Contact Us:  

Daily Market Report
08 Nov 2019

EURUSD

The EUR/USD pair fell to a fresh three-week low of 1.1035 as risk-appetite was combined with negative news coming from the Union. The European Commission decided to downgrade its growth forecasts for this year and the next, indicating that  “the external environment has become much less supportive and uncertainty is running high.” The news fueled the decline of the pair, as the dollar was already enjoying some substantial demand on the back of risk appetite. This last came after the Chinese Commerce Ministry said that the country has agreed with the US to cancel existing tariffs in different phases if a trade deal is reached.

Germany released September Industrial Production, which came in worse than expected, down by 0.6% in the month and by 4.3% when compared to a year earlier. The US, on the other hand, released just minor data, Initial Jobless Claims for the week ended November 1, which came in at  211K, beating the market’s expectations.

This Friday, Germany will release the September Trade Balance, seen posting a surplus of €18.1B, while the US will release the preliminary estimate of the November Michigan Consumer Sentiment Index, foreseen at 95.9 from the previous 95.5.

The EUR/USD pair has broken below the 38.2% retracement of its October rally at around 1.1060, accelerating its decline afterwards. In the 4 hours chart, the price is now developing below all of its moving averages, with the 20 SMA extending its decline below the 100 SMA. Technical indicators have recovered within negative levels, but remain near daily lows, indicating strong selling interest. The pair will likely accelerate its decline on a break below 1.1030, the 50% retracement of the mentioned rally.

Support levels: 1.1030 1.1000 1.0970

Resistance levels: 1.1065 1.1100 1.1145  

USDJPY

Prevalent risk appetite sent the USD/JPY pair to 109.48, its highest since late May. The pair rallied on the back of news indicating that the US and China are planning to roll back tariffs in phases, once a deal is reached. Representatives from both economies confirmed so, sending US equities to all-time highs even before the opening. Wall Street closed with substantial gains, while government debt yields soared, with that for the 10-year Treasury note hitting 1.97% amid resurgent demand for high-yielding assets.

The Japanese macroeconomic calendar will be quite busy this Friday, as the country will release September Labour Cash Earnings and Overall Household Spending.  Later, it will publish the preliminary estimates for the September Leading Economic Index and the Coincident Index for the same month.

The USD/JPY pair is consolidating gains above 109.30, short-term bullish despite losing upward momentum. In the 4 hours chart, the pair is firmly above all of its moving averages, with the 20 SMA heading sharply higher above the larger ones. Technical indicators, in the meantime, remain near daily highs, with the RSI still close to overbought levels, although retreating alongside the price. Nevertheless, the risk is skewed to the upside, with room to extend gains toward the critical 110.00 figure.

Support levels: 109.30 109.00 108.65  

Resistance levels: 109.60 110.00 110.40

GBPUSD

The GBP/USD pair fell this Thursday to 1.2793, its lowest since September 24, as the Bank of England surprised with a dovish decision. MPC decided to leave it’s monetary policy unchanged, although two members voted for a rate cut. Governor Carney, in his later speech, flagged the risks of a global economic downturn and warned that a no-deal Brexit would likely result in job losses and business closures. The central bank has kick-started the year with a hawkish view of the economy, with policymakers inclined for a rate hike. This time, it seems they are closer to easing the monetary policy. The never-ending Brexit drama, for sure adds to policymakers’ concerns. The UK won’t release relevant macroeconomic data this Friday.

The GBP/USD pair has recovered from the mentioned low, trading around the 23.6% retracement of its October rally at 1.2820, with a neutral-to-bearish short-term stance. The 4 hours chart shows that the upside has been capped by a bearish 20 SMA crossing below the 100 SMA, while technical indicators stabilised in negative territory. Further declines should be expected on a break below 1.2785, the immediate support.

Support levels: 1.2785 1.2750 1.2720

Resistance levels: 1.2870 1.2910 1.2950  

AUDUSD

The AUD/USD pair recovered the 0.6900 level in the last trading session of the day, after falling at the beginning of the week to a fresh weekly low of 0.6861. The Aussie fell amid doubts about the US-China trade deal after the leaders of both economies delayed their next meeting to December. However, sentiment shifted during the London session, as Chinese authorities confirmed plans to roll back tariffs in phases if a deal is reached, something that US representatives confirmed in the American afternoon.

Australia released the AIG Performance of Construction Index, which recovered in October to 43.9 from 42.6. September Trade Balance, in the meantime, posted an upbeat surplus of 7180M, as exports rose by 3.0% in the month, while imports also increased by 3.0%. During the upcoming Asian session, the country will release housing data and the latest RBA Meeting’s Minutes. However, attention will be on China, as the country will release its October Trade Balance.

The AUD/USD pair is at the upper end of its weekly range, although the lack of follow-through leaves the intraday picture neutral. In the 4 hours chart, the pair is developing above a flat 20 SMA, anyway, far above the larger ones which retain their bullish slopes. Technical indicators in the meantime, remain around their midlines, without strength enough to support additions gains. These last are more likely on a break above 0.6930, the immediate resistance.

Support levels: 0.6885 0.6840 0.6800

Resistance levels: 0.6930 0.6965 0.7000

GOLD

Gold traders are having a hard time to cope with the market as mixed reports lingering regarding the trade deal between the US and China. The previous day, reports highlighting uncertainty regarding the time and place of the meeting killed the positive vibe on the markets and pushed safe-haven assets such as Gold higher. However, on Thursday, news circulating that the US and China could be looking at a pause and even removal of tariffs to push the phase one deal through. It has been said that the White House is still working on the assumption that the phase one deal could be signed this month. This is contrary to Reuters reports that the deal will be signed at the NATO summit in London on 4th December and the reports created a huge turn-around on risk sentiment. As Wall Street is testing new all-time high levels and the USD index DXY is testing above 98 level, Gold plumbed to an almost two-month low.

At the time of the writing, Gold lost %1,79 on a daily basis and daily RSI(14) is heading to oversold levels fast around 38. Shy of last two-months low, which is 1.459$ is the first support for the yellow metal. Below that level, the targets can be located at 1.446$ (1.266$-1.557$ %38.20) and 1.411$ (1.266$-1.557$ %50.00). On the topside, the first resistance is located at 1.482$ (1.557$-1.459$ %23.6). Above that level, 1.488$ (1.266$-1.557$ %23.6) and 1.500$ levels can be followed as resistance levels.

Support Levels: 1.459$ 1.446$ 1.411$

Resistance Levels: 1.482$ 1.488$ 1.500$

 

SILVER

As usual, while Gold and Silver following the same route direction wise, silver suffered a heavier loss on a daily basis compared to Gold. While Gold lost around %1.79 at the time of the writing on a daily basis, Silver shredded %3.30. From a technical point of view, as long as Silver holds over 17.00$, this move still can be labelled as a retracement after the rally which peaked at 19.64$.

16.97$ (%50.0 14.29$-19.65$) is the critical level to watch for further losses. Below this level, a test of 16.33$ (%61.8 14.29$-19.65$) and 15.55$ (%76.40 14.29$-19.65$) can be targeted. On the top side, the resistances are lined at 17.60$ (%38.20 14.29$-19.65$), 18.38$ (%23.6 14.29$-19.65$) and over that 18.70$.

Support Levels: 16.97$ 16.33$ 15.55$

Resistance Levels: 17.60$ 18.38$ 18.70$

 

CRUDE WTI

WTI is also had a positive day on Thursday with the risk-on news regarding the trade deal between the US and China. On the other hand, speculations that the OPEC+ could not revise higher the ongoing output cuts at its meeting next month and rising crude stocks in the US overshadowed the positive mood caused by the trade deal optimism. 

WTI had a daily gain of %2 at the time of writing and managed to break 57$ level as the markets head into the last day of the trading week. As long as WTI holds over 57.00$ level, 58.63$ (63.33$-51.03$ %61.80), 59.64$ (76.88$-42.40$ %50.00) and 60.00$ levels can be followed as topside targets. Below the 57.13$ (63.33$-51.03$ %50.00), the supports can be located at 55.73$ (63.33$-51.03$ %38.20) and 53.93$ (63.33$-51.03$ %23.60).

Support Levels: 57.13$ 55.73$ 53.93$

Resistance Levels 58.63$ 59.64$ 60.00$

 

DOW JONES

There is no secret that now the news circulating the trade wars is the biggest catalyst to markets on both sides. Earlier in the day, China's Commerce Ministry said that the US and China have agreed to cancel existing tariffs in different phases. "If China and the US reach phase one trade deal, both sides must cancel existing tariffs at the same time, in the same proportion based on agreement," the ministry said in a statement. The statement boosted the risk appetite on the markets and Dow Jones started the day with a bullish gap, gaining around %0.80 on a daily basis at the time of writing and renewed all-time high level with 27.774.

with this move, the daily RSI(14) is testing overbought levels around 70. Over the 27.770 level, 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


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