AAFX TRADING

Daily Market Lookup

  • The dollar was down on Thursday morning in Asia as the European Central Bank is poised to hike interest rates for the first time since 2011 and the key Russia gas pipeline is scheduled to reopen later in the day. The Bank of Japan kept its interest rate unchanged, even as it predicts more consumer inflation amid higher commodity prices worldwide. The euro held gains this week as investors expect the ECB might deliver a 50 basis-point rate hike. Also, the Nord Stream pipeline reopens on Thursday following a 10-day maintenance shutdown. Investors debated on whether ECB policymakers will deliver a previously signaled 25 basis-point increase or a half-point rise to curb runaway inflation. The central bank is also likely to unveil its new crisis management tool. "Italy's political uncertainty complicates the ECB plans to deliver details on its new anti-fragmentation tool, especially regarding the conditions for the tool to be triggered," and a lack of clarity is likely to drag on the euro, National Australia Bank currency strategist Rodrigo Catril wrote in a client note. At the same time, NAB expects a half-point hike and guidance for another half-point increase in September "with the Bank aiming to front-load rate hikes ahead of weaker conditions later in 2022 and into 2023, when room to move may be more limited," Catril said.
  • 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.
  • Gold was down on Thursday morning in Asia and fell to the lowest in nearly a year as investors expect interest rate hikes by major central banks to curb soaring inflation. The U.S. Federal Reserve is widely expected to raise interest rates by 75 basis points at its July 26-27 policy meeting. Across the Atlantic, the European Central Bank is set to raise interest rates for the first time since 2011 on Thursday, with a higher-than-expected move to contain runaway inflation. In Japan, the Bank of Japan kept its interest rate unchanged, even as it predicts more consumer inflation amid higher commodity prices worldwide. Also on investors' radar is the reopening of the Nord Stream pipeline following a 10-day maintenance shutdown.
  • Oil prices fell on Thursday for a second straight session, as demand concerns outweighed tight global supply after U.S. government data showed tepid gasoline demand during the peak summer driving season. Oil prices have been volatile as traders have had to square tighter global supply because of the loss of Russian barrels following the country's invasion of Ukraine, with recessionary worries that could weaken energy demand. U.S. gasoline inventories rose 3.5 million barrels last week, government data showed on Wednesday, far exceeding analysts' forecasts in a Reuters poll for a 71,000-barrel rise. Product supplied of gasoline - a proxy for demand - was about 8.5 million barrels per day, or about 7.6% lower than the same time a year ago, the data showed. ING's head of commodities research Warren Patterson said the U.S. inventory data was relatively bearish as gasoline stocks rose despite lower refinery runs over the week. Concerns over Libya's supplies have also eased as the National Oil Corp (NOC) said on Wednesday crude production had resumed at several oilfields, after lifting force majeure on oil exports last week. Still, one of Canada's major oil export arteries, the Keystone pipeline, was operating at reduced rates for a third day on Wednesday, operator TC Energy said in a statement, as repairs continued on a third-party power facility in South Dakota. Oil prices fell on Thursday, continuing a trend sparked by growing demand concerns after U.S. government data showed tepid gasoline demand despite tight global supply. Oil prices have been see-sawing as traders struggled with tighter global supply due to the loss of Russian barrels after the country's invasion of Ukraine. Questions over a recession also weakened energy demand. Furthermore, U.S. gasoline inventories rose 3.5 million barrels last week, government data showed on Wednesday. This goes beyond analysts' forecasts in a Reuters poll for a 71,000-barrel rise. Product supply of gasoline was about 8.5 million barrels per day, or about 7.6% lower than the same time a year ago, the data showed. It is generally regarded as a proxy for demand. In Libya, the National Oil Corp shared that crude production has resumed in several oilfields, after lifting force majeure on oil exports last week. But one of Canada's major oil export arteries, the Keystone pipeline, was operating at reduced rates for a third day on Wednesday, operator TC Energy (NYSE:TRP) stated. Repairs continued on a third-party power facility in South Dakota.

 

 
Intraday RESISTANCE LEVELS
21st July 2022 R1 R2 R3
GOLD-XAU 1,700-1,707 1,720 1,732-1,741
Silver-XAG 18.70-19.50 19.80 20.45-20.70
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 1.2010-1.2050 1.2100-1.2200 1.2245-1.2300
USD/JPY 138.50-138.90 139.40 140.10- 141.00

Intraday SUPPORTS LEVELS
21st July 2022 S1 S2 S3
GOLD-XAU 1,684-1,676 1,665 1,658-1,644
Silver-XAG 18.40-17.80 17.50 16.90-16.40
Crude Oil 98.00-96.90 96.00 94.90-94.00
EURO/USD 1.0190 1.0150 1.0010-0.9950
GBP/USD 1.1930-1.1870 1.1810 1.1760-1.1700
USD/JPY 137.90-137.40 137.00 136.30-135.25

Intra-Day Strategy (21st 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 Wednesday 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 1700-1787 keeping stop loss closing above 1787, targeting 1684-1676-1665 and 1658-1644. Buy in between 1684-1644 with risk below 1644, targeting 1700-1707-1720 and 1732-1741-1750.

 
Intraday Support Levels
S1     1,684-1,676
S2     1,665
S3     1,658-1,644
Intraday Resistance Levels
R1     1,700-1,707
R2     1,720
R3     1,732-1,741

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 Wednesday made its intraday high of US$18.90/oz and low of US$18.64/oz settled up by 0.331% at US$18.66/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     18.40-17.80
S2     17.50
S3     16.90-16.40

Intraday  Resistance Levels
R1     18.70-19.50
R2     19.80
R3     20.45-20.70

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 Thursday made an intra‐day high of US100.26/bbl, intraday low of US$97.72/bbl and settled down by 0.0332% to close at US$99.37/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 98.90-104.70 with stop loss at 104.70; targeting 98.00-96.90-96.00 and 94.30-93.20-92.30. Buy above 98.10-92.30 with risk daily closing below 92.00 and targeting 98.90-99.90-101.25 and 102.00-102.65-104.70.

 
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 Wednesday made an intraday low of US$1.0155/EUR, high of US$1.0272/EUR and settled the day down by 0.464% to close at US$1.0176/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 1.0190-1.0010 and 0.9950-0.9860 with stop-loss at daily closing above 1.0430. Buy above 1.0190-0.9800 with risk below 0.9800, targeting 1.0290-1.0335-1.0390 and 1.0430-1.0470.

 
Intraday Support Levels
S1     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 Wednesday made an intra‐day low of US$1.1952/GBP, high of US$1.2036/GBP and settled the day down 0.237% to close at US$1.1961/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 1.1930-1.1700 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     1.1930-1.1870
S2     1.1810
S3     1.1760-1.1700

Intraday Resistance Levels
R1     1.2010-1.2050
R2     1.2100-1.2200
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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