AAFX TRADING

Daily Market Lookup

  • The dollar dropped to a three-week low versus the yen on Thursday after Federal Reserve Chair Jerome Powell assuaged investors' worries about continued aggressive monetary tightening. The U.S. currency sank as low as 135.105 yen, its weakest since July 6 after the Fed raised the benchmark rate by an as-expected 75 basis points to bring it closer to neutral, while noting that although the labour market remains strong, other economic indicators have softened. The dollar-yen is highly sensitive to shifts in U.S. yields, which slid after Powell said that based on the strength of employment, he didn't believe the economy was in recession, and that a recession was not necessarily required to tame super-heated inflation. It remained about 20 basis points above the 10-year yield though, widely seen as signalling a looming downturn. Whether the U.S. economy meets the definition of a technical recession by posting two straight quarters of contraction will be known later on Thursday with the release of GDP figures, which will be the market's next major focus. The dollar lost ground on Thursday as investors digested an as-expected 75 basis point interest rate rise by the Federal Reserve and eyed comments about potential future hikes. The moves come after the Fed increased its policy target interest rate on Wednesday by three-quarters of a percent for the second month in a row. Traders focused in particular on statements from Fed Chair Jerome Powell, who dropped guidance on the size of the next rate rise. That, in turn, heightened the possibility that the central bank could soon slow the pace of hikes Also factoring into investors' minds is the latest reading of U.S. gross domestic product for the second quarter, which is due out later today. Another negative reading would meet the technical definition of a recession, though the United States chooses to define such an event differently. Meanwhile, the euro is marginally higher against the dollar, up 0.04% to $1.0206, ahead of preliminary German inflation data scheduled for release later on Thursday. Traders will be on the lookout for signs that price pressures in Europe's largest economy - and the broader Eurozone - are starting to ease.
  • Gold was up on Thursday morning in Asia as comments from the U.S. Federal Reserve Chair Jerome Powell on future interest rate hikes sounded less hawkish than expected. The U.S. Federal Reserve raised interest rates by 75 basis points to 2.25-2.5% as markets expected. Fed Chair Jerome Powell sounded less hawkish on taming inflation in his press conference, saying another “usually large” interest rate hike may be appropriate at the September meeting while the final decision will be determined by the incoming economic data. Investors shifted their focus to U.S. gross domestic product for the second quarter, which is due later in the day to see whether a technical recession happens.
  • Oil rose more than $1 a barrel on Thursday, extending gains from the previous session, buoyed by improved risk appetite among investors as lower crude inventories and a rebound in gasoline demand in the United States supported prices. The U.S. Federal Reserve raised its benchmark overnight interest rate by three-quarters of a percentage point, in line with expectations, to cool inflation, while the dollar fell on hopes for a slower hiking path. A weaker dollar makes oil, priced in dollars, cheaper for buyers in other countries to purchase. On supplies, U.S. crude oil stockpiles fell by 4.5 million barrels last week, against expectations of a 1 million-barrel drop, while U.S. gasoline demand rebounded by 8.5% week on week, data from the Energy Information Administration showed. [EIA/S] U.S. crude exports reached a record 4.5 million bpd as WTI traded at a steep discount to Brent, making purchases of U.S. crude grades more attractive to foreign buyers. Prices also found support as the Group of Seven richest economies aims to have a price-capping mechanism on Russian oil exports in place by Dec. 5, a senior G7 official said on Wednesday. U.S. crude oil production growth could also be limited by the availability of fracking equipment and crews, as well as capital constraints, executives said this week. Russia has cut gas supply via Nord Stream 1, its main gas link to Europe, to just 20% of capacity. That could lead to switching to crude from gas and prop up oil prices in the short term, analysts said. However, this is offset by normalising Libyan supply, leading to a largely balanced global oil market in the fourth quarter, followed by a 1 million bpd stockbuild in the first quarter of 2023, they added.

 

 
Intraday RESISTANCE LEVELS
28th July 2022 R1 R2 R3
GOLD-XAU 1,741-1,746 1,760 1,774-1,785
Silver-XAG 19.50-19.80 20.35 20.70-21.45
Crude Oil 98.00-98.90 99.90 100.70-101.85
EURO/USD 1.0290-1.0335 1.0390 1.0430-1.0470
GBP/USD 1.2200-1.2245 1.2300 1.2405-1.2479
USD/JPY 136.30-137.40 137.90 138.50-138.90

Intraday SUPPORTS LEVELS
28th July 2022 S1 S2 S3
GOLD-XAU 1,732-1,707 1,700 1,684-1,676
Silver-XAG 18.90-18.60 17.80 17.50-16.90
Crude Oil 96.90-96.00 94.90-94.00 92.35-91.30
EURO/USD 1.0190 1.0150 1.0010-0.9950
GBP/USD 1.2100-1.2010 1.1930-1.1870 1.1810-1.1760
USD/JPY 135.25 134.10 133.50-133.10

Intra-Day Strategy (28th 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$1740.16/oz and low of US$1711.47/oz. Gold up 1.00% at US$1734.36/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 1741-1787 keeping stop loss closing above 1787, targeting 1732-1707-1700 and 1684-1676-1665. Buy in between 1721-1644 with risk below 1644, targeting 1741-1750 and 1760-1774.

 
Intraday Support Levels
S1     1,732-1,707
S2     1,700
S3     1,684-1,676
Intraday Resistance Levels
R1     1,741-1,746
R2     1,760
R3     1,774-1,785

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 Wednesday made its intraday high of US$19.12/oz and low of US$18.44/oz settled up by 2.53% at US$19.08/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 18.90-16.90, targeting 19.50-19.80 and 20.45-20.70-21.20 with stop loss should be place on the breakage below 16.90. Sell in between 19.50-23.75 with stop loss above 23.75; targeting 18.90-18.40-17.90 and 17.50-16.90-16.40.

 
Intraday  Support Levels
S1     18.90-18.60
S2     17.80
S3     17.50-16.90

Intraday  Resistance Levels
R1     19.50-19.80
R2     20.35
R3     20.70-21.45

TECHNICAL INDICATORS
Name   Value Action
14DRSI   46.747 Buy
20-DMA   19.22 Sell
50-DMA   20.33 Sell
100-DMA   21.47 Sell
200-DMA   22.50 Sell
STOCH(5,3)   80.615 Buy
MACD(12,26,9)   -0.642 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US97.80/bbl, intraday low of US$93.57/bbl and settled up by 2.58% to close at US$97.42/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 96.90-96.00-94.30 and 93.20-92.30-91.30. Buy above 96.90-90.30 with risk daily closing below 90.30 and targeting 98.00-98.90-99.90 and 100.70-101.85.

 
Intraday Support Levels
S1     96.90-96.00
S2     94.90-94.00
S3     92.35-91.30

Intraday Resistance Levels
R1     98.00-98.90
R2     99.90
R3     100.70-101.85

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.197 Sell
20-DMA   98.88 Buy
50-DMA   102.69 Buy
100-DMA   101.85 Buy
200-DMA   94.99 Buy
STOCH(5,3)   67.76 Sell
MACD(12,26,9)   -3.175 Buy

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.0096/EUR, high of US$1.0220/EUR and settled the day up by 0.0744% to close at US$1.0202/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$1.2017/GBP, high of US$1.2185/GBP and settled the day down 1.12% to close at US$1.2153/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 1.1210-1.1700 with target 1.2200-1.2245-1.2310 and 1.2405-1.2479 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     1.2100-1.2010
S2     1.1930-1.1870
S3     1.1810-1.1760

Intraday Resistance Levels
R1     1.2200-1.2245
R2     1.2300
R3     1.2405-1.2479

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

57.086

Buy
20-DMA   1.2046 Sell
50-DMA   1.2204 Sell
100-DMA   1.2476 Sell
200-DMA   1.2833 Sell
STOCH(5,3)   84.761 Buy
MACD(12,26,9)   -0.0032 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY136.31/USD and made an intraday high of JPY137.45/USD and settled the day down by % at JPY136.49/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 137.00-141.50 with risk above 141.50 targeting 136.50 and 135.20-134.60-134.00. Long positions above 136.30-130.60 with targets of 137.00-137.40-137.90 and 139.00-139.40-140.10 with stop below 130.60.

 
Intraday Support Levels
S1     135.25
S2     134.10
S3     133.50-133.10

INTRADAY RESISTANCE LEVELS
R1     136.30-137.40
R2     137.90
R3     138.50-138.90

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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