Daily Market Report
12 Nov 2019

EURUSD

The EUR/USD para has managed to recover some ground this Monday, although the pair remains depressed a handful of pips above the 1.1000 level. The market’s mood took a turn to the worse amid growing uncertainty around a US-China trade deal. Nevertheless, and despite being usually seen as a safe-haven, the greenback edged lower against most major rivals, correcting its overbought conditions after last week’s rally.

The calendar was scarce, with no relevant data coming from the EU and the US, while this last, celebrated Veterans Day, although most markets were opened. This Tuesday, attention will be on the German November ZEW Survey, as Economic Sentiment in the country is seen bouncing from -22.8 to -13. For the whole EU sentiment, however, is seen plummeting to -32.5 from -25.3 previously. During the US afternoon, Federal Reserve’s Clarida will offer a speech on monetary policy, price stability and bond yields.

The EUR/USD pair has settled a few pips above the 50% retracement of its October rally in the 1.1040 price zone. The short-term picture is bearish, according to technical readings in the 4-hour chart, as the intraday advance stalled below converging 20 and 200 SMA, both providing dynamic resistance at around 1.1045. Indicators in the mentioned time-frame have corrected oversold conditions but lost strength upward within negative territory.  

Support levels: 1.1015 1.0980 1.0940

Resistance levels: 1.1045 1.1080 1.1110

USDJPY

The USD/JPY pair is trading lower in range, hovering around the 109.00 level ahead of the Asian opening. The pair started the day losing some ground, although the daily low was set at 108.89, from where it slowly recovered. The market was generally cautious amid the absence of first-tier releases and uncertainty surrounding the US-China trade deal, with equities giving up strongly, but government debt yields retaining last week’s gains.

Japanese data released came in below the market’s expectations, as September Machinery Orders fell by 2.9% MoM against a 0.9% advance expected, and were up by 5.1% when compared to a year earlier, against the 7.9% forecast. The Trade Balance in the same month posted a modest ¥1.1 B surplus, far below the ¥705 B expected. Also, the Eco Watchers survey on the current situation plummeted to 36.7. The dismal numbers revived concerns about the economic health of the country. This Tuesday, the country will release October Money Supply.

The  USD/JPY is offering a neutral-to-bearish stance in its 4-hour chart, as it spent the day just below a flat 20 SMA, while the Momentum indicator turned south within negative levels. The pair is above directionless 100 and 200 SMA, while the RSI consolidates around 48, indicating limited selling interest. The pair could extend its short-term decline on a break below 108.90, while it would need to advance beyond the 109.30 level to shrug off the negative stance.

Support levels: 108.90 108.65  108.40

Resistance levels: 109.30 109.60 110.00 

GBPUSD

The Sterling was no doubt the star of the day, soaring to 1.2897 against the greenback, in spite of softer-than-anticipated UK data. The kingdom’s Total Trade Balance posted a £ 12.541B deficit, while Industrial Production declined by 0.3% MoM and by 1.4% YoY. Manufacturing Production in the same period, declined by 0.4% MoM and by 1.8% YoY. The preliminary estimate of Q3 Gross Domestic Product showed that the UK avoided recession, growing by 0.3%, slightly below the 0.4% expected although better than the previous -0.2%.

Comments from Brexit Party´s leader, Nigel Farage, boosted the pound, as he said he won’t contest Conservative seats won at the last election, but instead go after the seats held by Lib Dem and Labour. The latest polls show that Conservatives retain the lead, although Labours are clawing closer. This Tuesday, the UK will publish its latest employment data. The ILO unemployment rate is seen steady at 3.9% in September, while average earnings in the three-month to September are also seen unchanged.

The GBP/USD pair has settled around 1.2860, and it has recovered above the 23.6% retracement of the latest daily advance, now the immediate support at around 1.2820. In the 4-hour chart, a flat 100 SMA is offering dynamic resistance just ahead of the 1.2900 level, while the 20 SMA converges with the mentioned Fibonacci support. Technical indicators have recovered, with the Momentum heading north and the RSI consolidating both in positive territory.

Support levels: 1.2820 1.2785 1.2750

Resistance levels: 1.2895 1.2920 1.2950

AUDUSD

The AUD/USD pair spent the day lifeless around 0.6855, failing to attract investors. The absence of local data and uncertainty surrounding US-China trade developments kept investors side-lined. The Australian Dollar was trapped between falling precious metals’ prices and a nice come back in Wall Street, as US indexes reverted sharp intraday losses ahead of the close. This Tuesday, Australia will release the NAB’s Business Confidence Index for October, seen unchanged at 0, and the NAB’s Business Conditions for the same month, expected to remain at 2.

The AUD/USD pair retains its bearish stance in the short-term, given that, in the 4-hour chart, the pair continues developing below its 20 and 100 SMA,  with the shorter one maintaining its downward slope just above the larger one. Technical indicators in this time-frame have remained within negative levels, the Momentum seesawing but the RSI flat at around 40, reflecting the market’s absent interest.

Support levels: 0.6840 0.6800 0.6770

Resistance levels: 0.6895 0.6930 0.6965 

GOLD

Gold had the biggest loss of the year last week and with the improved risk appetite seen on the markets and the sharp move down still dominates the trade. While hopes of the United States and China mutually retracting tariffs as part of the phase-one of the trade deal is fueling the risk-on mood, USD index DXY is still holding its ground over 98 level. On the physical demand side, Turkey has become the biggest Gold importer with 71.4 tones in Q3 followed by Russia with 34.9 tones and China with 21.8 tones. Apart from the developments regarding the trade deal, markets will follow Trump’s speech on Tuesday and FED’s Powell’s testimony after the inflation data set release on Wednesday.

Gold has broken its range on the first day of the trading as it slid below the previous dip at 1.459$. Hitting shy of 1.446$ (1.266$-1.557$ %38.20) Gold found some interest and managed to move away from its almost three months dip. As the first support is seen at 1.446$ (1.266$-1.557$ %38.20), below this level 1.411$ (1.266$-1.557$ %50.0) and 1.377$ (1.266$-1.557$ %61.80) levels can be followed. The first resistance can be seen at 1.459$ (October dip) and above this level Gold can test 1.482$ (1.557$-1.459$ %23.6) and 1.496$ (1.557$-1.459$ %38.2).

Support Levels: 1.446$ 1.411$ 1.377$

Resistance Levels: 1.459$ 1.482$ 1.496$

 

SILVER

Surprisingly, Silver had a better Monday trading compared to Gold. While the yellow metal was in the negative zone at the time of writing, Silver is hovering around 16.80$ with a daily increase around %0.40 after testing shy of 17.00$ which is an important level to watch. As the trade deal saga still continues, until solid outcome volatility in the risk assets can be expected in the markets.

Both psychological and %50.0 of 14.29$-19.64$ level, 17.00$ is now the first target to break for correction up. Above this level, 17.60$ (%38.20 14.29$-19.65$) and 18.38$ (%23.6 14.29$-19.65$) can be targeted. On the downside, the supports can be seen at 16.33$ (%61.8 14.29$-19.65$), 15.55$ (%76.40 14.29$-19.65$) and 15.00$ levels.

Support Levels: 16.33$ 15.55$ 15.00$

Resistance Levels: 17.00$ 17.60$ 18.38$

 

CRUDE WTI

WTI is still hanging around the decisive level for the next move up or down as mixed report regarding the trade deal is the main risk driver for the markets. On the other hand, while OPEC+ has practically ruled out deeper oil output cuts at its meeting in December, the cartel will probably extend further the ongoing agreement which also puts pressure on the oil prices. As usual, weekly US crude oil supply data from both API and EIA will be followed by the markets.

From the technical point of view, 57.13$ (63.33$-51.03$ %50.00) is an important level to watch for a move up or down. Above this 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 targets up. As long as the prices stay below this level, 55.73$ (63.33$-51.03$ %38.20), 53.93$ (63.33$-51.03$ %23.60) and 51.03$ (October dip) levels can be targeted.

Support Levels: 55.73$ 53.93$ 50.00$

Resistance Levels: 57.13$ 58.63$ 59.64$

 

DOW JONES

As the investors are following the developments regarding the trade deal and getting ready for the key events this week regarding the US inflation data and Powell’s testimony, Wall street is still hovering around its all-time highs waiting for another catalyst. Mixed reports regarding the trade deal still the main driver of the risk mood on the market while the first day of the trading week was a bit dull due to Veteran’s Day holiday.

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