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Daily Market Report
07 Nov 2019

EURUSD

The EUR/USD pair is heading into the Asian session trading unchanged daily basis, retreating from an intraday high of 1.1092. Volatility was quite limited across the board, as investors remain optimistic about progress in the US-China trade relationship, although speculative interest is waiting for some confirmation about tariffs removal before rushing further into high-yielding assets. Mid-US afternoon, news agencies reported that the trade arrangement between the two economies could be delayed to December, sending Wall Street into the red and boosting safe-haven assets.

European data released at the beginning of the day beat expectations, as German September Factory Orders beat the market’s expectations, rising by 1.3% MoM and falling by 5.4% YoY. Meanwhile, the final versions for the October Markit Services PMI came in better than anticipated, up to 51.6 for Germany and to 52.2 for the whole Union. In the EU, the Markit Composite PMI improved to 50.6 from the previous month’s 50.1, but still signalling the weakest rate of growth in the past six years. US employment-related data came in mixed, as Q3 Nonfarm Productivity missed expectations, down by 0.2% while Unit Labor Costs for the same quarter were sharply up, to 3.6% from 2.4%.

This Thursday, Germany will release September Industrial Production, while the US macroeconomic calendar will include weekly unemployment figures and September Credit Change.

The EUR/USD pair is trading a handful of pips above its weekly low of 1.1063, hovering around the 38.2% retracement of its October rally. In the 4 hours chart, the pair has spent the day below its 20 and 100 SMA both just above the 23.6% retracement of the mentioned decline and with the shortest accelerating south. Technical indicators in the mentioned chart have resumed their declines after correcting higher, now consolidating near oversold territory and supporting additional slides, particularly if the pair breaks below 1.1060.

Support levels: 1.1060 1.1030 1.1000  

Resistance levels: 1.1100 1.1145 1.1180

USDJPY

The USD/JPY pair has retreated from a weekly high of 109.23, extending its intraday slide to 108.81 following US-China trade news, as, according to a senior Trump administration official, the meeting between Trump and Xi Jinping to sign phase one could be delayed until December. The same official said that it’s possible that the trade agreement would not be reached, “but a deal is more likely than not.” The news sent Wall Street lower and safe-havens up, although gains were modest. The yield on the benchmark 10-year Treasury note retreated to 1.81%, marginally lower for the day.

In the data front, Japan released the Jibun Bank Services PMI for October, which was worse than anticipated, as the index came in at 49.7 vs the previous 52.8, and well below the 50.3 expected. This Thursday, the Japanese macroeconomic calendar has nothing to offer.

The USD/JPY pair is trading below the 109.00 level but firmly above a critical Fibonacci support at 108.65, the 23.6% retracement of its October rally. Also, and in the 4-hour chart, the pair remains above all of its moving averages, with the 100 SMA directionless converging with the mentioned Fibonacci level and the 20 SMA maintaining its bullish slope above it. Technical indicators have continued easing from overbought reading, holding within positive levels and losing their bearish strength, suggesting limited selling interest.

Support levels: 108.65 108.20 107.90

Resistance levels: 109.30 109.60 110.00

GBPUSD

The GBP/USD pair has settled in the 1.2840/50 price zone, having spent the this Wednesday at the lower end of its weekly range, directionless. The UK didn’t release macroeconomic data, and in the political front, little changed. Tories continue to lead polls, while PM Boris Johnson said that if they win the election, he would put an end to Brexit parliamentary paralysis and “unleash the country’s potential.”

Market players are now waiting for the Bank of England, which will unveil its latest monetary policy decision this Thursday. Given Brexit in the way, the most likely scenario is that policymakers will maintain the status quo and the meeting a non-event. However, it is a central bank meeting and has the chance of triggering volatile moves.

The short-term picture indicates that the GBP/USD pair is at risk of falling further, although it would need to break below 1.2820, a Fibonacci support, to confirm a steeper downward move. In the 4 hours chart, a bearish 20 SMA capped advances, while the pair is currently below its 100 SMA. Technical indicators, in the meantime, remain within negative levels, with uneven bearish strength yet anyway heading lower.

Support levels: 1.2820 1.2785 1.2750

Resistance levels: 1.2910 1.2950 1.2990

AUDUSD

The AUD/USD pair spent the day consolidating around 0.6900, but fell toward 0.6868, and heads into the Asian session opening trading a few pips above this last. The Aussie came under pressure following news that the US and China could delay signing a trade deal.  During these last few days, news suggested that China was demanding that the US starts rolling back tariffs, although it was not seen derailing progress toward a trade deal.  The market reacted negatively to the headline, although the movements were limited.

Australia will release the October AIG Performance of Construction Index this Thursday, previously at 42.6, and the September Trade Balance, with the trade surplus seen shrinking to 5000M.

The AUD/USD pair is technically bearish according to intraday readings, although a steeper slide could be expected only with a break below 0.6840. In the 4-hour chart, the pair remained capped by selling interest aligned around a flat 20 SMA, while technical indicators spent the day within negative levels, lacking clear directional strength.

Support levels: 0.6840 0.6800 0.6770

Resistance levels: 0.6900 0.6930 0.6965 

GOLD

After the previous day’s heavy sell-off supported by the improved risk sentiment on the markets, on Wednesday trading Gold found some support and tried to cover almost half of its losses. The big catalyst for this move came close to Wall Street close with news regarding the Trump-Xi meeting. Due to a Reuters report, a senior Trump administration official informed the news agency that the meeting between US President Trump and his Chinese Counterpart Xi could be delayed until December as discussions continue over terms and venue. the official told Reuters it's still possible the US-China trade pact will not be reached, but a deal is more likely than not. Also, he highlighted that China's push for more tariff rollbacks is not seen derailing progress toward a trade deal. As a first reaction to the news, Wall Street accelerated its move down and Gold tested its daily highs.

Despite the support from the wires, Gold is still can’t find a solid base over 1.500$.As long as Gold stays below 1.500$  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 also suffered yesterday’s heavy sell-off and tested the levels below the important 17.60$ level. Although the optimism surrounding the trade deal between the US and China, today, news hit the market with a possible delay about the meeting between Trump and Xi which disturbed the positive risk sentiment among the markets. As a result, the demand for safe havens such as Gold and Silver increased on Wednesday trading.

At the time of the writing, Silver is trying to hold around 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 faced a heavy sell-off today and erased all its gains made yesterday after trying to test around 58.00$ level which is the top since October. Oil was mostly supported by the optimism surrounding the possible trade deal between the US and China and further production cuts planned by OPEC. WTI even ignored the API data which showed that US Crude Stocks rose by about 4.3 million barrels for the week ended Nov. 1 vs. an increase of 0.592 million barrels seen last. Today the news hit the wires and Bloomberg reported that the biggest OPEC+ members are not looking for another production cut. Also, a Reuters report put the optimism surrounding the trade deal into the shade. The weekly report published by the United States (US) Energy Information Administration (EIA) on Wednesday also revealed that the commercial crude oil inventories in the US increased by 7.9 million barrels in the week ending November 1st to come in higher than analysts estimate for a build of 1.5 million barrels which also pressurized WTI.

Unable to hold over 57.13$ (63.33$-51.03$ %50.00), WTI lost around %1,5 on a daily basis at the time of writing and trying to hold over 56.00$. If WTI manages to protect 56.00$ level the resistance levels might be at 57.13$ (63.33$-51.03$ %50.0) and 58.63$ (63.33$-51.03$ %61.8). 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

As the risk appetite hurt on Wednesday along with the news highlighting the uncertainty about Trump-Xi meeting, Wall Street extended its losses after losing the momentum yesterday. Due to a Reuters report based on a Trump official, the meeting between US President Trump and his Chinese Counterpart Xi could be delayed until December as discussions continue over terms and venue.

Although the retracement, DJI is still holding its ground over the 27.400 level although there is still a gap to be filled between 27.350 and 27.400 left from this week’s opening.  On the top side, 27.770 and 28.400 can be followed as new record highs while below 27.400 level the supports can be seen at 27.000, 26.757 (24.680-27.400 %23.60), 26.360 (24.680-27.398 %38.20) and 26.000  (24.680-27.398 %50.00).

Support Levels: 27.400 27.000 26.757

Resistance Levels: 27.770 28.400 29.000

 

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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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