.2975
USD/JPY 132.90-133.50 134.00 134.60-135.00

Intraday SUPPORTS LEVELS
10th June 2022 S1 S2 S3
GOLD-XAU 1,840-1,831 1,820 1,808-1,800
Silver-XAG 21.50 20.90 20.60-20.00
Crude Oil 119.00-118.20 117.10 115.80-114.50
EURO/USD 1.0630-1.0550 1.0490 1.0460-1.0390
GBP/USD 1.2490-1.2420 1.2310 1.2200-1.2150
USD/JPY 132.00-131.20 130.60-129.60 128.90-127.50

Intra-Day Strategy (10th 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 Thursday made its intraday high of US$1855.33/oz and low of US$1840.02/oz. Gold up 0.260% at US$1847.88/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 1851-1907 keeping stop loss closing above 1907, targeting 1851-1842-1827 and 1820-1801-1789. Buy in between 1841-1790 with risk below 1790, targeting 1840-1851-1870-1879 and 1890-1900-1907.

 
Intraday Support Levels
S1     1,840-1,831
S2     1,820
S3     1,808-1,800
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   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 Thursday made its intraday high of US$22.14/oz and low of US$21.54/oz settled down by 1.485% at US$21.67/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   50.588 Buy
20-DMA   22.12 Sell
50-DMA   22.83 Sell
100-DMA   23.32 Sell
200-DMA   23.32 Sell
STOCH(5,3)   71.135 Buy
MACD(12,26,9)   0.272 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US120.82/bbl, intraday low of US$118.94/bbl and settled down by 0.904% to close at US$119.46/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 112.10-125.10 with stop loss at 125.10; targeting 119.00-118.20-117.10 and 115.80-114.50-113.25. Buy above 119.00-114.50 with risk daily closing below 114.50 and targeting 120.10-121.00-122.00 and 123.90-125.00.

 
Intraday Support Levels
S1     119.00-118.20
S2     117.10
S3     115.80-114.50

Intraday Resistance Levels
R1     120.10-121.00
R2     122.00
R3     123.90-125.00

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 Thursday made an intraday low of US$1.0610/EUR, high of US$1.0773/EUR and settled the day down by 0.926% to close at US$1.0615/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 1.0690-1.0970, 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 1.0630-1.0210 with risk below 1.0210, targeting 1.0741-1.0795 and 1.0920-1.0970-1.1005.

 
Intraday Support Levels
S1     1.0630-1.0550
S2     1.0490
S3     1.0460-1.0390

Intraday  Resistance Levels
R1     1.0690-1.0755
R2     1.0795
R3     1.0920-1.0970

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.443 Buy
20-DMA   1.0662 Buy
50-DMA   1.0720 Buy
100-DMA   1.0881 Sell
200-DMA   1.1127 Sell
STOCH(5,3)   22.051 Buy
MACD(12,26,9)   22.051 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.2486/GBP, high of US$1.2558/GBP and settled the day by 0.308% to close at US$1.2491/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 Thursday made intra‐day low of JPY133.17/USD and made an intraday high of JPY134.55/USD and settled the day up 0.308% at JPY134.32/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     132.00-131.20
S2     130.60-129.60
S3     128.90-127.50

INTRADAY RESISTANCE LEVELS
R1     132.90-133.50
R2     134.00
R3     134.60-135.00

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

AAFX TRADING
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