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Daily Market Report
26 Nov 2019

EURUSD

The week has started with the greenback appreciating against most major rivals, on the back of another peak of optimism related to the US-China trade relationship. The latest news indicated that the Chinese government said it would raise penalties on intellectual property theft on Sunday, something the US has been demanding for long. The EUR/USD pair traded as low as 1.1003, now hovering around 1.1010 ahead of the Asian opening.

Germany released the November IFO survey, with the Business Climate printing at 95 as expected. The assessment of the current situation also matched the market’s forecast with 97.9, although expectations were a miss, hitting 92.1. The US, on the other hand, published the October Chicago Fed National Activity Index, which came in worse than anticipated at -0.71, and the Dallas Fed Manufacturing Business Index for November, which improved to -1.3. Data failed to impress, although poor German figures dented demand for the Euro.

This Tuesday, Germany will release the December GFK Survey, seen unchanged at 9.6. The US will publish some minor figures and the CB Consumer Confidence survey, expected to have bounced from 125.9 to 126.9.

The  EUR/USD pair is technically bearish, although it would need to clearly break below 1.0990 to confirm additional slides ahead. The level stands for the 61.8% retracement of its October rally, while November’s monthly low stand at 1.0988. The 4-hour chart shows that the pair has extended its decline below all of its moving averages, with the 20 SMA accelerating south below the larger ones. The Momentum indicator has barely bounced from oversold readings while the RSI consolidates just above its 30 line, all of which keeps the risk skewed to the downside.

Support levels: 1.0985 1.0950 1.0915

Resistance levels: 1.1030 1.1065 1.1100

USDJPY

The USD/JPY pair has flirted with the 109.00 figure this Monday, ending the day not far below it. The dollar benefited from headlines coming from China, as the country announced it would raise penalties on IP thief, addressing one of the sticking points in its trade relationship with the US. Stocks were firmly up worldwide, although government debt yields were modestly lower daily basis, limiting the bullish potential of the pair.

Japan released the final version of the September Leading Economic Index, which was downwardly revised to 91.9, missing the market’s expectations of 92.2. The Coincident Index for the same month came in at 101.1, slightly better than expected. There are no macroeconomic releases scheduled for this Tuesday.

The USD/JPY pair is offering a neutral-to-bullish stance in its 4-hour chart, as it managed to advance above all of its moving averages, which slowly gain strength upward. Technical indicators have advanced within positive levels, but lost momentum mid-US afternoon, now consolidating. The risk is skewed to the upside, although the pair would need to take the 109.10 level to be able to extend its rally toward the 110.00 figure.

Support levels: 108.60 108.20 107.90  

Resistance levels: 109.10 109.40 109.75

GBPUSD

The Pound was the exception to the rule, gapping higher at the weekly opening and surging against the greenback to 1.2911 during US trading hours. The positive momentum of the UK currency was backed by renewed optimism related to Brexit, as weekend polls showed that Conservatives continued leading voting intentions. The GBP/USD pair shed some 30 pips mid-American afternoon, following the release of a survey from ICM/Reuters, which showed the Conservatives at 41% and Labour at 34%, with Conservatives lead narrowing from over 10% to 7%.

The UK released earlier today the CBI Distributive Trade Survey on realized sales, which improved in November to -3% from the previous -10%. This Tuesday, the kingdom’s calendar will remain light, with the only figure scheduled being the October BBA Mortgages Approvals.

The GBP/USD pair is trading in the 1.2890 region by the end of the American session,  neutral in the short-term, as, in the 4 hours chart, the price is battling with directionless 20 and 100 SMA, but above a bullish 200 SMA. Technical indicators lack directional strength, although the Momentum is leaning lower within negative territory, while the RSI steadies around its mid-line. The pair has managed to recover from the 1.2810 price zone, where it has a critical Fibonacci support. Slides will likely remain contained as long as the price holds above this last.

Support levels: 1.2860 1.2810 1.2770  

Resistance levels: 1.2920 1.2950 1.2985

AUDUSD

The AUD/USD pair fell to 0.6767, its lowest in over a month, to close the day a handful of pips above this last. The encouraging news coming from the US-China trade front backed the Aussie at the beginning of the day, although the pair met strong selling interest once it neared the 0.6800 level, maintaining the negative stance throughout the last two trading sessions of the day.

There are no macroeconomic figures scheduled in Australia this Tuesday, although RBA’s Governor Lowe will be delivering a speech titled “Some Lessons from Overseas.” Lowe is not expected to comment on the current monetary policy, although any comment on the economic situation could move the Aussie.

The AUD/USD pair is bearish according to the 4-hour chart, as a firmly bearish 20 SMA capped the upside while accelerating its decline below the larger ones. Technical indicators have settled at daily lows, maintaining the risk skewed to the downside. The current 0.6770 price zone has proved to be a strong static support, and renewed selling interest below it would likely expose the 0.6700 price zone.

Support levels: 0.6770 0.6730 0.6700

Resistance levels: 0.6800 0.6835 0.6860  

GOLD

On the first day of the trading week, the risk appetite improved with the positive news flow from the trade deal front. China said it will increase penalties for intellectual property violations, supporting hopes of a trade deal and also, the Chinese media said both countries are very close to a phase-one trade deal. "The two sides have basically reached broad consensus for the phase one agreement," Gao Lingyun, an expert at the Chinese Academy of Social Sciences in Beijing who is close to the trade talks, told the Global Times. With the improved expectations regarding phase one deal, Gold kept its move south for four days straight while the global indexes are edging higher and the US index is well over 98 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). On the other hand, 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 in case of a close over 1.459$ (October low).  

Support Levels: 1.459$ 1.446$ 1.411$

Resistance Levels: 1.482$ 1.496$ 1.500$

 

SILVER

While Silver slid below important 17.00$ with the improved risk appetite based on the positive comments about phase one deal between China and the US, Silver speculators advanced their bullish bets for 1st time In 3 Weeks according to  Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday. A possible increase in the demand for Silver for industrial applications with the trade deal might be the reason for the move as Gold is seen only as a safe haven for trading. 

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 while above the 17.00$, which is both psychological and %50.0 of 14.29$-19.64$, 17.60$ (%38.20 14.29$-19.65$) and 18.38$ (%23.6 14.29$-19.65$) can be targeted.

 Support Levels: 16.70$ 16.33$ 15.55$

Resistance Levels: 17.00$ 17.60$ 18.38$


CRUDE WTI

WTI had a choppy session on Monday testing the support level at 57.13$. However, WTI managed to escape from its daily low levels and almost unchanged on a daily basis. The US energy-related high yield bond spread has widened to 826 basis points, the highest level since 2016 which indicates a big sell-off might be on the table as seen back in 2016. Like all assets linked to industrial production, Oil trade is expected to be dominated by the trade deal and also upcoming OPEC+ meeting.

The resistances are lined at 58.63$ (63.33$-51.03$ %61.80), 59.64$ (76.88$-42.40$ %50.00) and 60.00$ levels while the supports are followed at 57.13$ (63.33$-51.03$ %50.00), 55.73$ (63.33$-51.03$ %38.20) and 50.00$ levels.

Support Levels: 57.13$ 55.73$ 50.00$

Resistance Levels: 58.63$ 59.64$ 60.00$


DOW JONES

As the trade deal process is underway with both positive and negative comments from both sides affecting the year-end trading. With the improved risk appetite, Dow Jones tried to improve its move up and stay over 28.000 level. Also, the classic Christmas rally expectations might be supporting the index alongside positive comments about the phase one deal. The Global Times on Monday reported that China and the US were moving closer to concluding phase one of the trade deal despite some media reports suggesting the opposite. Additionally, over the weekend, China has announced its decision to increase penalties on intellectual property (IP) in an effort to please the US ahead of next round of face-to-face talks.

Dow Jones tried to hold over the physiological level at 28.000 on Monday trading. Over this level, 28.400 can be followed as new record highs while below 27.770 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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