AAFX TRADING

Daily Market Lookup

  • The dollar kept trade-sensitive currencies pinned near multi-year lows on Monday and the euro was under pressure as investors sought safety due to worries about slowing global growth. Data on Friday showed euro zone inflation surging to another record, adding to the case for the European Central Bank to raise interest rates this month. Trade is likely to be lightened ahead of the Independence Day holiday in the United States. Safety flows tend to support the greenback, especially at the expense of export-driven currencies, when the world economy is weak. This has kept the dollar elevated even as growth fears have tempered U.S. rate hike expectations. The Atlanta Federal Reserve's much-watched GDP Now forecast has slid to an annualised minus 2.1% for the second quarter, implying the country was already technically in recession. Ahead this week, Australia's central bank will meet on Tuesday and investors are also awaiting publication of minutes from last month's Federal Reserve meeting on Wednesday and U.S. employment data on Friday. Markets have priced in a 40 basis point (bp) rise in Australian interest rates, so the Aussie may not catch much of a boost if a hike of that size, or thereabouts, is delivered. Minutes of the Fed's June policy meeting on Wednesday are almost certain to sound hawkish, given the committee chose to hike rates by a super-sized 75 bps. In the U.S. and elsewhere, signs of economic weakness are becoming more apparent. The Atlantic Federal Reserve’s much-watched GDPNow forecast sees the second quarter running at a negative 2.1%, implying the country was already in a technical recession. Despite the potential recession caused by tightening monetary policies, U.S. Federal Reserve Chair Jerome Powell reiterated last week the Fed’s resolution to tame red hot inflation. Now the market has priced in another hike of 75 basis points from the Fed this month.
  • Gold was up on Monday morning in Asia as the U.S. dollar weakened on growth fears. Benchmark U.S. 10-year Treasury yields fell to their lowest level in a month on Friday, giving non-yielding bullion support. In the U.S. and elsewhere, signs of economic weakness are becoming more apparent. Soft U.S. data suggested downside risks for this Friday’s June payroll report. Investors now await the minutes from the Fed’s June meeting, due on Wednesday, which are almost certain to sound hawkish given the Fed chose to hike rates by a super-sized 75 bps. U.S. markets will be closed for Independence Day. India raised its basic import duty on gold to 12.5% from 7.5% as the world’s second-largest consumer tries to reduce demand and bring down the trade deficit. Top consumer China saw activity bounce back slowly as COVID-19 curbs eased.
  • The euro slipped against the dollar Friday as investors bet that the European Central Bank is unlikely to throw caution to the wind on rate hikes despite data showing inflation swelled to a record. Euro area inflation rose by a record 8.6% in June, above expectations for an 8.4% rise. But the upside surprise isn’t likely to alter the ECB’s rate hike course “as the majority on the monetary policy council seems to prefer a cautious start,” Commerzbank said in a note ahead of the data. The European Central Bank is preparing to deliver its first rate hike in 11 years later this month, with investors betting on a 25 basis points rather than 50 basis points rate hike. The ECB has been battling above-trend inflation, driven by a surge in energy prices, that has many concerned that a recession is more likely than not. But ECB president Christine Lagarde downplayed these fears earlier this week at the Sintra Forum. While acknowledging that the central bank has “markedly revised down” its forecasts for growth in the next two years, Lagarde said the ECB is “still expecting positive growth rates due to the domestic buffers against the loss of growth momentum.” Yet many believe the central bank will have to pivot to steeper pace of hikes later this year should the eurozone experience another energy-infused upside surprise in inflation.
  • Oil prices reversed losses and edged up on Monday as concerns of tight supply amid lower OPEC output, unrest in Libya and sanctions on Russia outweighed fears of a global recession. Output from the 10 members of Organization of the Petroleum Exporting Countries (OPEC) in June fell 100,000 barrels per day (bpd) to 28.52 million bpd, off their pledged increase of about 275,000 bpd, a Reuters survey showed. Declines in Nigeria and Libya offset increases by Saudi Arabia and other large producers, and Libya faces further supply disruption due to escalating political unrest, making the likelihood of OPEC meeting its newly increased production quotas even more unlikely, said ANZ Research analysts in a note. Libya's exports have dropped to between 365,000 bpd and 409,000 bpd, down about 865,000 bpd compared to normal levels, the National Oil Corp said last week. In a further hit to supply, a planned strike by Norwegian oil and gas workers this week could cut the country's oil and condensate output by 130,000 bpd. Fears of a global recession however are seen capping oil's price gains, said CMC Markets analyst Tina Teng. U.S. consumer sentiment dropped to a record low in June despite a marginal improvement in the outlook for inflation, as the Federal Reserve said its commitment to reining in inflation was "unconditional" and increasing concerns of interest rate hikes. Traders will be watching out for official prices for August from top oil exporter Saudi Arabia for signs of how tight the market is, with refiners bracing for another sharp increase close to the record set in May.Nine refining sources surveyed by Reuters expected Saudi's flagship Arab Light crude official selling price could rise by about $2.40 a barrel from the previous month.

 

 
Intraday RESISTANCE LEVELS
4th July 2022 R1 R2 R3
GOLD-XAU 1,820-1,840 1,851 1,859-1,878
Silver-XAG 20.45-20.70 21.20 21.80-22.05
Crude Oil 107.10-108.00 109.75 110.60-112.70
EURO/USD 1.0550-1.0630 1.0690 1.0770-1.0840
GBP/USD 1.2200-1.2310 1.2390 1.2450-1.2490
USD/JPY 136.00-137.00 137.38 138.50-139.00

Intraday SUPPORTS LEVELS
4th July 2022 S1 S2 S3
GOLD-XAU 1,807-1,798 1,787-1,779 1,765-1,759
Silver-XAG 19.80-19.50 19.05 18.40-17.80
Crude Oil 105.50-103.30 102.40 101.05-99.90
EURO/USD 1.0430-1.0390 1.0335 1.0290-1.0250
GBP/USD 1.2100-1.2050 1.2010 1.1960-1.1930
USD/JPY 135.20-134.60 133.50 132.90-132.00

Intra-Day Strategy (4th July 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$1812.05/oz and low of US$1784.39/oz. Gold down 0.208% at US$1810.99/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 1820-1861 keeping stop loss closing above 1861, targeting 1807-1798-1787 and 1779-1765-1758. Buy in between 1807-1761 with risk below 1761, targeting 1821-1840 and 1851-1859-1870.

 
Intraday Support Levels
S1     1,807-1,798
S2     1,787-1,779
S3     1,765-1,759
Intraday Resistance Levels
R1     1,820-1,840
R2     1,851
R3     1,859-1,878

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$20.29/oz and low of US$20.20/oz settled down by 1.997% at US$19.87/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 19.80-17.80, targeting 20.45-20.70-21.20 and 21.80-22.05-22.50 with stop loss should be place on the breakage below 19.50. Sell in between 20.45-23.75 with stop loss above 23.75; targeting 19.80-19.50-19.05 and 18.40-17.90.

 
Intraday  Support Levels
S1     19.80-19.50
S2     19.05
S3     18.40-17.80

Intraday  Resistance Levels
R1     20.45-20.70
R2     21.20
R3     21.80-22.05

TECHNICAL INDICATORS
Name   Value Action
14DRSI   29.164 Buy
20-DMA   21.06 Sell
50-DMA   21.86 Sell
100-DMA   22.59 Sell
200-DMA   23.21 Sell
STOCH(5,3)   18.853 Buy
MACD(12,26,9)   -0.502 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US107.61/bbl, intraday low of US$103.07/bbl and settled up by 1.934% to close at US$106.61/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 107.10-112.70 with stop loss at 112.70; targeting 105.50-103.30-102.40 and 101.05-99.90. Buy above 105.50-99.90 with risk daily closing below 99.90 and targeting 107.20-108.00 and 110.60-111.50-112.70

 
Intraday Support Levels
S1     105.50-103.30
S2     102.40
S3     101.05-99.90

Intraday Resistance Levels
R1     107.10-108.00
R2     109.75
R3     110.60-112.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   39.07 Sell
20-DMA   109.26 Buy
50-DMA   108.68 Buy
100-DMA   103.81 Buy
200-DMA   94.09 Buy
STOCH(5,3)   75.905 Sell
MACD(12,26,9)   2.097 Buy

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.0365/EUR, high of US$1.0484/EUR and settled the day down by 0.897% to close at US$1.0389/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 1.0550-1.0795, targeting 1.0390-1.0330 and 1.0290-1.0250 with stop-loss at daily closing above 1.0795. Buy above 1.0430-1.0250 with risk below 1.0210, targeting 1.0550-1.0630-1.0690 and 1.0770-1.0840.

 
Intraday Support Levels
S1     1.0430-1.0390
S2     1.0335
S3     1.0290-1.0250

Intraday  Resistance Levels
R1     1.0550-1.0630
R2     1.0690
R3     1.0770-1.0840

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.461 Buy
20-DMA   1.0517 Buy
50-DMA   1.0607 Buy
100-DMA   1.0772 Sell
200-DMA   1.1032 Sell
STOCH(5,3)   26.051 Buy
MACD(12,26,9)   -0.0058 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.1975/GBP, high of US$1.2176/GBP and settled the day down by 0.718% to close at US$1.2084/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 1.2100-1.2010 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     1.2100-1.2050
S2     1.2010
S3     1.1960-1.1930

Intraday Resistance Levels
R1     1.2200-1.2310
R2     1.2390
R3     1.2450-1.2490

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

38.705

Buy
20-DMA   1.2268 Sell
50-DMA   1.2450 Sell
100-DMA   1.2709 Sell
200-DMA   1.3012 Sell
STOCH(5,3)   17.199 Sell
MACD(12,26,9)   -0.008 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY134.73/USD and made an intraday high of JPY135.98/USD and settled the day down 0.348 at JPY135.24/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 136.00-139.70 with risk above 139.70 targeting 134.00 and 133.50-132.90-132.00. Long positions above 135.20-130.60 with targets of 135.20-136.00-137.00 and 137.90-138.50 with stop below 124.30

 
Intraday Support Levels
S1     135.20-134.60
S2     133.50
S3     132.90-132.00

INTRADAY RESISTANCE LEVELS
R1     136.00-137.00
R2     137.38
R3     138.50-139.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   64.958 Buy
20-DMA   134.01 Buy
50-DMA   130.82 Buy
100-DMA   126.69 Buy
200-DMA   121.59 Buy
STOCH(9,6)   64.035 Buy
MACD(12,26,9)   1.1710 Sell

AAFX TRADING
AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING