AAFX TRADING

Daily Market Lookup

  • The U.S. dollar edged lower in early European trade Wednesday, but remained near a 20-year high as traders sought out this safe haven in the face of renewed recession fears, soaring gas prices, and political uncertainty in the U.K. Adding to the negative sentiment are fears of gas rationing in Europe as Russia threatens to cut supplies further. German and French year-ahead power prices are around record highs as regulators try to ensure enough gas is bought for storage as the winter approaches. German factory orders provided a rare piece of good news, rising by 0.1% in May from April, climbing for the first time in four months in May. Attention now turns to the release of Eurozone retail sales figures later in the session, with the key release expected to post a 0.4% monthly rise in May. GBP/USD fell 0.3% to 1.1923, near to a two-year low with Prime Minister Boris Johnson under severe pressure after Tuesday’s resignation of two top government ministers, both saying he was not fit to govern. The release of the minutes from the last Federal Reserve meeting will be of particular interest later in the session, with this get-together resulting in the U.S. central bank raising interest rates by 75 basis points, its largest hike since 1994. Traders are bracing for another 75-basis-point rate hike at the end of the month, with inflation remaining at highly elevated levels, and this has resulted in the yield of the 2-year Treasury climbing above that of the benchmark 10-year Treasury. This is usually taken as a sign of an upcoming recession.
  • The dollar stood tall on Wednesday, holding at a 20-year peak against the euro and multi-month highs against other major peers as higher gas prices and political uncertainty renewed recession fears and sent investors scrambling to the safe-haven currency. Charu Chanana, market strategist at Saxo Capital Markets, attributed the euro drop to dollar strength and "renewed fears of gas shortages in the Eurozone as Russia threatens to cut supplies further". German and French year-ahead power prices are around record highs as regulators try to ensure enough gas is bought for storage and supervise the drawing up of priority lists for access to gas. Chanana added that the euro's drop had renewed the market's focus on parity with the USD, with the European Central Bank set to remain behind the Federal Reserve in tightening policy and given greater recession risks in the euro zone. In the latest recession warning, yields on two-year Treasuries again rose above those of 10-year Treasuries. Yield curve inversion has in the past preceded a U.S. recession. The euro's drop against the pound was much more muted however, as sterling was hit by fresh political turmoil. Prime Minister Boris Johnson's premiership tottered on the brink after the resignations of two senior UK cabinet ministers - finance minister Rishi Sunak and health secretary Sajid Javid - over his leadership. Bitcoin managed to sit out the turmoil, still hovering around the $20,000 level from which it has been unable to break significantly in either direction for the past month.
  • Gold hovered near a fresh seven-month low on Wednesday, with the dollar perched at a two-decade peak, as investors continued to snub bullion and look to the greenback for safety amid growing anguish over a worsening global economic outlook. The twin effect of a stronger U.S. dollar because of higher rates, and higher rates themselves having a direct impact on bullion, are weighing on the outlook for gold, McCarthy said. Asian stocks fell and the dollar dominated against the euro on Wednesday as investors' fears deepened that the continent is leading the world into recession. Meanwhile, the U.S. Federal Reserve will release minutes from its June policy meeting later in the day, which could give investors a clearer picture on the roadmap for interest rates. More major central banks raised rates in June than in any month for at least two decades, Reuters calculations showed, and with inflation at multi-decade highs, policy-tightening is unlikely to let up this year.
  • Oil prices rose as much as nearly 3% on Wednesday before paring some gains as investors piled back into the market after a heavy rout in the previous session, with supply concerns returning to the fore even as worries about a global recession linger The dollar strengthened to a 20-year peak against the euro and multi-month highs against other major peers as higher gas prices and political uncertainty renewed recession fears, sending investors scrambling to the safe-haven currency. A stronger greenback usually makes oil more expensive in other currencies, which could curb demand. Meanwhile, Russia's former president Dmitry Medvedev warned that a reported proposal from Japan to cap the price of Russian oil at around half its current level would lead to significantly less oil in the market and push prices above $300-$400 a barrel. On the other hand, the Norwegian government on Tuesday intervened to end a strike in the petroleum sector that had cut oil and gas output, a union leader and the labour ministry said, ending a stalemate that could have worsened Europe's energy crunch. By Saturday, the strike would have cut daily gas exports by 1,117,000 barrels of oil equivalent (boe), or 56% of daily gas exports, while 341,000 of barrels of oil would have been lost, the Norwegian Oil and Gas (NOG) employers' lobby said. Worries about a recession, however, have continued to weigh on markets. By some early estimates, the world's largest economy may have shrunk in the three months from April through June. That would be the second straight quarter of contraction, considered the definition of a technical recession. More G10 central banks raised interest rates in June than in any month for at least two decades, Reuters calculations showed. With inflation at multi-decade highs, the pace of policy-tightening is not expected to let up in the second half of 2022. Renewed concerns of COVID-19 lockdowns across China could also cap oil price gains. The world's largest crude importer is fighting COVID flare-ups across the country with mass testing and new restrictions. China has reported coronavirus cases in the cities of Shanghai, Beijing, eastern Anhui and Jiangsu provinces, and the northwestern city of Xian.

 

 
Intraday RESISTANCE LEVELS
6th July 2022 R1 R2 R3
GOLD-XAU 1,779-1,787 1,798 1,807-1,820
Silver-XAG 19.50-19.80 20.45 20.70-21.20
Crude Oil 99.90-101.05 102.40 103.30--105.50
EURO/USD 1.0335-1.0390 1.0430-1.0550 1.0630-1.0690
GBP/USD 1.2010--1.2050 1.2100 1.2200-1.2310
USD/JPY 136.50-137.38 138.50 139.00-139.50

Intraday SUPPORTS LEVELS
6th July 2022 S1 S2 S3
GOLD-XAU 1,765-1,759 1,750 1,741-1,735
Silver-XAG 17.50-16.90 17.80 17.50-16.90
Crude Oil 98.90-98.00 96.90 96.00-94.70
EURO/USD 1.0290-1.0250 1.0200 1.0150-1.010
GBP/USD 1.1960-1.1930 1.1850 1.1800-1.1760
USD/JPY 135.20-134.60 133.50 132.90-132.00

Intra-Day Strategy (6th 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 Tuesday made its intraday high of US$1812.01/oz and low of US$1763.86/oz. Gold down 2.375% at US$1764.47/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 1779-1820 keeping stop loss closing above 1820, targeting 1765-1758-1750 and 1741-1735. Buy in between 1761-1735 with risk below 1735, targeting 1779-1787-1798 and 1807-1821-1840.

 
Intraday Support Levels
S1     1,765-1,759
S2     1,750
S3     1,741-1,735
Intraday Resistance Levels
R1     1,779-1,787
R2     1,798
R3     1,807-1,820

Technical Indicators

Name   Value Action
14DRSI  

31.655

Buy
20-DMA   1816.85 Sell
50-DMA  

1842.23

Sell
100-DMA   1855.55 Sell
200-DMA   1849.33 Sell
STOCH(5,3)   16.831 Sell
MACD(12,26,9)   -17.400 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$20.19/oz and low of US$19.76/oz settled up by 3.709% at US$19.20/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 19.05-16.90, targeting 19.50-19.80-20.45 and 20.70-21.20- 21.80 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     17.50-16.90
S2     17.80
S3     17.50-16.90

Intraday  Resistance Levels
R1     19.50-19.80
R2     20.45
R3     20.70-21.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   25.130 Buy
20-DMA   20.72 Sell
50-DMA   21.65 Sell
100-DMA   22.45 Sell
200-DMA   23.13 Sell
STOCH(5,3)   16.615 Sell
MACD(12,26,9)   -0.642 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US109.50/bbl, intraday low of US$95.69/bbl and settled down by 9.97% to close at US$97.76/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 99.90-105.50 with stop loss at 105.50; targeting 98.90-98.00-96.90 and 96.00-94.70. Buy above 99.90-105.50 with risk daily closing below 105.50 and targeting 98.90-98.00-96.90 and 96.00-94.70.

 
Intraday Support Levels
S1     98.90-98.00
S2     96.90
S3     96.00-94.70

Intraday Resistance Levels
R1     99.90-101.05
R2     102.40
R3     103.30--105.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   37.316 Sell
20-DMA   107.49 Buy
50-DMA   108.00 Buy
100-DMA   103.75 Buy
200-DMA   94.68 Buy
STOCH(5,3)   27.905 Sell
MACD(12,26,9)   -2.509 Buy

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.0234/EUR, high of US$1.0448/EUR and settled the day down by 1.371% to close at US$1.0267/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 1.0335-1.0795, targeting 1.0290-1.0250-1.0200 and 1.0150-1.1010 with stop-loss at daily closing above 1.0795. Buy above 1.0290-1.0101 with risk below 1.0210, targeting 1.0335-1.0390-1.0550 and 1.0630-1.0690-1.0770.

 
Intraday Support Levels
S1     1.0290-1.0250
S2     1.0200
S3     1.0150-1.010

Intraday  Resistance Levels
R1     1.0335-1.0390
R2     1.0430-1.0550
R3     1.0630-1.0690

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.461 Buy
20-DMA   1.0517 Buy
50-DMA   1.0607 Buy
100-DMA   1.0772 Buy
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 Tuesday made an intra‐day low of US$1.898/GBP, high of US$1.2124/GBP and settled the day up by 0.0504% to close at US$1.1928/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     1.1960-1.1930
S2     1.1850
S3     1.1800-1.1760

Intraday Resistance Levels
R1     1.2010--1.2050
R2     1.2100
R3     1.2200-1.2310

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 Tuesday made intra‐day low of JPY135.44/USD and made an intraday high of JPY136.35/USD and settled the day up 0.123% at JPY135.61/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 135.20-134.60-134.00 and 133.50-132.90-132.00. Long positions above 135.20-130.60 with targets of 136.50-137.40 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     136.50-137.38
R2     138.50
R3     139.00-139.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.842 Buy
20-DMA   134.62 Buy
50-DMA   131.69 Buy
100-DMA   127.54 Buy
200-DMA   122.27 Buy
STOCH(9,6)   35.083 Buy
MACD(12,26,9)   1.2770 Sell

AAFX TRADING
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