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Daily Market Report
04 Nov 2019

EURUSD

The EUR/USD pair closed the first day of the month at 1.1165, a few pips below October top at 1.1179. The greenback enjoyed an intraday respite following the release of an upbeat Nonfarm Payroll report, which showed that the country added 128K new jobs, much better than the 89K expected. Furthermore, the September headline was upwardly revised from 136K to 180K. The unemployment rate ticked higher to 3.6% as expected, although the participation rate also increased, to 63.3% from 63.2%. Wages grew within familiar levels, with no relevant deviations. The currency changed course after the release of the October ISM Manufacturing PMI, which missed expectations with 48.3. The index improved from the previous 47.8 but signalled contraction for a second consecutive month.

This Monday, Markit will release the final versions of the October Manufacturing PMI for the Union, while the EU will publish the November Sentix Investor Confidence Index, seen at -13 from the previous -16.8. The US calendar will be light, as it will only include the October ISM-NY Business Conditions Index, foreseen at 45.8 from the previous 42.8

The EUR/USD pair is bullish, as, in the daily chart, it extended its advance above a still bearish 100 DMA while the 20 DMA heads sharply higher below this last. The 200 DMA maintains a bearish slope at around 1.1200, offering dynamic resistance. Technical indicators have resumed their advances within positive levels, lacking enough strength but keeping the risk skewed to the upside. In the shorter term, and according to the 4-hour chart, a bullish 20 SMA provided intraday support, now at around 1.1150, while technical indicators remain well into positive ground, lacking directional strength, but clearly showing the absence of sellers.

Support levels: 1.1150 1.1115 1.1180  

Resistance levels: 1.1180 1.1210 1.1245

USDJPY

The USD/JPY pair fell last week to finish it at 108.16, having recovered just modestly on Friday after bottoming at 107.88. It found support on a solid US employment report which kept US government debt yields in positive ground and Wall Street well into the green. However, concerns about the US economic health kept the upside in check, adding pressure on the greenback, already hurt by the latest Federal Reserve decision on monetary policy. The October Jibun Bank Manufacturing PMI came in at 48.4 from the previous and expected 48.5. There’re no data scheduled in the country, as Japan will observe Culture  Day.

The USD/JPY pair settled at its lowest in three weeks, and the daily chart suggests that the decline may extend during the upcoming sessions, as, after failing to surpass the 200 DMA, it settled below the 20 DMA. Technical indicators turned flat right after entering negative territory, giving no clear directional clues but skewing the risk to the downside. In the shorter-term, and according to the 4-hour chart, the pair settled just above a flat 200 SMA, while the 20 SMA crossed below the 100 SMA, both above the current level. Technical indicators corrected extreme oversold conditions but quickly resumed their declines, favouring a new leg lower on a break below 107.65, a critical support.

Support levels: 108.00 107.65 107.20

Resistance levels: 108.45 108.80 109.15

GBPUSD

The GBP/USD pair closed Friday unchanged around 1.2935, retaining weekly gains. It spent the last trading day in consolidative mode, immune to US data, instead underpinned by a pause in Brexit turmoil. The focus has shifted now to the upcoming elections in December, with Brexit delayed to January 2020. The UK didn’t release relevant data that could affect the pound.

Over the weekend, local news reported that PM Johnson would abandon the threat of a no-deal Brexit in his Conservative Party's election manifesto, but rather focus on getting Brexit done. Also, polls showed that Tories have a comfortable lead over Labour opposition, with most of those showing an advantage of over 10%. Both news could be considered Sterling-positive, lending support to the currency at the weekly opening. Markit will release the UK October Construction PMI this Monday, expected at 44 vs. the previous 43.3.

The daily chart for the GBP/USD pair shows that the risk remains skewed to the upside, as it is developing far above all of its moving averages and with the 20 DMA having crossed above the larger ones. Technical indicators have pared their declines after correcting extreme overbought conditions, holding ground within positive levels. In the 4-hour chart, the pair offers a neutral-to-bullish stance, barely holding above its 20 SMA, which advances just modestly above the larger ones, while technical indicators eased within positive levels, the RSI currently consolidating around 58 and the Momentum nearing its mid-line.

Support levels:  1.2920 1.2885 1.2850    

Resistance levels: 1.2975 1.3010 1.3050

AUDUSD

The AUD/USD pair settled above 0.6900 its highest weekly close since July. The pair resumed its advance after retreating just modestly on Thursday, on the back of broad dollar’s weakness and despite softer-than-expected Chinese data. According to the official release, the NBS Manufacturing PMI contracted to 49.2 in October, while the Services index came in at 52.8, also missing the market’s expectations. The pair also found support in progress between trade talks between the US and China, as on Friday, the Chinese outlet Xinhua said the two economies ha reached a “consensus on principles,” during a  telephone call.

Australia will release September Retail Sales this Monday, seen up by 0.2% MoM, following a 0.4% advance in the previous month, and October TD Securities Inflation, previously at 1.5% YoY.

The daily chart for the AUD/USD pair shows that it confirmed a double-bottom figure, as it closed above the neckline at 0.6900, of around 230 pips’ height, which means that the pair could extend gains up to the 0.7100 region. In the same chart, the pair advanced above the 20 and 100 SMA, with the shortest heading higher. The 200 SMA offers an immediate dynamic resistance at around 0.6960, while technical indicators recovered after a mild-downward correction, heading higher near overbought levels, in line with further gains ahead.  Shorter-term, and according to the 4-hour chart, the upside is favoured, as the pair continued meeting buyers around a bullish 20 SMA, while technical indicators hold well into positive territory, the Momentum heading north and the RSI directionless at around 62.

Support levels: 0.6880 0.6840 0.6800

Resistance levels: 0.6930 0.6965 0.7000

GOLD

As the event-driven trading week ended, Gold managed to find some solid ground with the help of USD weakness. On Wednesday, as expected FED cut the rates 25 bs from %2.00 to %1.75. The policymakers highlighted that now they will be on hold stage to examine the economic outlook for further change in the monetary policy. Also, Fed’s Powell said that they will need a significant move up in the inflation to start raising the rates again. On the global side, doubts about the trade deal between the US and China also pressurized USD too. even an upbeat NFP data failed to support the greenback and the USD index DXY finished each day of the entire week in the negative zone. The US labour market added 128K new jobs in October, while September figure was revised to 180K from 136K. The unemployment rate inched higher as expected to 3.6%, as the participation rate increased by 63.3%. Wages’ growth was in line with the market’s expectations. Along with all those events, the USD index DXY barely hold over 97 level.

Gold benefited the weakness in USD and closed the week well over 1.500$ at 1.514$. The resistance levels are now located at 1.519$ (1.557$-1.459$ %61.80) and 1.534$ (1.557$-1.459$ %76.40) and the supports below the critical 1.500$ level are located at 1.488$ (1.266$-1.557$ %23.6) and 1.482$ (1.557$-1.459$ %23.6).

Support Levels: 1.508$ 1.500$ 1.488$

Resistance Levels: 1.519$ 1.534$ 1.557$

 

SILVER

Although ending the week above the important 18.00$ level, Silver failed to benefit the weak USD like Gold and virtually not changed on a weekly closing basis. As the markets gear up for a data-light trading week, the traders will most likely digest the FOMC and NFP outcome. Also, the possible trade deal between the US and China will be monitored closely as a global risk event.

The daily RSI(14) is now flat at 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 started November with a record-breaking hike since mid-September and ended the Friday trading with %3.57 up over 56.00$ level. Even the OPEC’s World Oil Outlook forecasts show a weakness for the global demand in the shadow of a trade deal between the US and China, the black Gold managed to find solid buyers. On the other hand, once again escalating tensions between the US and Iran might pressure the oil prices worldwide. On November 5 OPEC will publish its World Oil Outlook (WOO). So far, it appears cuts in production have not been able to override the downward forces of formidable fundamentals while the industry has been pressurized this year by the globally weakening demand amid a slowdown in major economies, which has pressured producers and forced major players to adopt supply-cutting policies. 

From the technical perspective, if WTI manages to protect 56.00$ level the resistance levels might be at 57.13$ (63.33$-51.03$ %38.20) and 58.63$ (63.33$-51.03$ %38.20). Below the 56.00$ handle, the supports are located at 54.00$ (63.33$-51.03$ %23.60) and 50.54$ (76.88$-42.40$ %23.60).

Support Levels: 56.00$ 54.00$ 50.54$

Resistance Levels: 57.13$ 58.63$ 60.00$

 

DOW JONES

Dow Jones managed to earn ground and erase its post FOMC losses with the help of better than expected NFP data on Friday. The index tested its all-time high but failed to break its record with couple of pips ending the week at 27.347 level. The United States added 128 thousand jobs in October, the Bureau of Labor Statistics reported Friday. The hiring during October exceeded the expectations of the surveyed analysts, who expected an increase of 85K new jobs. The upbeat data supports the Fed to halt its rate cut schema however Powell highlighted that they will be following the inflation data for a further decision regarding the monetary policy in the US.

With the 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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