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Daily Market Report
28 Nov 2019

EURUSD

The EUR/USD pair traded as low as 1.0991 this Wednesday, a fresh 2-week low, as a bunch of first-tier US data surprised to the upside. Nevertheless, there were no fireworks, as uncertainty surrounding the US-China trade deal, and a long weekend in the US sent trading volumes to record lows. US markets will be closed this Thursday amid the celebration of Thanksgiving, while they are due to close earlier on Friday.

The US released the second estimate of Q3 Gross Domestic Product, which surprised to the upside with 2.1%.  Durable Goods orders were up by 0.6% in October, largely surpassing the market’s expectation of -0.8%. Also, weekly unemployment claims declined to 213K in the week ended November 22, better than the 221K expected. Dollar’s strength cooled with core PCE inflation, which slid to 1.6% YoY in October and disappointing Pending Home Sales, which fell by 1.7% in October.

There US won’t release relevant data this Thursday, while the EU will publish the November Economic Sentiment Indicator, seen at 101 vs. the previous 100.8, while Germany will unveil preliminary November inflation seen down by 0.7% monthly basis and up by 1.2% when compared to a year earlier.

The  EUR/USD pair has flirted with the 61.8% retracement of its October rally before stabilizing around 1.1000, where it stands heading into the Asian opening. The risk remains skewed to the downside, according to the 4-hour chart, as the price continues developing below all of its moving averages, with the 20 and 100 SMA accelerating their declines. Technical indicators lack directional strength, the Momentum within neutral levels, and the RSI near oversold readings. Given the low volumes expected ahead of the weekend, the pair could falsely break the 1.0990 support area without actually triggering a bearish extension.

Support levels: 1.0985 1.0950 1.0915

Resistance levels: 1.1030 1.1065 1.1100

USDJPY

The USD/JPY pair jumped to its November’s high, rallying in the US afternoon, following the release of solid US data indicating steady economic growth. Additionally, Wall Street remained in the green, and while indexes’ rallies were not too relevant, they flirted with all-time highs. Safe-haven assets remained out of the speculative radar, and even Treasury yields managed to post intraday gains.

Japan will release October Retail Trade during the upcoming Asian session, seen flat monthly basis and down by 4.4% when compared to a year earlier. Large Retailers’ Sales in the same month are expected to post a modest 1.2% advance after rising by 10% in the previous month.

The USD/JPY pair is trading just below 109.50, retaining its short-term bullish stance. Technical readings in the 4-hour chart support additional gains ahead, as the pair has moved well above all of its moving averages, while the 20 SMA accelerated above the larger ones. Technical indicators lack momentum but remain well into positive ground, with the RSI, in fact, consolidating in overbought territory. Pullbacks should be contained by buyers in the 109.10/20 price zone to support a test of the 110.00 figure in the upcoming sessions.

Support levels: 109.15 108.85 108.50  

Resistance levels: 109.85 110.05 110.40

GBPUSD

The GBP/USD pair has fallen to 1.2859 early London session, as the American dollar was generally stronger. The Sterling, however, recovered on polls indicating an average 12 points lead from Tories, with the pair jumping to 1.2911 on reports indicating that the YouGov MRP poll shows a “significant” Tories’ majority. The so-called MRP poll, which correctly predicted the result of the 2017 election, will be out at the beginning of the upcoming Asian session. A victory from Boris Johnson’s party will mean higher chances of his Brexit deal passing the Parliament. The GBP/USD pair jumped above 1.2900 with the headline, reaching fresh weekly highs just above the 1.2910 level.

The GBP/USD pair is holding on to daily gains, with a modest bullish stance according to the 4-hour chart, as it has moved above all of its moving averages, while technical indicators advance, the Momentum within neutral levels and the RSI firming up in positive territory. Chances are that the rally would continue should the mentioned survey shows that Tories’ advance is larger than the 12 points average that made the round these days.

Support levels: 1.2880 1.2840 1.2810

Resistance levels: 1.2920 1.2950 1.2990

AUDUSD

The AUD/USD pair traded lifeless at around 0.6780 throughout this Wednesday, trapped between broad dollar’s strength and resurgent demand for high-yielding assets. Australia released Q3 Construction Work Done at the beginning of the day, which decreased by less than expected, down by 0.4% vs. the forecasted -1.0% decline. The market, however, has chosen to remain away from the Aussie ahead of clearer news related to the US-China trade war. During the upcoming Asian session, the country will release Q3 Private Capital Expenditure, seen at -0.1% after printing -0.5% in the second quarter of the year.

The AUD/USD pair is neutral-to-bearish according to the 4-hour chart, as it remains capped by selling interest aligned around a bearish 20 SMA. The 100 SMA, meanwhile, has extended its decline below the 200 SMA, while technical indicators remain directionless within negative levels. The pair continues holding jut above the 0.6770 price zone, a mid-term static support, and could extend its decline toward 0.6700 once it clearly breaks below it.

Support levels: 0.6770 0.6730 0.6700

Resistance levels: 0.6800 0.6835 0.6860  

GOLD

On Wednesday, Gold failed to keep its momentum up which was considered as a technical correction as the latest developments regarding the trade deal was supporting the opposite direction for trading. On Tuesday, the news hit the wires stating the US-China trade conflict revealed that sides were very close to finalizing phase one of the trade agreement and allowed Wall Street's main indexes to climb to fresh all-time highs with the improved risk appetite. Also, broad USD strength did not help Gold and put extra pressure on the yellow metal pushing it below the October dip which is at 1.4.59$.

Below the 1.459$ (October dip), 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: 1.446$ 1.411$ 1.377$

Resistance Levels: 1.459$ 1.482$ 1.496$

 

SILVER

Silver was also under pressure on Wednesday trading alongside Gold after a technical attempt to stay over 17.00$ level. With the improved sentiment about the trade deal and global USD strength, Silver gave away half of its gains made the previous day. Also from the demand side, Thailand’s silver jewellery fabrication is about to record a fourth consecutive annual decline in 2019 which is an indication of the slowing demand in global markets.

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 if Silver stays over 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

As the stock and production data from the US hit the wires, WTI erased all this weeks gains and slided below 58.00$ level on Wednesday. The EIA reported that crude oil stocks in the US increased by 1.6 million barrels in the week ended November 22nd, compared with market expectation for a draw of 418,000 barrels. Also, the crude production rose 100,000 barrels per day (bpd) to a fresh record high of 12.9 million bpd to further weigh on the WTI. On the OPEC side, as we came close to the meeting which will be between 5th and 6th of December in Vienna, the expectation of a deeper production cut is fading away which puts extra pressure on oil.  

WTI again failed to break its resistance at 58.63$ (63.33$-51.03$ %61.80) for the fourth time since last week and retraced back to 58.00$ level. 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

Dow Jones spent last four trading days with consecutive gains and managed to refresh its all-time high with a small margin on Wednesday. While the markets are chearful with the latest positive comments about the trade deal, according to CNBC today, sources had warned that the Chinese were concerned over Trump's earlier comments this month whereby he said that there was no agreement on phasing out tariffs. The Chinese are also carefully looking at the political situation in the U.S. including the impeachment hearings and the presidential election, according to CNBC's Chinese sources. On the macra data front, the US released the second estimate of Q3 Gross Domestic Product, which surprised to the upside with 2.1%.  Durable Goods orders were up by 0.6% in October, largely surpassing the market’s expectation of -0.8%. However, core PCE inflation in the US slid to 1.6% YoY in October and kept on staying below FED’s target of 2.0%. The markets will be closed on Thursday due to Thanksgiving holiday.

Over 28.000 levell, 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: 28.400  29.000 30.000

 

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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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