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Daily Market Report
05 Nov 2019

EURUSD

The EUR/USD pair is trading lower in range, confined to a  50 pips’ range throughout this Monday. The pair seesawed between gains and losses but held near its highest in three months on the back of persistent optimism.  Market players are confident the US and China will be able to sign an agreement this month that would be the beginning of the end of the trade war. Also,  US Commerce Secretary Wilbur Ross said that he hopes enough progress has been made in trade negotiations with the Union to avoid tariffs on EU imported vehicles.

Data coming from the Union beat expectations but signalled a continued economic slowdown in the region, as the German Markit Manufacturing Index came in at 42.1, better than the expected 41.9 expected, although barely bouncing from a ten-year low of 41.7. For the whole Union, the index resulted at 45.9 from 45.7 previously estimated, also indicating slowing growth in manufacturing output at the beginning of Q4. In the US, the ISM-NY Business Conditions Index improved to 47.7 in October, beating expectations of 45.8, although Factory Orders fell in September by 0.6%.

This Tuesday, the EU will release the September Producer Price Index, expected to be up by 0.1% MoM and down by 1.3. The US session will bring the ISM Non-Manufacturing PMI foreseen at 53.4 from the previous 52.6. The Markit Services PMI is expected at 51, unchanged from the preliminary estimate.

The EUR/USD pair has flirted with the 1.1180 resistance before turning south, holding, however, well above the 23.6% retracement of its October rally at 1.1115. The 4-hour chart shows that the pair has broken below a bullish 20 SMA, but that the larger ones maintain their bullish slopes below it, with the 100 SMA converging with the mentioned Fibonacci support. Technical indicators have been extending their declines throughout the day, with the Momentum aiming to recover within negative levels and the RSI flat at 48. The ongoing slide may continue, although it seems unlikely that the pair would hit the 1.1065 support, and even less likely a  bearish breakout of the Fibonacci level.

Support levels: 1.1115 1.1090 1.1065

Resistance levels: 1.1180 1.1210 1.1245

USDJPY

The USD/JPY pair has posted a robust comeback this Monday, reaching the 108.60 during the US afternoon, as Wall Street surged, with the Dow Jones reaching a fresh all-time high. US Treasury yields were also up, settling not far below their daily highs, amid encouraging headlines correlated to the US-China trade deal. Japan kick-started the week with a holiday, keeping its macroeconomic calendar empty. This Tuesday, the country will release the October Monetary Base, seen up by 2.9%.

The USD/JPY pair has recovered further after bottoming by the end of the previous week at around the 50% retracement of its October rally, now struggling around the 23.6% retracement of the same bullish run. Technical readings in the 4-hour chart favour additional advances, as the price has managed to surpass all of its moving averages, while technical indicators stand well into positive territory, the Momentum maintaining its bullish slope but the RSI decelerating at around 59. Nevertheless, the risk is skewed to the upside with the market eyeing a retest of the 109.30 price zone.

Support levels: 108.20 107.90 107.65

Resistance levels: 108.95 109.30 109.60

GBPUSD

The GBP/USD pair is trading below the 1.2900 level, falling during European trading hours following the release of the UK Markit Construction PMI. The report showed that construction output fell for the sixth consecutive month, with the index coming in at 44.2 in October, better than the previous 43.3, although still close to the ten-year low of 43.1 seen in June.  In the Brexit front, UK PM Johnson’s spokesperson, said earlier today that the government would not be extending the Brexit transition period beyond January 31st. However, speculative interest remains focused on the December elections, and the consequences the result may have on Brexit and the pound. This Tuesday, Markit will unveil the October Services PMI, seen at 49.7 from 49.5 previously.

The GBP/USD pair is trading at 1.2880 and near its daily low, and the 4-hour chart suggests that the pair may continue easing in the short-term, although in the wider perspective bulls retain the lead. In the mentioned chart, the pair settled below a bullish 20 SMA, while the larger moving averages continue heading higher below the current level. Technical indicators in the meantime, maintain their bearish slopes within negative levels. A critical Fibonacci support comes at 1.2820, where buyers should surge to keep the longer-term bullish potential intact.

Support levels: 1.2885 1.2850 1.2820

Resistance levels: 1.2975 1.3010 1.3050

AUDUSD

The Australian dollar gave up to dollar’s demand in the last trading session of the day, losing the 0.6900 level. The pair’s decline seems to be correlated to Wall Street soaring to fresh record highs on the back of relief news coming from the trade war front, as speculative interest dumped other high-yielding assets in favour of stocks. Also, the Reserve Bank of Australia is having a monetary policy meeting early Tuesday, and market players seem to be eager to take profits out of the table ahead of it. The central bank is foreseen holding rates after cutting them three times this year and uplift the wording about the economic outlook, easing the dovish stance.

Australian October TD Securities Inflation which was up by 0.1% MoM and by 1.5% YoY, matching the previous readings. Ahead of the RBA’s announcement, the country will release the AIG Performance of Service Index, and the Commonwealth Bank Services PMI for the same month.

The AUD/USD pair is hovering around 0.6880, short-term bearish according to the 4-hour chart, as it’s accelerating its decline after breaking below the 20 SMA. The 100 SMA maintains its bullish slope below the current level, while technical indicators have accelerated their declines within negative levels. The pair’s direction will depend on how the market reacts to the  RBA announcement, with a dovish surprise most likely having a larger effect than a hawkish one.

Support levels: 0.6840 0.6800 0.6770

Resistance levels: 0.6900 0.6930 0.6965 

GOLD

On the first day of the trading week, Gold is trying to hold its ground over 1.500$ although the improved risk tone is dominating the global equity markets. Investors are still not that cautious about a possible recession and only 25 bp rate cut from the Fed is considered as hawkish defence, which is supporting the global risk-on mood. While better than expected Q3 GDP and NFP data are trying to support the USD index DXY and the improved market sentiment, Wall Street is posting another all-time high level.

As long as Gold maintains its move over 1.500$ level, The resistance levels are can be followed 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

Again Silver seems like a better performer compared to Gold. While the yellow metal is in hovering around the negative zone but trying to hold its ground over 1.500$ level, Silver is trading over 18.00$ with a tick in the positive zone at the time of writing. Traders still consider Silver’s price is “affordable” and general market sentiment is bullish for more potential up.

As long as the price stays over 18.00$ 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

Both WTI and Brent found extra support with comments from the Iranian Minister of Oil Zanganeh who said he expects further cuts to be agreed at the 5th/6th December meeting. On the other hand, oil prices were under pressure fear of a global slowdown caused by the trade wars between the US and China and slowdown in major economies.

At the time of writing, WTI is up %1.80 on daily basis testing 57.13$ (63.33$-51.03$ %50.00) resistance. Over this level, resistances can be watched at 58.63$ (63.33$-51.03$ %61.80) and 59.64$ (76.88$-42.40$ %50.0). 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$ 59.64$

 

DOW JONES

As a result of the risk-on mood in the markets, Wall Street is renewing its all-time high levels. Rumours surrounding the first phase of the deal is set regarding the trade wars between the Us and China supporting the optimistic look at the markets. Also, despite the cautious tone from the Fed with the final rate cut of the year, better than expected growth and labour data set fueling expectations that the Fed might be more hawkish in 2020. Also, along with the rally seen on Oil prices is supporting the energy industry shares to move up and carry the indexes too.

Dow Jones started the day with a bullish gap right over previous all-time high at 27.400 level while the daily RSI(14) is getting closer to overbought levels. 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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