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Daily Market Report
19 Nov 2019

EURUSD

EUR/USD advanced for the third day in a row on Monday and struck an 11-day high as the dollar came under further pressure amid reports that Chinese officials are pessimistic about a trade deal with the United States. According to media reports, China doubts a ‘phase one’ deal could be signed given US President Trump's reluctance to roll back some tariffs, which China thought the US had agreed to.

Trade deal concerns translated into lower US yields, falling stocks, a weaker greenback, and higher demand for safe-havens in financial markets.

On the data front, October’s US housing starts will be released on Tuesday, while investors should be closely following the release of the Federal Reserve's latest meeting minutes on Wednesday and the European Central Bank minutes on Thursday. ECB President Christine Lagarde is due to speak in Frankfurt later in the week. However, investors’ sentiment would likely remain driven by US-China trade negotiations headlines.

From a technical point of view, the EUR/USD perspective has turned bullish according to technical indicators in the 4-hour chart, with the pair trading close to its 11-day peak of 1.1089 hit during the New York session. However, the RSI has reached overbought levels, favoring a phase of consolidation before another upward leg. Even though the technical picture has also improved in the daily chart, EUR/USD remains capped by the 100-day SMA currently at 1.1094, which is the key resistance level to overcome. Above this level, the pair could gather bullish momentum with the next target at the 1.1175/1.1180 area, where October’s monthly high converges with the 200-day SMA.

On the flip side, key short-term support is seen at the 1.1030 area as a breakdown could lead to renewed weakness toward 1.1000, en-route to 2019 lows.

Support levels: 1.1050 1.1030 1.1000

Resistance levels: 1.1089 1.1175 1.1200


USDJPY

The USD/JPY pair fell on Monday, retreating from levels above 109.00, amid pessimism over the US-China trade deal, which weighed on the US dollar and prompted demand for safe-haven assets, including the Japanese yen.

On Monday, Fed Chairman Jerome Powell met with US President Donald Trump and Treasury Secretary Mnuchin. According to a tweet from Trump, they discussed “everything,” including interest rates, negative interest, low inflation, easing, dollar strength, and its effects on manufacturing and trade.

USD/JPY faced pressure and, unable to hold above the 200-day SMA, dropped from a daily peak of 109.07 to a low of 108.50. The technical picture remains neutral, with the pair trading within its recent range and indicators flat in the 4-hour chart. In the daily chart, USD/JPY consolidates between the 100-day SMA, offering dynamic support at 107.70, and the 200-day SMA acting as resistance at 109.00. The pair would need a break of either side of this range to determine a longer-term bias.

On the upside, a breakout of 109.00 could lift the pair towards the 109.50 zone, ahead of the more significant area of 109.70-90, where the 100- and 200-week SMA offer strong resistance. On the downside, immediate support stands at last week’s low of 108.23, followed by the 108.00 psychological level.

Support levels: 108.20 108.00 107.75 

Resistance levels: 109.00 109.25 109.50


GBPUSD

The British pound strengthened on Monday and reached a four-week high versus the US dollar as recent polls suggested Prime Minister Boris Johnson's Conservative Party extended its lead in UK general election campaign.

According to the BBC’s general election poll tracker, the average of polls shows the Conservative Party surpassing 40%, the highest level since the election was announced. That is 12 percentage points ahead of the main opposition party, the Labour Party, led by Jeremy Corbyn.

On Monday, the UK Prime Minister said he would abandon his plan to cut corporate taxes and instead would use the funds – around £6 billion – in public services, including the National Health Service, weighing slightly on the Cable.

Even though GBP/USD retreated slightly from its four-week high of 1.2985 and currently trades around 1.2965, the technical picture remains bullish in the 4-hour chart, with indicators in positive territory while the 20 and 100-period SMA have made a bullish cross. However, the RSI has reached overbought levels, suggesting the pair might take a breather before resuming the upward move.    

Perspective also remains constructive in the daily chart, with October’s high at 1.3012 as major resistance level to overcome, followed by a less significant level at 1.3040, and then the 100-week SMA at 1.3060.

On the other hand, immediate support stands at the 20-day SMA at 1.2873 and the former resistance level at 1.2830. However, as long as GBP/USD holds above 1.2700, the bias would remain tilted to the upside.

Support levels: 1.2873 1.2830 1.2785 

Resistance levels: 1.3012 1.3040 1.3060

 

AUDUSD

The AUD/USD pair is poised to close the day virtually unchanged, having traded within its Friday’s range, unable to pick up momentum, torn between broad-based dollar weakness and the risk aversion environment. AUD/USD held up pretty well despite the risk-off sentiment – sparked by renewed pessimism of a trade deal between the US and China.

During Tuesday's Asian session, the Reserve Bank of Australia will publish the minutes of its November 5th meeting, when the Board decided to leave the cash rate unchanged at 0.75%.

Even though the technical picture has improved slightly, according to the 4-hour chart, the broader bias remains tilted to the downside. Currently trading at the 0.6815 area, the 100-day SMA at 0.6840 is the immediate resistance to overcome, although only a breakout of 0.6900 – descendent long-term trend line – would ease the bearish pressure. On the downside, the 20-period SMA in the 4-hour chart at 0.6805 is the first support area to clear, followed by last week’s low at 0.6770.

Support levels: 0.6805 0.6770 0.6720

Resistance levels:  0.6840 0.6860 0.6900


GOLD

As the possible developments regarding the trade deal between the US and China remain the only market mover now, the risk assets are trading in the mercy of news flow about a possible deal. While the bias is on the positive side, there are still grey areas. The parties still do not have a deal on the transfer of intellectual property and technological solution rights. Also, China hasn’t yet decided on the number of agricultural commodities to be bought from the USA which looms over a deal. Also, after the constructive comments from the US side on Friday, today some negative comments hit the wires from the China front. Due to a Chinese a government source, CNBC's Beijing Bureau Chief, Eunice Yoon, on Monday said China was not optimistic about reaching a trade deal with the US and claimed that China would wait for the impeachment and the election in the US while focusing on supporting its own economy.

On the first day of the trading week, the USD index DXY kept it’s momentum down and slid below 98 level and the US treasury bond yields fell sharply. Before the negative news, Gold tested 1.459$ (October low) but managed to pick up the pace. As long as Gold stays over 1.470$, the resistances can be followed 1.482$ (1.557$-1.459$ %23.6), 1.496$ (1.557$-1.459$ %38.2) and 1.500$ levels. Below the 1.459$ (October low) level, the supports are lined at 1.446$ (1.266$-1.557$ %38.20), 1.411$ (1.266$-1.557$ %50.0) and 1.377$ (1.266$-1.557$ %61.80).

Support Levels: 1.459$ 1.446$ 1.411$

Resistance Levels: 1.482$ 1.496$ 1.500$

 

SILVER

According to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday, large precious metals speculators lowered their bullish net positions in the Silver futures markets for a second week back to back in line with the increasing risk appetite seen on the markets. On Monday, alongside Gold, Silver managed to pick up pace alongside negative comments from China regarding the trade deal.

Silver is trying to hold over 17.00$ on Monday trading with the help of negative comments about the trade deal. Above 17.00$, which is both psychological level and %50.0 of 14.29$-19.64$, 17.60$ (%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 had a hard day giving away it’s Friday gains. As the previous move up supported by the positive comments regarding the trade deal between the US and China, Monday’s move down also came with the negative comments from China. The heavy sell-off came although the Joint Organizations Data Initiative (JODI) on Monday reported that Saudi Arabia's crude oil exports fell to 6.67 million barrels per day (BPD) in September from 6.88 in August which suppose to support WTI. Along with the expectations from the trade deal and OPEC+ meeting, weekly crude stock data will be followed by the traders.

WTI failed to protect 58.00$ level and retraced heavily to mid 56.00$ level at the time of the writing on Monday trading.As long as the WTI stays over 57.13$ 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

Dow Jones spent most of the day literally suspended looking for a catalyst for a move. Last Friday the index was supported by the positive comments from the US side and tested a new all-time high at 28.000 level. However, on Monday the index did not react to negative news from China and protected itself trading in a narrow range. Apart from the trade deal saga, another important event will the release of the FOMC minutes on Wednesday where the traders will read the details of the FED’s latest interest rate decision. 

Over the 28.000 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: 28.000 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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