AAFX TRADING

Daily Market Lookup

  • The U.S. dollar edged lower in early European trade Tuesday, but remained near a 20-year high as traders prepared for the latest Federal Reserve meeting in the wake of a red-hot U.S. inflation report. The dollar’s recent gains follow the release of Friday’s May U.S. consumer price index, which soared to a new four-decade high of 8.6% on the year and caused traders to price in more aggressive rate hikes as the Federal Reserve struggles to cope with the unexpectedly hot inflation reading. The prospect of more hikes by the Federal Reserve in the near future has resulted in the 2-year Treasury yield climbing strongly, to currently stand at 3.3091%. The 10-year yield is below that, at 3.3050%, an inversion that is usually seen as a sign of an upcoming recession. The yen is the worst-performing major currency this year, down around 14%, as the BoJ keeps rates low while U.S. yields surge on bets for continued Federal Reserve hikes. The annual figure also jumped to 7.9% in May, up from 7.4% in the previous month, suggesting that the European Central Bank will face a challenge in its bid to control soaring inflation. The U.K. jobless rate rose in May as the number of people claiming unemployment benefits fell by less than expected, despite continued gains in overall employment levels. This, coupled with Monday’s fall in April GDP, suggests the BoE will struggle to tame soaring inflation without pushing the country’s economy into recession.
  • The U.S. dollar stood just below a 20-year peak on Tuesday and just about everything else nursed losses as investors braced for aggressive Federal Reserve rate hikes and a possible recession. Markets have scrambled to bet on rapid-fire hikes in the wake of an unexpectedly hot inflation reading on Friday. Consecutive 75 basis point rate rises in June and July are close to fully priced, sending shockwaves across asset classes. The dollar has gained with yields and as investors seek shelter from the storm. The dollar index scaled a two-decade peak of 105.29 on Monday and held near that level in Asia. It has hit one-month highs on the euro, Australian dollar, New Zealand dollar, Swiss franc and Canadian dollar and it made a fresh one-month top of $1.0397 per euro on Tuesday, before retreating slightly to $1.0438. Even the Norwegian crown, which has been supported by firm oil prices and a central bank that began hiking last year, touched a two-year low of 9.9295 per dollar in Asia. The Aussie was the best performer throughout the Asia session, attempting a bounce with S&P 500 futures. It was last up 0.5% to $0.6962, though that is still close to May's trough at $0.6829 and analysts remained cautious. Nerves about official intervention also gave brief respite to the yen, but it was soon on the back foot after the Bank of Japan expanded a round of bond purchases, knocking the 10-year government bond yield back to its 0.25% cap The Fed concludes a two-day meeting on Wednesday and CME's FedWatch tool shows markets priced for a 96% chance of a 75 basis point hike, which would be the biggest since 1994. Futures show expectations of nearly 200 bps of tightening by September and the two-year Treasury yield is up about 50 basis points since Thursday's close at 3.3091%. Dollar gains have punished emerging market currencies, and the flight from risky investments has battered cryptocurrencies.
  • Gold was down on Tuesday morning in Asia and hovered near a four-week low. Wall Street entered a bear market as investors are worried about a recession caused by more aggressive interest rate hikes from the U.S. Federal Reserve. Asian markets tumbled after Wall Street entered a bear market. Bond yields hit a two-decade high, which dented the demand for the non-yield yellow metal. Goldman Sachs forecast a 75-basis point (bp) interest rate hike from the Fed’s June policy meeting on Wednesday. A 75-bp hike would be the biggest since 1994. The Bank of Japan (BOJ) will hand down its policy decisions on Friday. As the yen fell to 24-year lows to the dollar, Japanese Finance Minister Shunichi Suzuki reiterated on Tuesday the government will coordinate with the BOJ.
  • Oil prices rose about $1 in volatile trade on Tuesday as tight global supplies outweighed worries that fuel demand would be hit by a possible recession and fresh COVID-19 curbs in China. Tight global supplies have been aggravated by a drop in exports from Libya amid a political crisis that has hit output and ports, while other producers in OPEC+ struggle to meet their production quotas and Russia faces bans on its oil over the war in Ukraine. ANZ Research analysts cited Libya's oil minister Mohamed Aoun saying production in the country has dropped to 100,000 barrels per day from 1.2 million bpd last year The market will be awaiting weekly U.S. inventory data from the American Petroleum Institute on Tuesday and the U.S. Energy Information Administration on Wednesday for a view of how tight crude and fuel supply remain. Six analysts polled by Reuters expect U.S. crude inventories fell by 1.2 million barrels in the week to June 3, while forecasting that gasoline stockpiles rose by about 800,000 barrels and distillate inventories, which include diesel and heating oil, were unchanged. On the demand side, China's latest COVID outbreak traced to a bar in Beijing has raised fears of a new phase of lockdowns just as restrictions in the country were being eased and fuel demand was expected to firm. The Chinese capital's most populous district, Chaoyang, kicked off a three-day mass testing campaign among its roughly 3.5 million residents on Monday. About 10,000 close contacts of the bar's patrons have been identified, and their residential buildings put under lockdown. Looking ahead, oil prices may face pressure if the U.S. Federal Reserve surprises the markets with a higher-than-expected interest rate hike, CMC Markets analyst Tina Teng said.

 

 
Intraday RESISTANCE LEVELS
14th June 2022 R1 R2 R3
GOLD-XAU 1,840-1,851 1,859 1,870-1,879
Silver-XAG 22.50-22.90 23.20 23.75-24.25
Crude Oil 120.10-121.00 122.00 122.60-123.00
EURO/USD 1.0490-1.0550 1.0630-1.0690 1.0755-1.0795
GBP/USD 1.2200-1.2310 1.2420-1.2490 1.2575-1.2630
USD/JPY 134.60-135.20 136.00 136.40-137.00

Intraday SUPPORTS LEVELS
14th June 2022 S1 S2 S3
GOLD-XAU 1,820-1,807 1,798 1,787-1,780
Silver-XAG 21.25 20.90 20.60-20.00
Crude Oil 119.00-118.20 117.10- 115.80 114.40 -113.00
EURO/USD 1.0460-1.0390 1.0330 1.0290-1.0250
GBP/USD 1.2180-1.2150 1.2100 1.2075-1.2050
USD/JPY 134.00-133.50 132.90-132.00 131.20-130.60

Intra-Day Strategy (14th 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 Monday made its intraday high of US$1819.18/oz and low of US$1818.82/oz. Gold down 2.928% at US$1878.71/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 1840-1907 keeping stop loss closing above 1907, targeting 1827-1820-1801 and 1787-1780. Buy in between 1821-1786 with risk below 1786, targeting 1840-1851-1870 and 1879-1890-1900.

 
Intraday Support Levels
S1     1,820-1,807
S2     1,798
S3     1,787-1,780
Intraday Resistance Levels
R1     1,840-1,851
R2     1,859
R3     1,870-1,879

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$22.00/oz and low of US$20.95/oz settled down by 3.783% at US$21.08/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 21.20-19.60, targeting 21.60-22.05-22.50 and 23.05-23.95-24.55 with stop loss should be place on the breakage below 19.50. Sell in between 21.90-23.75 with stop loss above 23.75; targeting 21.30-21.05-20.60 and 20.00-19.60.

 
Intraday  Support Levels
S1     21.25
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 Monday made an intra‐day high of US119.81/bbl, intraday low of US$115.12/bbl and settled up by 2.067% to close at US$118.46/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 120.10-125.10 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- 115.80
S3     114.40 -113.00

Intraday Resistance Levels
R1     120.10-121.00
R2     122.00
R3     122.60-123.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   63.347 Sell
20-DMA   115.04 Buy
50-DMA   109.51 Buy
100-DMA   102.69 Buy
200-DMA   92.59 Buy
STOCH(5,3)   55.915 Sell
MACD(12,26,9)   1.807 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.0399/EUR, high of US$1.0641/EUR and settled the day up by 0.923% to close at US$1.0/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 1.0490-1.0795, targeting 1.0460-1.0390-1.0330 and 1.0290-1.0250 with stop-loss at daily closing above 1.0795. Buy above 1.0460-1.0250 with risk below 1.0210, targeting 1.0490-1.0550-1.0630 and 1.0690-1.0741-1.0795.

 
Intraday Support Levels
S1     1.0460-1.0390
S2     1.0330
S3     1.0290-1.0250

Intraday  Resistance Levels
R1     1.0490-1.0550
R2     1.0630-1.0690
R3     1.0755-1.0795

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)   -0.0058 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.2320/GBP, high of US$1.2320/GBP and settled the day down by 1.487% to close at US$1.2131/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 1.2150-1.2010 with target 1.2200-1.2310-1.2420 and 1.2490-1.2575-1.2650 with stop loss closing below 1.2010. Sell in between 1.2200-1.2630 with targets at 1.2190-1.2150-1.2100 and 1.2075-1.2050 with stop loss should be 1.2630.

 
Intraday Support Levels
S1     1.2180-1.2150
S2     1.2100
S3     1.2075-1.2050

Intraday Resistance Levels
R1     1.2200-1.2310
R2     1.2420-1.2490
R3     1.2575-1.2630

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 JPY133.58/USD and made an intraday high of JPY135.19/USD and settled the day down 0.0670% at JPY134.41/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 134.60-137.00 with risk above 137.00 targeting 134.00-133.50-132.90 and 132.00-131.20-130.60. Long positions above 134.00-130.60 with targets of 134.60-135.20-136.00 and 136.40-137.00 with stop below 124.30.

 
Intraday Support Levels
S1     134.00-133.50
S2     132.90-132.00
S3     131.20-130.60

INTRADAY RESISTANCE LEVELS
R1     134.60-135.20
R2     136.00
R3     136.40-137.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   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

AAFX TRADING
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