AAFX TRADING

Daily Market Lookup

  • The U.S. dollar edged lower in early European trade Wednesday, consolidating near a 20-year high ahead of the conclusion of the Federal Reserve's two-day policy meeting which is expected to result in more aggressive monetary tightening. The Fed signaled at its meeting in May that half-point increases were very likely at its following two meetings, but expectations have been rising in the wake of Friday’s red-hot U.S. consumer inflation report that it will act even more aggressively this week, and raise its benchmark rate by at least three-quarters of one point. Market pricing indicates a 95% chance of a 75 basis point rate hike, according to the CME's Fedwatch tool, up from only 3.9% a week ago. EUR/USD rose 0.5% to 1.0470, rebounding from the one-month low seen overnight after it was announced that the European Central Bank’s Governing Council will hold a meeting later Wednesday “to discuss current market conditions.” This meeting comes after the spreads between the yields of Germany and more indebted southern nations, particularly Italy, soared to its highest in over two years in the wake of the ECB’s announcement that it intends to start lifting interest rates in July. The Bank of Japan holds its latest policy meeting on Friday, and faces a dilemma of trying to support its currency while trying to boost a struggling economy.
  • The euro jumped after the ECB's governing council said it would hold an emergency meeting on Wednesday to discuss the recent sell-off in government bond markets, briefly distracting traders ahead of a much-watched Fed meeting. The European common currency rose as much as 0.55% against the dollar to $1.0475, following the announcement of the meeting, which comes after the spread between the yields of Germany and more indebted southern nations, particularly Italy, soared to its highest in over two years. The Federal Reserve policy meeting is due to conclude later on Wednesday, and markets are pricing in an outsized 75 basis point interest rate hike as policymakers try to rein in rampant inflation. Market pricing indicates a 95% chance of a 75 basis point rate hike at the Fed's meeting, according to the CME's Fedwatch tool, up from only 3.9% a week ago, though down a fraction from more than 99% earlier in the day. The sharp pick up in expectations followed media reports, first by the Wall Street Journal, that a bigger rate increase was on the cards after data released last week showed the U.S. consumer price index surged 8.6% in the 12 months to May, the largest year-on-year increase in four decades. The U.S. dollar had already been gaining ground in the past few months thanks to the Fed raising rates ahead of most other major central banks and has been given another leg up in recent weeks as investors seek safe havens fearing the economic impact of rapidly tightening financial conditions. But with such a large interest rate increase already expected, the dollar may struggle to gain further after the Fed's decision. Higher U.S. rates versus rock bottom Japanese yields have been weighing on the yen, which hit a new 24-year low of 135.58 per dollar in early trade.
  • Gold was up on Wednesday morning in Asia from near one-month lows as Treasury yields weakened ahead of the U.S. Federal Reserve meeting which is expected to announce aggressive interest rate hikes to tame high inflation. The Fed is expected to announce its policy decisions later in the day. The central bank is expected to raise interest rates by 75 basis points. Investors also await policy decisions from other central banks. The Bank of England will hand down its policy decision on Thursday, while the Bank of Japan will hand it down the day following.
  • Oil prices rose on Wednesday, rebounding from losses earlier in the session amid concerns over fuel demand and the broader economy ahead of an expected big hike in interest rates by the U.S. Federal Reserve. Surging inflation has led investors and oil traders to brace for a big move by the Fed this week - a 75-basis-point increase, which would be the largest U.S. interest rate hike in 28 years. On the demand side, China's latest COVID outbreak, traced to a 24-hour bar in Beijing, has raised fears of a new phase of lockdowns. The country's economy, however, showed signs of recovery in May after slumping in the prior month as industrial production rose unexpectedly. In its monthly report, the Organization of the PetroleumExporting Countries (OPEC) stuck to its forecast that world oil demand will exceed pre-pandemic levels in 2022. Still, offering some support to prices is tight supply, which has been aggravated by a drop in exports from Libya amid a political crisis that has hit output and ports. Oil was up on Wednesday morning in Asia amid concerns of uncertain economic outlook ahead of potentially aggressive U.S. interest rate hikes decisions. Tuesday’s U.S. crude supply data from the American Petroleum Institute showed a build of 0.736 million barrels for the week ended June 10. Friday’s red-hot inflation data has raised the market expectations of an interest rate hike by 75 basis points, the largest in 28 years. The new COVID-19 outbreaks in Beijing and the following curbs added to worries about the second largest country’s oil demand. The Organization of Petroleum Exporting Countries and allies (OPEC+) stuck to its forecast that world oil demand will exceed pre-pandemic levels in 2022 in its monthly report. Investors now await crude supply data from the U.S. Energy Information Administration, due later in the day.

 

 
Intraday RESISTANCE LEVELS
15th 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 117.10-118.20 119.00-120.10 121.00-122.00
EURO/USD 1.0490-1.0550 1.0630-1.0690 1.0755-1.0795
GBP/USD 1.2050-1.2100 1.2150 1.2200-1.2310
USD/JPY 131.20-130.60 136.00 136.40-137.00

Intraday SUPPORTS LEVELS
15th June 2022 S1 S2 S3
GOLD-XAU 1,820-1,807 1,798 1,787-1,780
Silver-XAG 21.20-20.90 20.45 20.10-19.60
Crude Oil 115.80-114.40 113.00 110.50-109.60
EURO/USD 1.0460-1.0390 1.0330 1.0290-1.0250
GBP/USD 1.2050-1.2010 1.1940 1.1890-1.1850
USD/JPY 134.00-133.50 132.90-132.00 131.20-130.60

Intra-Day Strategy (15th 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$1831.50/oz and low of US$1805.00/oz. Gold down 0.628% at US$1808.11/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 1831-1907 keeping stop loss closing above 1907, targeting 1820-1801 and 1787-1780. Buy in between 1808-1786 with risk below 1786, targeting 1831-1840-1851 and 1870-1879-1890.

 
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 Tuesday made its intraday high of US$21.37/oz and low of US$20.88/oz settled down by 0.270% at US$21.03/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     21.20-20.90
S2     20.45
S3     20.10-19.60

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 Tuesday made an intra‐day high of US120.97/bbl, intraday low of US$114.25/bbl and settled down by 1.814% to close at US$116.37/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 117.10-125.10 with stop loss at 125.10; targeting 115.80-114.50-113.25 and 110.50-109.60. Buy above 115.80-109.50 with risk daily closing below 109.50 and targeting 117.10-118.20-119.00 and 120.10-121.00-122.00.

 
Intraday Support Levels
S1     115.80-114.40
S2     113.00
S3     110.50-109.60

Intraday Resistance Levels
R1     117.10-118.20
R2     119.00-120.10
R3     121.00-122.00

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 Tuesday made an intraday low of US$1.0396/EUR, high of US$1.0484/EUR and settled the day up by 0.102% to close at US$1.0414/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 Tuesday made an intra‐day low of US$1.1933/GBP, high of US$1.2207/GBP and settled the day down by 1.487% to close at US$1.1994/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     1.2050-1.2010
S2     1.1940
S3     1.1890-1.1850

Intraday Resistance Levels
R1     1.2050-1.2100
R2     1.2150
R3     1.2200-1.2310

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

30.732

Buy
20-DMA   1.2393 Sell
50-DMA   1.2587 Sell
100-DMA   1.2838 Sell
200-DMA   1.3111 Sell
STOCH(5,3)   10.247 Sell
MACD(12,26,9)   -0.011 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY133.86/USD and made an intraday high of JPY135.46/USD and settled the day up 0.778% at JPY135.46/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     131.20-130.60
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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