AAFX TRADING

Daily Market Lookup

  • The dollar rebounded strongly on Friday, but remained on track for its biggest weekly loss since late May after weak U.S. economic data saw some paring of bets for the size of an expected Federal Reserve interest rate increase next week. The euro retreated further from a more-than-two-week high reached on Thursday, when the European Central Bank raised borrowing costs in its first rate hike since 2011, but kept the terminal rate unchanged and provided few specifics of a new tool aimed at taming peripheral nation bond yields. The dollar index - which measures the greenback against six major peers, with the euro the most heavily weighted - jumped 0.35% to 106.98, following a 0.36% slide on Thursday. For the week, it remains down 0.95%, the biggest decline since May 29 and its first losing week in four. Europe's shared currency dropped 0.44% to $1.0187, retreating further from Thursday's knee-jerk peak of $1.0279 following a larger-than-telegraphed half-point hike from the ECB. While the new bond purchase programme, called the Transmission Protection Instrument, would ostensibly be triggered by the selloff in Italy's debt amid the collapse of the government there, sources told Reuters the ECB didn't expect to use it imminently. The dollar came under additional pressure overnight, with U.S. Treasury yields also retreating, after data showed a slump in factory activity and a rise in applications for unemployment benefits, signs that the economy is already feeling the effects of aggressive Fed policy tightening, potentially leaving it with less to do in future. Japan's currency, which is particularly sensitive to changes in U.S. yields, headed for its first winning week since late May, although the dollar's rebound on Friday tempered those gains.
  • The euro rose against the U.S. dollar in a choppy session on Thursday, after the European Central Bank (ECB) delivered a 50 basis points rate hike to tame inflation in its first rate increase since 2011. The ECB raised its benchmark deposit rate to 0%, breaking its own guidance for a 25 basis points move as it joined global peers in jacking up borrowing costs. The euro's initial rally, however, faltered after ECB President Christine Lagarde said the bank was accelerating its exit from negative interest rates but not changing the ultimate point of arrival. ECB policymakers also agreed to provide extra help for the 19-country currency bloc's more indebted nations - among them Italy - with a new bond purchase scheme intended to cap the rise in their borrowing costs and so limit financial fragmentation. The euro's rally is likely to be short-lived, however, given mounting recession risks for the economic bloc, said Michael Brown, head of market intelligence at Caxton in London. The common currency, which slipped to parity with the dollar last week for the first time since 2002, has recovered ground since then, on expectations of a hawkish ECB and a Reuters report the Nord Stream 1 gas pipeline would reopen on time following 10 days of maintenance. The link's operator said flows had restarted on Thursday and Germany's network regulator indicated they were back at the pre-maintenance level of 40% capacity. FX traders have also been watching closely developments in Italy, as Prime Minister Mario Draghi resigned on Thursday after his national unity government fell apart, setting the country on course for an early election and hitting financial markets Meanwhile, the U.S. dollar was 0.4% lower against the Japanese yen at 137.77 yen, after the Bank of Japan stuck as expected to its ultra-easy policy settings, continuing to buck the global monetary tightening trend even as it raised its inflation forecast.
  • The British pound was down 0.04% against the greenback at $1.1964 with traders watching the race to replace Boris Johnson as British prime minister, with former finance minister Rishi Sunak and foreign secretary Liz Truss making it through to the last round of the contest to become Conservative Party leader.
  • Gold was down on Friday morning in Asia as investors are concerned about interest rate hikes by major central banks to curb inflation. The European Central Bank hiked interest rates by 50 basis points on Thursday to contain 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. The U.S. economy is slowing as data on Thursday showed the U.S. weekly initial jobless claims rose to a fresh eight-month high and factory activity for July slumped.
  • Oil was up on Friday, a change after sliding in the previous sessions from weakened demand in the U.S. and a rise in supplies from Libya. Data showed that U.S. gasoline demand had dropped nearly 8% from a year earlier in the midst of the peak summer driving season. Drivers were deterred by record prices and this led to the WTI taking a hit. But in contrast, strong demand in Asia boosted the Brent benchmark, leading to its first weekly gain in six weeks.
  • Despite higher prices, Indian demand for gasoline and distillate fuels rose to record highs in June. The total refined product consumption ran at 18% more than a year ago and Indian refineries operating near their busiest levels ever, RBC analysts said. However, the restart of output at several oil fields in Libya this week capped Brent's gains. Meanwhile, the European Central Bank (ECB) raised rates more than expected on Thursday looking to rein in inflation. ECB President Christine Lagarde cautioned that inflation risks had become higher, as the Ukraine war was likely to drag on and energy prices are to stay high for longer.

 

 
Intraday RESISTANCE LEVELS
22nd July 2022 R1 R2 R3
GOLD-XAU 1,720-1,732 1,741 1,746-1,760
Silver-XAG 18.90-19.50 19.80 20.45-20.70
Crude Oil 98.00-99.90 101.25-102.00 102.65-104.70
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
22nd July 2022 S1 S2 S3
GOLD-XAU 1,707-1,700 1,684-1,676 1,665
Silver-XAG 18.60-17.80 17.50 16.90-16.40
Crude Oil 96.90-96.00 94.90 94.00-92.35
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 (22nd 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 Thursday made its intraday high of US$1720.13/oz and low of US$1680.86/oz. Gold up 1.279% at US$1718.19/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     1,707-1,700
S2     1,684-1,676
S3    
Intraday Resistance Levels
R1     1,720-1,732
R2     1,741
R3     1,746-1,760

Technical Indicators

Name   Value Action
14DRSI  

33.708

Buy
20-DMA   1746.30 Sell
50-DMA  

1794.58

Sell
100-DMA   1826.12 Sell
200-DMA   1834. Sell
STOCH(5,3)   7.367 Sell
MACD(12,26,9)   -27.400 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$18.87/oz and low of US$18.23/oz settled up by 0.953% at US$18.84/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     18.60-17.80
S2     17.50
S3     16.90-16.40

Intraday  Resistance Levels
R1     18.90-19.50
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 US99.33/bbl, intraday low of US$97.72/bbl and settled down by 0.0332% to close at US$96.02/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 98.00-104.70 with stop loss at 104.70; targeting 98.00-96.90-96.00 and 94.30-93.20-92.30. Buy above 96.90-92.30 with risk daily closing below 92.00 and targeting 98.00-98.90-99.90 and 101.25-102.00-102.65.

 
Intraday Support Levels
S1     96.90-96.00
S2     94.90
S3     94.00-92.35

Intraday Resistance Levels
R1     98.00-99.90
R2     101.25-102.00
R3     102.65-104.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.757 Sell
20-DMA   100.31 Buy
50-DMA   103.89 Buy
100-DMA   102.35 Buy
200-DMA   94.96 Buy
STOCH(5,3)   67.76 Sell
MACD(12,26,9)   -3.175 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.0155/EUR, high of US$1.0277/EUR and settled the day down by 0.507% to close at US$1.0228/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 Thursday made an intra‐day low of US$1.1889/GBP, high of US$1.2003/GBP and settled the day up 0.155% to close at US$1.1979/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 Thursday made intra‐day low of JPY137.29/USD and made an intraday high of JPY138.87/USD and settled the day up by 0.566% at JPY137.34/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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