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Daily Market Report
06 Nov 2019

EURUSD

The EUR/USD pair fell to a fresh three-week low of 1.1063, amid renewed dollar’s demand on the back of risk-appetite and persistent hopes that the US and China are heading into a trade arrangement. The greenback got an additional boost from the US ISM Non-Manufacturing Index, which beat expectations by printing 54.7 in October, much better than the 53.5 expected and the 52.6 previous.  The news spooked the ghost of a US recession, therefore suggesting the US Federal Reserve would refrain from cutting rates further.

This Wednesday, Markit will release the final versions of the October Services PMI for the Union and its members. The EU figure is foreseen at 51.8, unchanged from its previous estimate, while the German index is foreseen at 52.5 from 51.2. The EU will release September Retail Sales, seen up by 0.1% MoM and by 2.5% YoY. The US calendar will be quite light, as it will only include weekly MBA Mortgage Applications and a speech from Fed’s Evans.

The EUR/USD pair has bounced just modestly from the mentioned daily low, also a critical Fibonacci support, as it stands for the 38.2% retracement of the October rally. Technical readings in the 4-hour chart suggest that further slides are likely, as the pair has extended its slump well below the 20 and 100 SMA, with the shortest gaining bearish traction. The 200 SMA is now flat below the current level, a few pips above the 50% retracement of the mentioned rally, this last at 1.1030. Technical indicators have pared their declines and bounced modestly after reaching oversold levels, suggesting selling interest remains strong despite the pair being at a major support.

Support levels: 1.1030 1.1000 1.0970

Resistance levels: 1.1100 1.1145 1.1180

USDJPY

The USD/JPY pair regained the 109.00 level in the American afternoon, approaching the critical 109.30 resistance area, to settle a few pips below this last. The Japanese currency suffered from risk-appetite, amid signals the US and China are moving forward on paring their trade war. Market talks indicated that Washington was considering rolling back levies on $112B on Chinese imports, suggesting that both economies are aiming for more than just a first phase agreement. Later in the day, news headlines indicated that China is looking for more signs coming from the US to make the deal more balanced. The strong momentum in equities kept the pair underpinned throughout the day, alongside US government debt yields, which rose to their highest in over a week.

During the upcoming Asian session, the Bank of Japan will release the Minutes of its latest monetary policy meeting, and the October Jibun Bank Services PMI, seen at 50.2 from the previous 52.8.

The USD/JPY pair is at a brink of a bullish breakout, as it hit the 109.30 to later retreat twice in the last three months. The 4-hour chart shows that it has recovered above all of its moving averages, with the 20 SMA resuming its advance between the larger ones. Technical indicators have lost strength upward, holding within overbought levels, indicating absent selling interest. A break through the mentioned area should open doors for a rally toward the 110.00 level, while beyond this last, the pair would enter a bullish market.

Support levels: 109.00 108.65 108.20

Resistance levels: 109.30 109.60 110.00

GBPUSD

The GBP/USD pair edged marginally lower this Tuesday, extending its weekly decline by a few pips to 1.2858, ending the day little changed in the 1.2870 price zone. The pair hit a daily high of 1.2917 following the release of the UK Markit Services PMI, up in October to 50 from 49.5 in September, also beating the market’s expectations. Nevertheless, the upbeat report was not enough to keep the pair in the green, as resurgent demand for the American currency weighed more.  In the Brexit front, little new happened. EU’s Chief Negotiator Barnier was on the wires, repeating familiar words over the matter. Among other things, he remarked that, even if the deal is ratified, a new partnership would be needed with the UK, adding that negotiations will be ‘difficult.’

The UK won’t release relevant data this Wednesday, with attention on Thursday, BOE’s monetary policy announcement. The central bank is expected to remain on-hold, although policymakers always have the chance of surprising market players.

The GBP/USD pair has eased just modestly, holding above the 23.6% retracement of its latest bullish run. The short-term picture indicates that the risk is skewed to the downside, although the bearish potential is limited, as the Sterling is generally immune to the dollar’s development. In the 4-hour chart, the pair is trading below a flat 20 SMA, but holding above 100 SMA, while technical indicators remain within negative levels, although without clear directional strength. The mentioned Fibonacci support stands at 1.2820, and the pair would need to break below it to turn bearish.

Support levels: 1.2850 1.2820 1.2785

Resistance levels: 1.2910 1.2950 1.2990

AUDUSD

The AUD/USD pair has rallied to 0.6907, rising during Asian trading hours amid persistent risk-appetite. As expected, the Reserve Bank of Australia held interest rates at 0.75%, amid modest improvements in unemployment and inflation figures. Also, house prices have rebounded in these last couple of months, taken some pressure off the RBA. The central bank stated that the economy as “little changed” in recent months, although the improvements in domestic demand made them confident enough to hint a pause until next year.

The substantial momentum in European equities was not enough to maintain AUD/USD afloat during London trading hours, with the pair trimming most of its intraday gains during the American session on the back of the dollar’s broad demand. There’re no macroeconomic releases scheduled in Australia for this Wednesday.

The AUD/USD pair is neutral in the short-term and according to the 4-hour chart, as it spent the day seesawing around a now directionless 20 SMA, although holding above the 100 and 200 SMA. Technical indicators in the mentioned chart are stuck around their midlines, without clear directional strength. The pair has chances of turning bearish once below 0.6840, the immediate support, with the next relevant one being the 0.6770 price zone.

Support levels: 0.6840 0.6800 0.6770

Resistance levels: 0.6900 0.6930 0.6965 

GOLD

Gold had one of the worst days since September after losing 1.500$ handle. Improved risk appetite in the global markets. Better than expected PMI data set and possible light is seen at the end of the tunnel regarding the trade deal between the US and China sparked the risk-on trade. On the other hand, the rise in the US Treasury bond yields which supported the USD and put the non-yielding Gold under pressure. Along with the improved risk sentiment, Wall Street is still hovering around its all-time high levels.

At the time of writing, Gold is about to test the 1.480$ level with a daily loss of %1,70. The daily RSI(14) had a sharp decline from 60 levels to mid-40 which was tested a couple of times in October. As long as Gold stays below 1.500$  the support levels are located at 1.488$ (1.266$-1.557$ %23.6), 1.482$ (1.557$-1.459$ %23.6) and 1.459$ (October dip). 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).

Support Levels: 1.488$ 1.482$ 1.459$

Resistance Levels: 1.500$ 1.508$ 1.519$

 

SILVER

Silver is also suffered by the improved risk appetite on the market along with Gold and had a worse daily loss compared to Gold. While the rally in Wall Street is still on with taking a breather the USD index DXY is testing 98 levels with the rise in the US Treasury bond yields.

Silver lost %2,40 at the time of writing on a daily basis and testing critical 17.60$ level, which is the %38.20 level of 14.29$ and 19.64$ move. Below this level, supports are located at  16.97$ (%50.0 14.29$-19.65$) and 16.33$ (%61.8 14.29$-19.65$). Over 17.60$, the resistances are located in the first resistance is lined at 18.38$ (%23.6 14.29$-19.65$) and over that 18.70$. 

Support Levels: 17.60$ 16.97$ 16.33$

Resistance Levels: 18.00$ 18.38$ 18.70$

 

CRUDE WTI

WTI is keeping its up momentum on the second day of the trading supported by the risk-on trading seen on markets. Also, comments from OPEC’s Barkindo regarding an expected hike in production cut in December supported the rally alongside positive expectations from the possible trade deal between the US and China. Later in the day, the oil traders will be watching the American Petroleum Institute's (API) weekly crude oil stock report.

WTI is testing 57.13$ (63.33$-51.03$ %50.00) resistance which is critical for the rally to continue. Over this level, resistances can be watched at 58.63$ (63.33$-51.03$ %61.80) and 59.64$ (76.88$-42.40$ %50.00). 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

After another all-time high level is seen on the first day of trading, Dow Jones is trying to extend its rally with a modest margin which seems like taking a breather for the moment. Globally improved risk appetite along with a possible trade deal between the US and China for phase one is trying to keep the rally alive. On the other hand, more than a 3.5% increase in the 10-year US Treasury bond yield is supporting USD on a global level.

Although with a loss in momentum, the daily RSI(14) is still edging higher to overbought levels around 65. 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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