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Daily Market Report
30 Oct 2019

EURUSD

The EUR/USD pair has recovered the 1.1100 threshold in another quiet trading day, hitting a daily high of 1.1118 during US trading hours. The pair started the day with a sour tone, hitting 1.1073 before recovering. Still, it remains confined to a tight intraday range ahead of the US first-tier events coming this Wednesday. The market’s sentiment oscillated on the back of US-China related headlines, as investors started the day with hopes a trade deal will be sign this November, hopes that faded during US trading hours on news indicating that the US and China may not sign phase one of the trade deal when they meet at the APEC summit in Chile in November. The news affected high-yielding assets, but also the USD.

The EU macroeconomic calendar was quite scarce, with just minor data coming from Spain and Italy, while the US released Pending Home Sales for September, which rose by more than anticipated, up by 1.5% MoM and by 3.9% YoY.

This Wednesday, the EU will release October Consumer Confidence and the Economic Sentiment Indicator, this last, seen at 101.1 from 101.7 previously. Germany will release preliminary CPI estimate, foreseen at 1.1% YoY from the previous 1.2%. The US, on the other hand, will publish Q3 preliminary GDP, seen at 1.9% down from 2.6% in Q2, while the US Federal Reserve is expected to cut rates by 25 bps in the US afternoon.

The EUR/USD pair is entering the Asian session trading around the 23.6% retracement of its latest daily run, after nearing the 38.2% retracement of the same advance, this last providing support at 1.1065. The short-term picture is neutral-to-bullish, as, in the 4-hour chart, the pair has recovered above all of its moving averages, although the 20 SMA maintains its bearish slope. Technical indicators in the mentioned chart are around their midlines, the Momentum aiming higher but the RSI directionless at around 52. The pair has room to extend its gains, but bulls will take over only once beyond 1.1180.

Support levels: 1.1065 1.1020 1.0980

Resistance levels: 1.1115 1.1150 1.1180

 

USDJPY

The USD/JPY pair has peaked at 109.06 this Tuesday, its highest since last August, although it remained below the 109.00 figure for most of the day, ending the day pretty much unchanged in the 108.90 region. The initial spike was backed by hopes the US and China will soon sign phase one of the trade deal, although such hopes faded later in the day amid headlines suggesting it would be delayed. Equities in Europe closed in the red, while US indexes were mixed, although not far from their opening levels. Treasury yields, another measure of the market’s sentiment, fell early US, recovering modestly ahead of the close.

Japan´s Tokyo inflation released at the beginning of the day remained stagnated in October. According to the official release, yearly CPI was up by a modest 0.4%, matching the previous reading and below the market’s expectations. Inflation ex-fresh food came in at 0.5%, missing the market’s forecast of 0.7%. The country will release September Retail Trade in the upcoming session, seen posting sharp monthly declines.

The USD/JPY pair retains a neutral-to-bullish stance in its 4-hour chart, with an intraday pullback meeting buyers around a mild-bullish 20 SMA. The 100 and 200 SMA maintain modest bullish slopes below it. Technical indicators, however, continue resting directionless above their midlines, lacking directional strength. As commented on previous updates, the pair’s behaviour around 109.30 will be critical, as bulls will likely become more courageous on a break above August monthly high.

Support levels: 108.60 108.25 108.00

Resistance levels: 109.00 109.35 109.70

GBPUSD

The GBP/USD pair has reached a fresh weekly high of 1.2904 on the back of news indicating that the Labour Party would support a snap election in December. "We will seek to expand the franchise in the December election," Corbyn said. "I'm ready for the election, whatever date it is." His words, coupled with market’s dislike for the greenback on the back of US-China related headlines, hinting a delay in the signing of phase one of a trade arrangement. UK PM Johnson will table his election bill after the Parliament approved the second reading of the Election Bill.

The UK released  Mortgage Approvals, which were up to 65.919K in September, while monthly M4 Money Supply was up by 0.7%, both beating the market’s expectations. Consumer Credit in the same month, however, missed the market’s forecast.  There’s no data scheduled in the UK for this Wednesday.

The GBP/USD pair has eased from the mentioned daily high, trading around 1.2860, the upper end of its limited weekly range. The pair is neutral-to-bullish, as, despite the lack of follow-through, the pair has held above the 23.6% retracement of its October rally. In the 4 hours chart, the pair settled a few pips above a mild-bearish 20 SMA, while the larger ones keep heading north below it, and as technical indicators hold directionless just above their mid-lines. Critical support comes at 1.2788, where the pair bottomed last week, although chances of such a slump seem unlikely at the time being.

Support levels: 1.2810 1.2785 1.2750

Resistance levels: 1.2880 1.2920 1.2965 

AUDUSD

The Australian dollar surged against the greenback to 0.6871, its highest in almost a week, on the back of broad dollar’s weakness. The pair seesawed between gains and losses at the beginning of the day, amid positive US-China trade headlines, but discouraging comments from RBA’s Governor, Phillip Lowe, who repeated that the governing board was prepared to ease the monetary policy further and reiterated that rate cuts are helping the economy. The pair later advanced on dollar’s weakness, in spite of negative news related to the US-China relationship.

Australia will release this Wednesday  New Home Sales and Q3 inflation estimates. Quarterly inflation is expected to have risen by 0.5%, after advancing 0.6% in the previous quarter, while yearly basis, the CPI is seen at 1.7% from 1.6% previously. The RBA Trimmed Mean estimates are seen at .04% and 1.6% respectively, unchanged from the previous quarterly estimates.

The AUD/USD pair holds on to daily gains in the 0.6860 price zone, bullish in the short-term, as the 4-hour chart shows that it remains above all of its moving averages, which anyway remain directionless and as technical indicators attempt to recover within positive levels. The bullish potential of the pair will increase on a break above 0.6877, so far the monthly high, although large selling interest is suspected around the 0.6900 level.

Support levels: 0.6840 0.6800 0.6770  

Resistance levels: 0.6875 0.6900 0.6930

GOLD

Gold extended its downside move on the second day of trading while the USD index DXY is trying to regain 98 levels. In general, the risk-on mood in the markets supported by the developments on Brexit and trade wars between the US and China is pressuring the safe haven. Earlier in the day, reports of the UK opposition Labour party backing the call for a snap election eased concerns over a no-deal Brexit. On the trade wars side, South China Morning Post (SCMP), a Chinese news outlet, reported that US President Trump and his Chinese counterpart Xi was expected to sign an interim trade deal at the APEC summit in Chile on November 17th. On the USD side, DXY halted its up move after the Conference Board's Consumer Confidence Index came in at 125.9 in October to miss the market expectation of 128.

With the improved market sentiment, the yellow metal failed to hold 1.500$ level on yesterday’s trading and tested 1.483$ level while the daily RSI(14) is still hovering around 50 levels. As the time of writing, Gold is trying to hold 1.488$ (1.266$-1.557$ %23.6) level and below that, the first support can be watched at 1.482$ (1.557$-1.459$ %23.6). On the topside, the resistances are lined at 1.496$ (1.557$-1.459$ %38.2) and 1.508$ (1.557$-1.459$ %50.0).

Support Levels: 1.488$ 1.482$ 1.459$

Resistance Levels: 1.496$ 1.508$1.519$


SILVER

Silver almost followed the same trading with Gold, easing its gains for a second consecutive day of trading tried to hold over 17.50$ level while the markets will focus on Q3 GDP figures in the US and FOMC as the final rate cut of the year is highly expected. This scenario is likely to boost precious metals against the USD however, most of the market move might be priced already. On the other hand, Silver looks in a better position to end the day close to opening levels rather than Gold.

Silver tested its daily low at 17.60$ which is the %38.20 level of 14.29$ and 19.64$ move. Below this level, the first support is located at  16.97$ (%50.0 14.29$-19.65$) and 16.33$ (%61.8 14.29$-19.65$). With a clear break of 18.00$ silver can test 18.38$ (%23.6 14.29$-19.65$) and 18.70$.

Support Levels: 17.60$ 16.97$ 16.33$

Resistance Levels: 18.38$ 19.00$ 19.64$

 

CRUDE WTI

On the second day of trading, WTI had a volatile session dipping below the 55$ level. However, at the US session, the black gold managed to pick up the pace and managed to erase its losses trying to break 56$. Last week the US stockpiles in Oklahoma appear to have grown as the oil-producing members supporting the idea of further production cuts. On the other hand, the optimism surrounding the possible trade deal between the US and China might boost oil prices with the possibility of an increase in demand.

As the daily RSI(14) is trying to gain momentum over the 50 levels, 55.57$ (76.88$-42.40$ %38.20) stands as the middle zone of the consolidation phase for the WTI. Below that, a test of 50.54$ (76.88$-42.40$ %23.60) can be followed as this level is tested a couple of times since June. On the top side, a break over 59.64$ (76.88$-42.40$ %50.00) can lead the way to 61.80$ (76.88$-42.40$ %61.80).

Support Levels: 55.57$ 53.62$ 50.54$ 

Resistance Levels: 59.64$ 60.00$ 63.71$

 

DOW JONES

As the earnings season continues, Dow Jones is waiting for an extra catalyst to keep its momentum up for fresh all-time highs. On the other hand, all eyes will be at tomorrow’s FED’s interest rate decision along with the press conference and US Q3 GDP figures. A 25 bp rate cut is almost certain and already priced by the markets. It is likely that the Fed might pass December meeting and continue lowering the rates on the March meeting. Apart from the strong results from the earning season, Dow Jones is supported by a possible trade deal between the US and China.

At the time of writing the DJI is trying to hold in the positive territory around 27.110 level while the daily RSI(14) is heading north through 60 levels. With a close over 27.000, the index can first try to break its all-time high level at 27.398. On the top side, 27.770 and 28.400 can be followed as new record highs. Below the 26.757 (24.680-27.398 %23.60) the supports can be found at 26.360  (24.680-27.398 %38.20) and 26.000 (24.680-27.398 %50.00).

Support Levels: 26.757 26.360 26.000

Resistance Levels: 27.398 27.770 28.400

 

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* All the Moving Average support and resistance levels are dynamic by nature. Means when the price approaches the Moving averages, slight variation occurs in the forecasted Moving Average support and resistance levels. Previous few days’ intraday levels are also signicant while trading the current day as the price tend to hover around these levels for some time. Levels in red indicate strong, critical or vital.

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