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Daily Market Report
20 Nov 2019

EURUSD

The EUR/USD pair has advanced slightly on Tuesday and is headed for its fourth daily gain in a row, as the dollar remains weak amid increasing skepticism on a positive outcome of the United States-China ‘phase one’ partial deal.

On Tuesday, media reports suggested that trade negotiations have stalled, weighing on market sentiment and favoring risk-off trades. Later in the day, US President Donald Trump said that he would "just raise tariffs" if the US does not strike a deal with China. He added that "China is going to have to make a deal."

On the data front, the US housing sector showed signs of improvement in October, as Housing Starts expanded 3.8% versus 0.6% expected, and Building Permits surpassed estimates expanding 5.0%. The Federal Reserve will release the minutes of its latest monetary policy minutes on Wednesday, while the European Central Bank will publish theirs on Thursday.

From a technical view, EUR/USD holds a positive short-term perspective, with indicators advancing above their midlines, although the RSI is approaching overbought levels, limiting the upward potential for the next hours. In the daily chart, the pair continues to trade just below the 100-day SMA (1.1092) and a breakout is needed to improve the daily perspective. Above this latter, the EUR/USD could pick up bullish momentum with the next resistance seen at 1.1175/77, where October’s monthly high converges with the 200-day SMA.

On the other hand, as long as EUR/USD holds above the 1.1030 zone, the bearish pressure might remain contained. A breakdown, however, could threaten the short-term positive bias and send the pair to 1.1000 first, en-route to a retest of 1.0879, 2019 low.

Support levels: 1.1050 1.1030 1.1000

Resistance levels: 1.1092 1.1175 1.1200


USDJPY

The USD/JPY pair continued to fall on Tuesday, posting its second daily loss in a row, as the lack of progress in trade negotiations between China and the United States continued to take its toll on the greenback and lifted demand for safe-havens.

During Wednesday’s Asian session Japan will release trade balance figures while the Federal Reserve will publish the minutes of its latest meeting later in the day.

The USD/JPY pair consolidates below the 20- and the 200-day SMAs, having hit a daily low of 108.45. The technical picture has turned slightly bearish according to the 4-hour chart, with indicators crossing into negative ground although lacking bearish strength. Immediate support is seen at 108.44, 200-period SMA in 4-hour chart, followed by 108.23, last week’s low. However, only a break below 107.70, 100-day SMA, could tilt the longer-term bias to the downside.

On the other hand, critical resistance is seen at 109.00. A break above this level could shift the short-term focus to the upside and send USD/JPY to the 109.50 zone, en-route to a more significant area of 109.70-90, where the 100- and 200-week SMA offer strong resistance.

Support levels: 108.20 108.00 107.75 

Resistance levels: 109.00 109.25 109.50

 

GBPUSD

Despite broad-based dollar weakness, GBP/USD retreated on Tuesday, posting its first daily loss in six, as investors remain cautious ahead of the UK election debate. UK Prime Minister Boris Johnson leader of the Conservative Party and Jeremy Corbyn leader of the Labour Party will face each other in the first-ever two-way election debate between a prime minister and leader of the opposition.

The market expects the Conservative Party to win an outright majority that would lead to ratifying the Brexit deal. On the other hand, the opposition proposes reopening the Brexit accord and then putting it to a referendum.

Technically speaking, cable has lost bullish strength in the 4-hour chart, with indicators turning south, although still above their midlines and the pair testing daily lows at the 1.2910 area. GBP/USD needs a break above the 1.3000 level – which has remained elusive over the last few weeks – to maintain focus on the upside and target the 100-week SMA at 1.3060. On the downside, the key support is seen at 1.2875, which is the 20-day SMA. A break below that level could add short-term pressure and send the pair back to November’s low at 1.2768.

Support levels: 1.2875 1.2830 1.2785 

Resistance levels: 1.3012 1.3040 1.3060


AUDUSD

The AUD/USD managed to erase Asian session losses and climbed back above 0.6800 during the New York trade, helped by a weaker greenback.

The Australian dollar came under pressure on Tuesday, with AUD/USD hitting a low of 0.6785, after minutes from the latest Reserve Bank of Australia meeting showed that the central bank did consider cutting rates amid global slowdown concerns. However, the AUD/USD managed to shrugged-off the dovish minutes and climbed to a five-day high of 0.6835.

AUD/USD technical picture has turned slightly bullish in the 4-hour chart, with indicators in positive territory and the last three candles closing above the 200-period SMA. However, the perspective is less optimistic in the daily chart, with indicators in negative territory and the AUD/USD trading below the 100-day SMA (0.6838). A breakout of this level, could send the pair to the next significant resistance at 0.6900, where the psychological level converges with a long-term descendent trendline.

On the flip side, immediate supports are seen at the 0.6800/05 area (20-period SMA in 4-hour chart), and last week’s low at 0.6770 ahead of 0.6720.

Support levels: 0.6805 0.6770 0.6720

Resistance levels:  0.6840 0.6860 0.6900


GOLD

On the second day of the trading week, Gold kept on finding support from the developments regarding the trade deal. Earlier in the US session, Bloomberg reported that the US side was softening its ground on the tariff rollback and sides were looking to use the near-deal from May as the benchmark for tariff reduction. Although these comments helped the market sentiment improve slightly, later the US President Trump stated that he will raise tariffs if they failed to reach an agreement on trade with China which supported the risk-off trade. As the risk appetite losing its charm, the USD index DXY stayed below 98 mark while the 10-year US Treasury bond yield lost around %2 on a daily basis at the time of the writing.

As long as Gold stays over 1.470$, the resistances can be followed at 1.482$ (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

Along with the risk aversion mood seen at the markets. Silver managed to hold over 17.00$ on Tuesday trading. Although the markets are getting closer to a year-end trading mood, the trade deal is dominating the risk factor in the markets. As China is willing to wait the results of impeachment and the election in the US, a possible deal might be far away than the market expects.

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 sharp sell-off in line with the increasing risk aversion seen in the markets caused by the war of words regarding the trade deal between the US and China. On the other hand, rising geopolitical tensions in the Gulf area failed to support oil prices. Data wise, the US weekly Crude Stocks data from the American Petroleum Institute (API) will offer fresh near-term trading direction among the developments regarding eh trade deal.

WTI failed to hold over the important support level of 57.13$ (63.33$-51.03$ %50.00) and tested 55.00$ level with a daily loss of %2.83 at the time of the writing. Below the 55.73$ (63.33$-51.03$ %38.20) level, the supports can be targeted at 55.00$, 53.93$ (63.33$-51.03$ %23.60) and 51.03$ (October dip). On the topside, the resistances can be followed at 55.73$ (63.33$-51.03$ %38.20), 57.13$ (63.33$-51.03$ %50.00) and 58.63$ (63.33$-51.03$ %61.80).

Support Levels: 55.00$ 53.93$ 51.03$

Resistance Levels: 55.73$ 57.13$ 58.63$


DOW JONES

Dow Jones tried to improve its all-time high on Tuesdays supported by the improved risk appetite in the market open. However, the sentiment reversed quickly with the comments from the US President Trump about the trade deal. Trump stated that he will raise tariffs if they failed to reach an agreement on trade with China which supported the risk-off trade. Although the negative comments, the index is still hovering around its top range as the markets gear up for year-end trading with a possible rally. On the data front, markets will be following the FOMC minutes which will be released tomorrow.

As the index tested 28.090 as its all-time high level and retraced back, the daily RSI(14) also retraced from its overbought zone. 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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