AAFX TRADING

Daily Market Lookup

  • The U.S. dollar edged lower in early European trade Wednesday, with the euro seeing some demand ahead of this week’s important European Central Bank meeting. Greater risk appetite, as shown by stock market gains, has seen the dollar head lower this week, with this weakness coinciding with reduced expectations of a hefty 100-basis-point rate hike at next week's Federal Reserve policy review after comments from two of the most hawkish FOMC members – James Bullard and Chris Waller – that their base case was still a 75 basis point move. On the flip side, the euro has bounced after briefly breaking parity with the dollar for the first time in two decades last week. Traders are focusing on Thursday’s European Central Bank meeting, where Reuters reported that the policymakers are considering raising interest rates by a larger-than-expected 50 basis points after signaling a 25 basis point increase in June. Helping the euro’s tone have been Reuters reports that Russia is expected to resume gas flows to Germany via the Nord Stream 1 pipeline on time on Thursday after the completion of scheduled maintenance, reducing fears of an energy crisis on the continent. Bank of England Governor Andrew Bailey said on Tuesday that a 50-basis-point rate hike will be "among the choices on the table" at the central bank's next meeting. The bank has already raised borrowing costs five times since December.
  • The U.S. dollar retreated further on Wednesday as the euro extended its overnight bounce on relief Europe might avoid the worst fears concerning energy shortages, and on the chance the European Central Bank may deliver a more aggressive rate hike. Russian gas flows via the Nord Stream 1 pipeline are seen restarting on time on Thursday after the completion of scheduled maintenance, Reuters reported on Tuesday. Aiding sentiment was news that the ECB is considering raising interest rates by a larger-than-expected 50 basis points at their meeting on Thursday. The euro has lost about 2.3% since the beginning of July, and broke parity with the dollar for the first time in two decades last week following a red-hot U.S. inflation print and fears about a sharp economic downturn in the eurozone. Other major currencies similarly rallied on the back of the weakening greenback, and as central banks around the world become more hawkish in their efforts to tame soaring inflation. The U.S. dollar index measure against a basket of key currencies was down 0.14% to 106.52, well off its two-decade peak of 109.29 last week. The U.S. currency's retreat has also coincided with reduced expectations of a supersized 100-basis-point rate hike at next week's Federal Reserve policy review Ahead of the Fed's meeting next week, markets are pricing in a 23.2% chance of a 100 bp rate hike., with expectations of the jumbo rate increase easing after policymakers were quick to pour cold water on it. Minutes of the Reserve Bank of Australia's (RBA) July policy meeting out the day earlier showed that the central bank sees a need for more policy tightening to curb inflation. Earlier on Wednesday, RBA Governor Philip Lowe also suggested that rates could at least double from current low levels.
  • Gold was down Wednesday morning in Asia, continuing along a downward trend and moving inversely to rising interest rates. The dollar weakened as expectations grew that the U.S. Federal Reserve might back off from raising rates by a full percentage point when it meets next week and, instead, stick with a raise of 75 basis points In turn, the European Central Bank may now be considering a 50-basis-point hike to its rates on Thursday, double what had been priced in, according to a Reuters report. That expected hike helped push the euro up on its largest one-day gain in a month. Also helping keep gold down was a rally in shares in the U.S. on Tuesday after strong earnings reports helped Wall Street higher Reports that a deal could be near between Russia and Ukraine to end a blockade on grain exports and that the Nord Stream 1 gas pipeline out of Russia could restart this week as scheduled helped give markets a boost.
  • Oil prices slumped more than $1 a barrel on Wednesday, pressured by global central bank efforts to tame inflation and ahead of expected builds in U.S. crude inventories as product demand weakens. Oil prices whipsawed in the previous session, caught in a tug-of-war between supply fears due to Western sanctions on Russia and pressures on indications from central bankers that they will raise interest rates to combat inflation. Both contracts settled about 1% higher on Tuesday on tight supplies globally which have also kept the prompt Brent intermonth spreads in wide backwardation at about $4.40 a barrel. Front-month prices are higher than those in future months in a backwardated market, indicating tight supplies. On Friday, open interest in New York Mercantile Exchange futures fell to their lowest since September 2015 as investors cut risky assets like commodities, worried that the Federal Reserve will keep raising U.S. interest rates. "They have changed from being completely exposed to the downside to exploring it via options, tending towards buying calls, call spreads, and selling puts." In the United States, crude stocks rose by about 1.9 million barrels for the week ended July 15, according to market sources citing American Petroleum Institute figures on Tuesday. That was close to the forecast for a rise of 1.4 million barrels in a Reuters poll. Official weekly crude and fuel inventory data from the U.S. Energy Information Administration (EIA) is expected on Wednesday at 1530 GMT and traders are watching out for implied demand.

 

 
Intraday RESISTANCE LEVELS
20th 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 99.90-101.25 102.00 102.65-104.70
EURO/USD 1.0290-1.0335 1.0390 1.0430-1.0470
GBP/USD 1.2050-1.2100 1.2200 1.2245-1.2300
USD/JPY 138.50-138.90 139.40 140.10- 141.00

Intraday SUPPORTS LEVELS
20th 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 98.00-96.90 96.00 94.90-94.00
EURO/USD 1.0250-1.0190 1.0150 1.0010-0.9950
GBP/USD 1.2010-1.1930 1.1810 1.1760-1.1700
USD/JPY 137.90-137.40 137.00 136.30-135.25

Intra-Day Strategy (20th 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$1718.31/oz and low of US$1705.30/oz. Gold up 0.142% at US$1711.55/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 Tuesday made its intraday high of US$18.90/oz and low of US$18.63/oz settled up by 0.016% at US$18.74/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 Wednesday made an intra‐day high of US100.66/bbl, intraday low of US$96.23/bbl and settled up by 1.690% to close at US$100.11/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     98.00-96.90
S2     96.00
S3     94.90-94.00

Intraday Resistance Levels
R1     99.90-101.25
R2     102.00
R3     102.65-104.70

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 Tuesday made an intraday low of US$1.0118/EUR, high of US$1.0268/EUR and settled the day up by 0.790% to close at US$1.0224/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 1.0290-1.0430, targeting 1.0250-1.0190-1.0010 and 0.9950-0.9860 with stop-loss at daily closing above 1.0430. Buy above 1.0250-0.9800 with risk below 0.9800, targeting 1.0290-1.0335-1.0390 and 1.0430-1.0470.

 
Intraday Support Levels
S1     1.0250-1.0190
S2     1.0150
S3     1.0010-0.9950

Intraday  Resistance Levels
R1     1.0290-1.0335
R2     1.0390
R3     1.0430-1.0470

TECHNICAL INDICATORS
Name   Value Action
14DRSI   46.993 Buy
20-DMA   1.0253 Sell
50-DMA   1.0428 Sell
100-DMA   1.0636 Sell
200-DMA   1.0930 Sell
STOCH(5,3)   87.589 Buy
MACD(12,26,9)   -0.0090 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.1924/GBP, high of US$1.1204/GBP and settled the day up 0.375% to close at US$1.1991/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 1.2010-1.1700 with target 1.2050-1.2100-1.2200 and 1.2245-1.2310 with stop loss closing below 1.1700. Sell in between 1.12050-1.2230 with targets at 1.1850-1.1800 and 1.1760-1.1700 with stop loss should be 1.2630.

 
Intraday Support Levels
S1     1.2010-1.1930
S2     1.1810
S3     1.1760-1.1700

Intraday Resistance Levels
R1     1.2050-1.2100
R2     1.2200
R3     1.2245-1.2300

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

45.845

Buy
20-DMA   1.2030 Sell
50-DMA   1.2244 Sell
100-DMA   1.2533 Sell
200-DMA   1.2882 Sell
STOCH(5,3)   80.782 Buy
MACD(12,26,9)   -0.008 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY137.37/USD and made an intraday high of JPY138.38/USD and settled the day up by % at JPY138.17/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 137.50-130.60 with targets of 139.00-139.40-140.10 and 141.00-141.50 with stop below 124.30.

 
Intraday Support Levels
S1     137.90-137.40
S2     137.00
S3     136.30-135.25

INTRADAY RESISTANCE LEVELS
R1     138.50-138.90
R2     139.40
R3     140.10- 141.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   63.771 Buy
20-DMA   136.42 Buy
50-DMA   133.46 Buy
100-DMA   129.18 Buy
200-DMA   123.59 Buy
STOCH(9,6)   60.033 Buy
MACD(12,26,9)   1.389 Sell

AAFX TRADING
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