AAFX TRADING

Daily Market Lookup

  • The dollar was down on Monday morning in Asia as the euro gasped for gas. Investors’ expectations of aggressive interest rate hikes from the U.S. Federal Reserve also receded over strong U.S. core retail sales data. The Nord Stream 1 pipeline, the biggest pipeline carrying Russian natural gas to Germany, began its annual maintenance on July 11 due to the last 10 days. Markets are concerned that the shutdown may be extended because of the war in Ukraine. Loss of gas would hit Germany, the world’s fourth-largest economy. Investors also kept an eye on U.S. inflation and the possible recession brought by the monetary tightening. The United States Michigan 5-Year Inflation Expectations released on Friday fell to 2.8% for July from 3.1% in June. Fed officials signaled that they would stick to a 75-bp rate increase during their meeting on July 26-27 to bring down inflation. In Asia-Pacific, China reported 691 news COVID cases on Saturday, up from 547 the previous day, adding to markets’ worries about its economic recovery path. China’s central bank is going to meet on Wednesday while the Bank of Japan meets on Thursday. Elsewhere, the European Central Bank is expected to raise rates by 25 bps at its policy meeting later this week.
  • The dollar began the week nudging down from multi-year highs, with a hotter-than-forecast inflation reading in New Zealand lending modest support to the kiwi, though fears about Europe's gas supply put a cap on dollar selling. The greenback has soared this year thanks to a combination of rising U.S. interest rates and wobbling economies in Europe and China. It pushed above parity on the euro for the first time in almost 20 years last week, before easing back. The euro last bought $1.00955 and the yen, which has tumbled about 17% this year, steadied at 138.37 per dollar. Traders are holding their breath ahead of Thursday, when gas is supposed to resume flowing through the Nord Stream pipe from Russia to Germany after a shutdown for scheduled maintenance. The uncertainty is overshadowing a European Central Bank meeting, also due on Thursday, where policymakers are expected to begin Europe's hiking cycle with a 25 basis point (bp) increase. Adding to headwinds for the eurozone is a political crisis in Italy, after Prime Minister Mario Draghi tendered his resignation last week, following failure to receive support from coalition party the 5-Star Movement over his plan to combat soaring prices. Over in Asia, markets are keenly watching China's central bank meeting on Wednesday and the Bank of Japan's on Thursday. "The silver lining is that China does not currently face imminent or heightened inflationary pressures, which allows the policy makers to stick to its easing bias to support the recovery," said Peiqian Liu, China economist at NatWest Markets. Similarly, no changes are expected from the BOJ, which is expected to maintain its ultra-easy policies, meaning more pain for the beleaguered yen. The Federal Reserve meets later in July and is expected to lift the benchmark U.S. interest rate by 75 bps. Even though that is more conservative than the 100 bp hike markets had priced in at one point last week, it is still quite a stiff increase.
  • Gold was up on Monday morning in Asia over a pullback in the U.S. dollar as investors’ bets of a 100-basis-point interest rate hike from the U.S. Federal Reserve this month receded. The dollar, which normally moves inversely to gold, edged down on Monday morning as the Fed signaled that they would stick to a 75-bp rate increase during their meeting on July 26-27 to bring down inflation. Fed officials signaled that they would stick to a 75-bp rate increase during their meeting on July 26-27 to bring down inflation. The European Central Bank is expected to raise rates by 25 bps at its policy meeting later this week.
  • Oil prices extended gains on Monday, propped up by a weaker dollar and tight supplies that offset concerns about recession and the prospect of widespread COVID-19 lockdowns in China again reducing fuel demand. The U.S. dollar retreated from multi-year highs on Monday, supporting prices of commodities ranging from gold to oil. A weaker dollar makes dollar-denominated commodities more affordable for holders of other currencies. Last week, Brent and WTI posted their biggest weekly drops in about a month on fears of a recession that will hit oil demand. Mass COVID testing exercises continued in parts of China this week, raising oil demand concerns at the world's second-largest oil consumer. However, oil supplies remained tight, supporting prices. As expected, U.S. President Joe Biden's trip to Saudi Arabia failed to yield any pledge from the top OPEC producer to boost oil supply. Biden wants Gulf oil producers to step up output to help tame oil prices and drive down inflation. On Sunday, Amos Hochstein, a senior U.S. State Department adviser for energy security, said on CBS' Face the Nation that the trip would result in oil producers taking "a few more steps" in terms of supply though he did not say which country or countries would boost output. The next meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, together called OPEC+, on Aug. 3 will be closely watched as their existing output pact expires in September. Global markets are focused this week on the resumption of Russian gas flows to Europe via the Nord Stream 1 pipeline which is scheduled to end maintenance on July 21. Governments, markets and companies fear the shutdown may be extended because of the war in Ukraine. Loss of that gas would hit Germany, the world's fourth-largest economy, hard and heighten the threat of a recession. Separately, U.S. Treasury Secretary Janet Yellen said on Saturday she had productive meetings about a proposed price cap on Russian oil with a host of countries on the sidelines of a meeting of the finance chiefs of the Group of 20 major economies. Yellen raised the price cap idea during a virtual meeting on July 5 with Chinese Vice Premier Liu He, China's commerce ministry said last week. The ministry had said setting a cap on the Russian oil price is a "very complicated issue" and the precondition to solve the Ukraine crisis is to promote peace talks among relevant parties.

 

 
Intraday RESISTANCE LEVELS
18th July 2022 R1 R2 R3
GOLD-XAU 1,720-1,732 1,741 1,750-1,759
Silver-XAG 19.50-19.80 20.45 20.70-21.20
Crude Oil 94.00-94.65 96.00 96.90-98.00
EURO/USD 1.0190-1.0250 1.0290-1.0335 1.0390-1.0430
GBP/USD 1.1930-1.2010 1.2050 1.2100-1.2200
USD/JPY 138.50-138.90 139.40 139.40

Intraday SUPPORTS LEVELS
18th July 2022 S1 S2 S3
GOLD-XAU 1,707 1,700 1,684-1,678
Silver-XAG 18.70-18.40 17.80 17.50-16.90
Crude Oil 93.10-92.30 91.15 90.50-89.00
EURO/USD 1.0010 0.9950-0.9860 0.9800
GBP/USD 1.1810-1.1760 1.1700 1.1660-1.1600
USD/JPY 138.00-137.40 138.00-137.40 136.30-135.25

Intra-Day Strategy (18th 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$1716.54/oz and low of US$1699.00/oz. Gold down 0.127% at US$1707.55/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 a2lso 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 1720-1787 keeping stop loss closing above 1787, targeting 1707-1700 and 1684-1678. Buy in between 1709-1670 with risk below 1670, targeting 1750-1759-1779 and 1787-1798.

 
Intraday Support Levels
S1     1,707
S2     1,700
S3     1,684-1,678
Intraday Resistance Levels
R1     1,720-1,732
R2     1,741
R3     1,750-1,759

Technical Indicators

Name   Value Action
14DRSI  

24.622

Buy
20-DMA   1787.96 Sell
50-DMA  

1825.45

Sell
100-DMA   1845.78 Sell
200-DMA   1844.59 Sell
STOCH(5,3)   7.367 Sell
MACD(12,26,9)   -27.400 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$18.77/oz and low of US$18.18/oz settled up by 1.586% at US$18.18/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     18.70-18.40
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 Buy
MACD(12,26,9)   -0.642 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US96.01/bbl, intraday low of US$91.58/bbl and settled up by 0.595% to close at US$94.53/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 94.65-98.90 with stop loss at 98.90; targeting 94.30-93.20-92.30 and 91.15-90.50. Buy above 93.10-89.00 with risk daily closing below 89.00 and targeting 94.65-96.00-96.90 and 98.00-98.90-99.90

 
Intraday Support Levels
S1     93.10-92.30
S2     91.15
S3     90.50-89.00

Intraday Resistance Levels
R1     94.00-94.65
R2     96.00
R3     96.90-98.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   35.201 Sell
20-DMA   102.48 Buy
50-DMA   105.58 Buy
100-DMA   102.95 Buy
200-DMA   94.80 Buy
STOCH(5,3)   15.412 Sell
MACD(12,26,9)   -4.213 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.0006/EUR, high of US$1.1009/EUR and settled the day up by 0.726% to close at US$1.0087/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 1.0100-1.0430, targeting 1.0010-0.9950 and 0.9860-0.9800 with stop-loss at daily closing above 1.0430. Buy above 1.0010-0.9800 with risk below 0.9800, targeting 1.0100-1.0200-1.0250 and 1.0290-.0335-1.0390.

 
Intraday Support Levels
S1     1.0010
S2     0.9950-0.9860
S3     0.9800

Intraday  Resistance Levels
R1     1.0190-1.0250
R2     1.0290-1.0335
R3     1.0390-1.0430

TECHNICAL INDICATORS
Name   Value Action
14DRSI   25.410 Buy
20-DMA   1.0340 Buy
50-DMA   1.0506 Buy
100-DMA   1.0700 Sell
200-DMA   1.0979 Sell
STOCH(5,3)   12.057 Buy
MACD(12,26,9)   -0.0090 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.1803/GBP, high of US$1.1874/GBP and settled the day up 0.386% to close at US$1.1865/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 1.1850-1.1700 with target 1.1930-1.2010-1.2050 and 1.2100-1.2200-1.2310 with stop loss closing below 1.1700. Sell in between 1.1930-1.2230 with targets at 1.1850-1.1800 and 1.1760-1.1700 with stop loss should be 1.2630.

 
Intraday Support Levels
S1     1.1810-1.1760
S2     1.1700
S3     1.1660-1.1600

Intraday Resistance Levels
R1     1.1930-1.2010
R2     1.2050
R3     1.2100-1.2200

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

37.826

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 JPY138.38/USD and made an intraday high of JPY139.11/USD and settled the day down by 0.338% at JPY138.46/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 138.50-141.50 with risk above 141.50 targeting 138.00-137.38-136.50 and 135.20-134.60-134.00. Long positions above 138.00-130.60 with targets of 139.00-139.40-140.10 and 141.00-141.50 with stop below 124.30.

 
Intraday Support Levels
S1     138.00-137.40
S2     138.00-137.40
S3     136.30-135.25

INTRADAY RESISTANCE LEVELS
R1     138.50-138.90
R2     139.40
R3     139.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   68.258 Buy
20-DMA   135.37 Buy
50-DMA   132.45 Buy
100-DMA   128.25 Buy
200-DMA   122.85 Buy
STOCH(9,6)   85.083 Buy
MACD(12,26,9)   1.308 Sell

AAFX TRADING
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