Contact Us:  

Daily Market Report
01 Nov 2019

EURUSD

The EUR/USD pair seesawed between gains and losses, finishing the day pretty much unchanged in the 1.1150 price zone. The pair traded as high as 1.1175, reaching such a high following the release of some encouraging European data, and as the dollar remained pressured by Fed’s echoes. The EU reported its preliminary estimate of Q3 GDP, up by 0.2%, slightly above the expected 0.1%, and preliminary October inflation, with the core yearly CPI up to 1.1% from 1.0%. German data, however, missed the market’s expectations, as Retail Sales rose by less-than-anticipated in September, up by 0.1% MoM and by 3.4% YoY. The following decline came as a result of headlines reporting that China was said to doubt it could achieve a long-term trade deal with Trump, prompting speculative interest into safe-haven assets.

The US released unemployment claims, that rose to 218K in the week ended October 25, while US-based employers announced job cuts of 50,275 in October, 20.97% higher than the 41,557 announced in the previous month. Also, core PCE inflation remained steady at 1.7% yearly basis. The numbers anticipate a weak Nonfarm Payroll October report. The US economy is expected to have added 89K new jobs in October, while the unemployment rate is seen ticking up to 3.6%. Wages’ growth is seen within average, up by 0.3% MoM and by 3.0% YoY.

The EUR/USD pair was unable to advance beyond the October high at 1.1179 but ends the day, and the month quite close to it, which skews the risk to the upside. The short-term picture favours additional advances, as, in the 4-hour chart, the pair is above all of its moving averages, with the 20 SMA heading firmly north. Also, technical indicators have retreated from overbought levels, but have decelerated their declines, holding well into positive ground. The bullish potential will likely increase on a break above 1.1180, with room then to extend its advance toward the 1.1240/50 price zone.

Support levels: 1.1115 1.1080 1.1065  

Resistance levels: 1.1180 1.1210 1.1245

USDJPY

The USD/JPY pair lost the 108.00 level in the US afternoon, extending its decline for a second consecutive day and settling around it. The slump was triggered this Thursday by US-China trade war headlines, indicating that Chinese authorities are doubting about reaching a long-term deal with the US. Asian equities managed to close with gains, but European indexes edged lower, while Wall Street collapsed, further weighed by headlines indicating that the US Congress approved Trump’s impeachment process. The run to safety saw government debt yields falling, with the benchmark yield on the 10-year Treasury note down to 1.68%.

The Bank of Japan kept its monetary policy unchanged as expected, hinting it may steepen easing in the future. Data in Japan was generally encouraging, as September Industrial Production rose by 1.1% YoY against an expected decline of 4.1%. Housing Starts in the same month declined by 4.9%, less than anticipated, while October Consumer Confidence ticked higher to 36.2. The country will release employment data and the October Jibun Bank Manufacturing PMI, seen steady at 48.5.

The USD/JPY pair is trading at its lowest since October 10, short-term bearish, according to intraday technical readings. In the 4 hours chart, the pair is now below all of its moving averages, while technical indicators pared their declines, currently consolidating losses in extreme oversold territory. The upcoming direction will depend on how the market reacts to the US NFP report, yet the risk is skewed to the downside. The next support comes at 107.65, with a break below it exposing the 106.80 price zone.

Support levels: 107.65 107.20 106.80

Resistance levels: 108.10 108.50 108.85

GBPUSD

The GBP/USD pair extended its weekly advance up to 1.2975, as the greenback remained weak post-Fed, while news related to the upcoming UK election on December 12. The latest polls released Thursday show that Conservatives are getting growing support,  with those favouring Tories up to 36.1%. Support for the opposition Labour party, on the other hand, has been decreasing, currently around 25%. Voting intentions are not granting Tories´ will won but indeed point to Johnson’s victory, somehow supporting his version of the Brexit deal. The market seems to like the news, now that the menace of leaving with or without a deal is gone.

The UK released the October GFK Consumer Confidence Index, which plummeted to -14 from -12, also below the market’s expectations of -13. The UK won’t release relevant macroeconomic data on Friday, with the calendar’s focus on US monthly employment figures.

The GBP/USD pair is holding above the 1.2900 figure, not far from its October high at 1.3011. The pair is bullish, although the positive momentum is limited at the current levels, with the market unwilling to push it too far above the 1.3000 figure. In the 4-hour chart, the pair continues developing above moving averages, although technical indicators have turned south within positive levels, falling short of suggesting additional declines ahead.

Support levels: 1.2920 1.2885 1.2850    

Resistance levels: 1.2975 1.3010 1.3050

AUDUSD

The AUD/USD pair has reached 0.6929 this Thursday, it highest for the month but ended the day in the red at around 0.6885, dragged lower by the sour tone of US equities.  The early run came on the back of broad dollar’s weakness, although downbeat Chinese data released at the beginning of the day weighed on the Aussie. The October NBS Manufacturing PMI came in at 49.3, below the previous and the expected 49.8. The Non-Manufacturing PMI for the same month resulted in 52.8, also missing the market’s forecast of 53.9. Australian data failed to impress, with Building Permits up by 7.6% in September.

The upcoming session will bring the AIG Performance of Manufacturing Index and the Commonwealth Bank Manufacturing PMI for the same month. Later in the day, China will release the Caixin Manufacturing PMI, foreseen at 51 vs the previous 51.4, although less relevant than the official figure already released.

The AUD/USD pair sharp pullback fell short of indicating further declines ahead, as, in the 4-hour chart, it’s currently consolidating above a bullish 20 SMA, which extended its advance beyond the larger ones. Technical indicators retreated from overbought levels, with the Momentum still heading south but the RSI now flat at around 56. The bearish case will be clearer if the pair falls below 0.6840, the immediate support level, although it seems unlikely that such a decline would take place before US employment data.

Support levels: 0.6840 0.6800 0.6770  

Resistance levels: 0.6900 0.6930 0.6965

GOLD

On Wednesday the USD index DXY was on its backfoot although the final rate cut of the year from FED was highly-priced in the markets. The index retraced back from 98 zone and in line with the fresh risk aversion seen on the markets, the safe-haven precious metals gained traction. On the other hand, additional news regarding the trade war between the US and China turned the tide to a pessimistic tone. A Bloomberg report mentioned that China is not willing to make a long-term trade deal with the US and as a result demand for secure assets such as Gold increased while the US Treasury Bond yields plunged. Tomorrow the markets will focus on the US labour data set which can affect the USD index DXY and as a result Gold price.

Although with the immediate effect Gold tested 1.482$ with a quick market response the yellow metal ended the day at 1.496$ and kept its momentum on Thursday trading with more than %1 increase to 1.510$. Over the 1.496$ (1.557$-1.459$ %38.2) level, with a net close over 1.500$, the first resistance is at 1.508$ (1.557$-1.459$ %50.0) and 1.519$ (1.557$-1.459$ %61.80). Below the physiological level of 1.500$ level, the supports can be located at 1.488$ (1.266$-1.557$ %23.6), the first support can be watched at 1.482$ (1.557$-1.459$ %23.6).

Support Levels: 1.500$ 1.488$ 1.482$

Resistance Levels: 1.508$ 1.519$ 1.534$

 

SILVER

On Thursday trade, Silver followed the same fashion with its yellow ally and kept its strong move up. Apart from the developments about the US economy, silver has a higher catalyst from the real world compared to Gold as it has a wider range of industrial usage. Also, the low price if the silver per ounce against the USD makes it more favourable among the traders.

As Silver found solid support at 17.60$ which is the %38.20 level of 14.29$ and 19.64$ move and managed to break 18.00$ on the aftermath of FOMC decision. While the daily RSI(14) is testing 60 level, the first resistance is lined at 18.38$ (%23.6 14.29$-19.65$) and over that 18.70$. Below 17.60$ Below 17.60$ the first support is located at  16.97$ (%50.0 14.29$-19.65$) and 16.33$ (%61.8 14.29$-19.65$).

Support Levels: 17.60$ 16.97$ 16.33$

Resistance Levels: 18.00$ 18.38$ 18.70$

 

CRUDE WTI

WTI kept its cursed way down as global USD weakness and geopolitical worries. As the FED now in wait and see mode regarding further rate cuts, the USD lost its charm among the global markets. On the geopolitical side, while uncertainty regarding the US and China trade wars is pressuring the global demand forecasts, a new wave of rising tension between the US and Turkey regarding the operation in Syria also affecting the demand in Oil in general. As an addition, a pump seal leak triggered a fire in the terminal area of Citgo Corpus Christi Texas Refinery added strength to the energy benchmark’s recent pullback.

WTI is trying to defend 54.00$ level as it closed every trading day this week with losses. Below 54.00$ (63.33$-51.03$ %23.60) 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. Above 55.57$ (76.88$-42.40$ %38.20), the first resistance can be followed at 57.13$ (63.33$-51.03$ %38.20).

Support Levels: 53.93$ 51.03$ 50.54$

Resistance Levels: 55.57$ 57.13$ 58.63$

 

DOW JONES

Wall Street had a mixed opening after the FOMC but as the markets approach to close, Dow Jones plunged around %0,80 on a daily basis and slid below 27.000 level. The Fed’s policy statement released Wednesday showed that the Fed will now use a higher bar for rate reductions as the committee voted 8-2 to lower the benchmark rate. The two members who did not vote in favour to rate cut preferred to hold the interest rates as it is. Fed officials have now cut rates three times since July as a caution for a possible recession in the economy. Although the FEd is in a cautious tone, Q3 GDP beat the estimations.

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

 

MACROECONOMIC EVENTS

Do you have any questions?

Our Customer Services team is here to help you.

Get in touch 24 hours a day, 5 days a week:

 

* 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.

All News & Analysis provided by:

Disclaimer: NCM Investment is a subsidiary and service provider of Amwal International Investment Company. The material contained here does not contain (and should not be construed as containing) investment advice or an investment recommendation, or, an offer of or solicitation for, a transaction in any financial instrument. NCM Investment accepts no responsibility for any use that may be made of these comments and for any consequences that result. This communication must not be reproduced or further distributed. All information in this publication has been compiled from publicly available sources that are believed to be reliable; however, we cannot guarantee the accuracy of all information. All information and documentation associated with this report have been produced for the purposes of providing the report only.

Please remember that trading financial markets carry a high degree of risk to your capital. It is possible to lose more than your initial stake. Leveraged products may not be suitable for all investors, therefore please ensure you fully understand the risks involved and seek independent advice if necessary.

All Rights Reserved © NCM Investment