AAFX TRADING

Daily Market Lookup

  • The U.S. dollar edged lower in early European trade Monday, but remained in demand as a safe haven due to worries about slowing global growth while a U.S. holiday is likely to limit volatility. The Eurozone, the U.K., Japan, South Korea, Australia, and Canada as well as the U.S. are likely to fall into recession over the next 12 months, analysts at Nomura said in a note, as central banks looking to restore their inflation-control credibility are likely to err on the side of tightening policy too much. This view has been supported by recent economic data, with U.S. consumer spending, for example, growing far less than expected in May while the Atlanta Federal Reserve's much-watched GDPNow forecast slid to an annualized minus 2.1% for the second quarter. Despite this, Fed Chair Jerome Powell reiterated last week the Fed’s resolution to tame red hot inflation. Investors will be closely watching Friday’s nonfarm payrolls report for how the labor market is performing, given the Fed’s inflation/employment mandate, while Wednesday’s minutes from the central bank’s June meeting will provide some insight into how policymakers see the future path of interest rates. The market has priced in a hike of 75 basis points from the Fed this month after the U.S. central bank delivered such an increase in June, its largest hike since 1994. EUR/USD edged 0.1% higher to 1.0434, only marginally above May's five-year low of 1.0349 and not helped by Germany reporting its first monthly trade deficit since 1991 after exports unexpectedly fell in May. The deficit of 1 billion euros ($1 billion) suggests Germany’s export-driven economy is feeling the full impact of Russia’s invasion of Ukraine and China’s COVID-related lockdowns and the associated damage to international supply chains. A survey by Bloomberg detailed that all but one of 26 economists expect the Reserve Bank of Australia to raise its cash target rate by half a percentage point on Tuesday to 1.35%, to a level not seen since May 2019.
  • Gold prices rose marginally on Tuesday, buoyed by economic growth concerns, although an elevated dollar and impending interest rate hikes kept gains in check. Gold is seen as a safe store of value during times of economic crises, like a recession. Bullion has been pressured in the past few months by major central banks around the world moving to hike interest rates in their attempt to tame runaway inflation. The general move lower by U.S. yields seems to be delaying the inevitable correction lower in prices of non-yielding gold, Halley said. Resuming trade after a weekend extended by the Independence Day holiday, benchmark U.S. 10-year Treasury yields recovered slightly from Friday's one-month low, but remained below 3%. The dollar hovered near a two-decade peak, and continued to chip away at demand for greenback-priced gold among buyers holding other currencies. Meanwhile, Asian shares inched up as positive economic data and hints of easing Sino-U.S. tensions offered some respite to the recent sell-offs, though persistent fears about a global recession and sky-high inflation kept most buyers at bay.
  • Oil was up on Tuesday morning in Asia over supply tightness concerns as a strike in Norway threatened to disrupt oil and gas output. On Tuesday, Norwegian offshore workers began a strike that will reduce oil and gas output, according to Reuters. The strike is expected to reduce oil and gas output by 89,000 barrels of oil equivalent per day (boepd). Oil production will be cut by 130,000 barrels per day from Wednesday, accounting for around 6.5% of Norway’s production, according to Reuters. Investors are also assessing the outlook for demand amid tightening monetary policies from major central banks. Investors now are also monitoring Australia’s interest-rate decision, which is due later in the day. The central bank is expected to deliver a back-to-back half-percentage point interest rate hike. Investors now await U.S. crude supply data from the American Petroleum Institute, due later in the day. Brent oil prices dipped on Tuesday, reversing earlier gains of $1, as concerns of a possible global recession curtailing fuel demand outweighed supply disruption fears, highlighted by a potential production cut in Norway. There was no settlement for WTI on Monday because of the Independence Day public holiday in the United States. Investors are becoming more concerned about demand amid a broad tightening in global financial conditions as the U.S. Federal Reserve fights rampant inflation with rapid interest rate increases. Australia's central bank on Tuesday raised interest rates for a third month and flagged more ahead as it struggles to contain surging inflation even at the risk of triggering an economic downturn. In South Korea, inflation in June hit a near 24-year high, adding to concerns of slowing economic growth and oil demand. Still, oil prices have found support from supply concerns stemming from Western sanctions on shipments from Russia over the Ukraine conflict, worries about the ability of major Middle Eastern producers to increase output and now labor disputes in Norway. On Tuesday, Norwegian offshore workers began a strike that will reduce oil and gas output, the union leading the industrial action told Reuters. The strike is expected to reduce oil and gas output by 89,000 barrels of oil equivalent per day (boepd), of which gas output makes up 27,500 boepd, Norwegian producer Equinor has said. Oil output will be cut by as much as 130,000 barrels per day from Wednesday, the country's oil and gas association forecast on Sunday. That would equal about 6.5% of Norway's production, according to a Reuters calculation. Warren Patterson, head of Commodity Strategy from ING, wrote in a note that "While there are demand concerns given the gloomier macro outlook, the market is still expected to be tight for the remainder of the year".

 

 
Intraday RESISTANCE LEVELS
5th 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 108.00-109.75 110.60 112.70-113.50
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 136.50-137.38 138.50 139.00-139.50

Intraday SUPPORTS LEVELS
5th 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 107.10-105.50 103.30-102.40 101.05-99.90
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 136.00-135.20 134.60-133.50 132.90-132.00

Intra-Day Strategy (5th 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 Monday made its intraday high of US$1814.17/oz and low of US$1803.92/oz. Gold down 0.123% at US$1807.34/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 Monday made its intraday high of US$19.97/oz and low of US$19.76/oz settled up by 0.171% at US$19.90/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 Monday made an intra‐day high of US109.01/bbl, intraday low of US$103.07/bbl and settled up by 1.934% to close at US$108.62/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     107.10-105.50
S2     103.30-102.40
S3     101.05-99.90

Intraday Resistance Levels
R1     108.00-109.75
R2     110.60
R3     112.70-113.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.386 Sell
20-DMA   109.35 Buy
50-DMA   108.77 Buy
100-DMA   104.05 Buy
200-DMA   94.73 Buy
STOCH(5,3)   49.905 Sell
MACD(12,26,9)   -1.229 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.0409/EUR, high of US$1.0462/EUR and settled the day down by 0.035% to close at US$1.0409/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 Monday made an intra‐day low of US$1.2084/GBP, high of US$1.2164/GBP and settled the day up by 0.0504% to close at US$1.2102/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 Monday made intra‐day low of JPY134.77/USD and made an intraday high of JPY135.77/USD and settled the day up 0.034% at JPY135.33/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 136.00-130.60 with targets of 135.20-136.00-137.00 and 137.90-138.50 with stop below 124.30.

 
Intraday Support Levels
S1     136.00-135.20
S2     134.60-133.50
S3     132.90-132.00

INTRADAY RESISTANCE LEVELS
R1     136.50-137.38
R2     138.50
R3     139.00-139.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   62.201 Buy
20-DMA   134.57 Buy
50-DMA   131.55 Buy
100-DMA   127.39 Buy
200-DMA   122.15 Buy
STOCH(9,6)   39.220 Buy
MACD(12,26,9)   1.3968 Sell

AAFX TRADING
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