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Daily Market Report
14 Nov 2019

EURUSD

The EUR/USD pair has spent most of the day confined to a tight range, flirting with the 1.1000 level and capped by sellers around 1.1020. The market was waiting for US Federal Reserve’s Chair Powell testimony before a Congressional Committee. The prepared remarks showed that nothing that the market doesn’t know. Fed’s main concerns are low inflation and risks coming from abroad, but at the same time, the baseline outlook for the US economy remains favourable. The document also showed that the monetary policy is likely to remain appropriate as long as incoming data broadly remains consistent with the Fed's economic outlook.

Germany released this Wednesday the final version of October inflation, which came in as expected, up by 0.1% MoM and by 0.9% YoY in its harmonised version with the EU. The US also released October CPI which came in slightly better than anticipated,  up by 0.4% MoM and by 1.8% YoY. Yearly core inflation, however, came in at 2.3%, below the 2.4% expected.

This Thursday, Germany will release Q3 Gross Domestic Product, seen at -0.1%, matching the previous estimate. For the EU, Q3 GDP is seen up by a modest 0.2% in the quarter. The US will publish minor data, but multiple Fed’s officers are scheduled to speak, included vice-chair Clarida, while Powell will repeat its testimony before a different commission.

The EUR/USD pair is battling with 1.1000, just above the 61.8% retracement of its October rally, the immediate support at 1.0990. In the 4-hour chart, the pair is biased lower, as it continues easing below all of its moving averages, and with the 20 SMA heading south below the larger ones. The Momentum indicator slides within negative levels after another failed attempt to regain the upside, while the RSI hovers around 30. Large stops are suspected below the mentioned Fibonacci support, and once triggered, the pair could extend its decline toward 1.0920.

Support levels: 1.0990 1.0950 1.0920

Resistance levels: 1.1030 1.1065 1.1110 

USDJPY

The USD/JPY pair fell to 108.65 at the beginning of the American session, bouncing afterwards from the strong support level. The slump was triggered by a run to safety, with government debt yields falling to fresh weekly lows and equities trading mostly in the red. The movement, however, was preventive ahead of Powell’s testimony before the Congress, also backed by persistent uncertainty around US-China trade deal developments.  US Treasury yields edged lower, weighing on the pair, with the negative momentum exacerbated by the end of the day on news indicating mounting tensions between the US and China amid trade talks hitting a snag on trade purchases.

Japan released early Wednesday, the October Producer Price Index, which declined by 0.4% when compared to a year earlier. For the month, prices at factory levels were up by 1.1%, below the market’s expectations. During the upcoming Asian session, Japan will release this Thursday, Q3 GDP, which is expected to have risen by 0.2% in the three months to September, and by an annualized 0.8%.

The  USD/JPY is trading around its daily low, with the risk inclined to the downside, according to the 4-hour chart, as the pair is below a bearish 20 SMA, also below a directionless 100 SMA. Technical indicators, in the meantime, remain within negative levels, gaining bearish strength, although the Momentum remains neutral.

Support levels: 108.65 108.40 108.10

Resistance levels: 109.00 109.30 109.60 

 

GBPUSD

The GBP/USD pair is ending the American session with a second consecutive daily doji around 1.2850. The market keeps ignoring UK data, which, this time, missed the market’s expectations. According to the official release, inflation in the kingdom was down by 0.2% in October, and up by 1.5% when compared to a year earlier, missing the market’s expectations. Core yearly inflation printed at 1.7% as expected and also matching the previous reading. Producer Prices were down by 0.1% in the month, and up by a modest 0.8% yearly basis.

There were no news in the Brexit/UK elections front, although the market remains confident the kingdom will avoid a hard-landing. Johnson’s Conservatives keep leading polls, and their victory will likely mean the Withdrawal Agreement will pass the Parliament. The UK will report October Retail Sales this Thursday, seen up by 0.2% in the month and by 3.7% when compared to October 2018.

The GBP/USD pair is neutral-to-bearish, holding just above the 23.6% retracement of its latest daily run. In the 4 hours chart, the pair continues hovering between the 20 and 100 SMA, while the 200 SMA continues advancing below the current level. The RSI indicator, however, heads nowhere around its midline, while the Momentum indicator turned south, entering negative territory, rather indicating absent buying interest that increased selling pressure.

Support levels: 1.2820 1.2785 1.2750

Resistance levels: 1.2895 1.2920 1.2950

AUDUSD

The Australian dollar came under selling pressure following the release of Australian Q3 wages’ growth, modestly up but well below trend since 2012. According to the official release, wages were up by 0.5% in the quarter, and by 2.2% YoY, below the previous 2.3%, also missing the market’s forecast.  The AUD/USD pair fell to 0.6828, as Asian and European indexes edged lower, bouncing just modestly with Wall Street hitting record highs. Nevertheless, news signalling that US-China trade talks may have hit a snag kept the upside limited.

Australia will release this Thursday its October employment data. The economy is expected to have added 15.0K new jobs in the month, following a 14.7K increase in September. The unemployment rate is expected to tick higher to 5.3%, despite the participation rate is foreseen steady at 66.1%. The report has little chances of changing the dominant bearish trend, even in the case of an upbeat reading. A recovery will most likely be temporal, with sellers ready to add at higher levels.

The AUD/USD is trading around the 0.6830 level, neutral-to-bearish in the short-term, as, in the 4-hour chart, a bearish 20 SMA, keeps rejecting attempts to regain the upside. Technical indicators in the mentioned chart lack directional strength but remain within negative levels. The pair is set to test the 0.6800 level and break below it on a dismal employment report.

Support levels: 0.6800 0.6770 0.6730

Resistance levels: 0.6860 0.6895 0.6930  

GOLD

After spending last week in the shadow of the trade deal news, the US inflation data which came in line with expectations and FED’s Powell speech did not impress the markets as expected. Gold suffered its biggest weekly drop in the last three years as the traders decided to focus on only the good news from the trade deal saga. On the other hand, some other news started to fuel uncertainty regarding a possible deal. However, on Wednesday both risk assets and safe havens were on a positive mood trading with modest gains.

Partly as a technical correction up, Gold managed to pick up the pace from its support level which is located at 1.446$ (1.266$-1.557$ %38.20) and at the time of the writing it’s trying to hold over previous monthly dip at 1.459$ (October low). Above this level, Gold can test 1.482$ (1.557$-1.459$ %23.6), 1.496$ (1.557$-1.459$ %38.2) and 1.500$ levels. The first support still lies 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 targeted.

 

SILVER

While Gold is unarguably a safe haven asset, apart from its jewellery usage, Silver demand also comes from its industrial usage. Nevertheless, Silver trade is usually seen alongside Gold and affected by the risk sentiment on the markets. 

At the time of the writing, silver is trying to test 17.00$ which is both psychological level and %50.0 of 14.29$-19.64$. 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 16.70$ (double dip), 16.33$ (%61.8 14.29$-19.65$), 15.55$ (%76.40 14.29$-19.65$) and 15.00$ levels.

Support Levels: 16.70$ 16.33$ 15.55$

Resistance Levels: 17.00$ 17.60$ 18.38$

 

CRUDE WTI

WTI is keeping its trading range since last week affected by the trade deal rumours and expectations from the upcoming OPEC+ meeting. As the lack of progress regarding the trade deal between the US and China now putting the markets in a wait and see mode, OPEC Secretary Barkindo expressed any assessment on the need for extra oil output cuts ahead of the key meeting next month is premature.

WTI tried to hold over an important resistance at 57.13$ (63.33$-51.03$ %50.00) multiple times since last week but failed to make a strong closing over this level. Above 57.13$, 58.63$ (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

On Wednesday trading, the USD index DXY, Wall Street and Gold were all winners although the release of important inflation data in the US. During the last FOMC where the final rate cut of 2019 was made in the US, Powell highlighted that they will be monitoring the inflation data closely to measure the effects/needs of further rate cuts. On a monthly basis, the CPI in the US came in at 0.4% and the core CPI rose to 0.2% from 0.1% in September. After the release of the data, Powell told in his testimony that the trade uncertainty has been a real distraction for business management and now they have less room for rate cuts compared with before.

Dow Jones is trying to hold in a positive field although the previous all-time high at 27.770 still looks like a hard resistance to break. 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


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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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