Contact Us:  

Daily Market Report
03 Dec 2019

EURUSD

The financial world came back to life this Monday, and the American dollar took the worst out of it.  Concerns about trade sent Wall Street plummeting but also weighed on the greenback, with the EUR/USD pair jumping to 1.1089. Disappointing US data added to the greenback’s bearish case, with tensions cooling just modestly mid-US afternoon.

Upbeat Chinese data put the market in risk-on mood at the beginning of the week, but the sentiment turned sour as China said it won’t allow the visit of US military to Hong Kong and announced sanctions against several US non-government organizations for encouraging protesters. The sentiment worsened after US Wilbur Ross said in an interview that US President Trump will lift tariffs to China in the case of no deal. Even further, Trump announced tariffs to base metals’ imports coming from Brazil and Argentina. The US reported later in the day that phase one of the trade deal was being written, yet the damage was already done.

 The main catalyst for the dollar’s broad weakness, however, was the November ISM Manufacturing PMI, which plummeted to 48.1 below the previous and the expected. The macroeconomic calendar will be lighter for these two economies for Tuesday, but for sure, trade-related headlines will keep coming, determining major’s direction.

The EUR/USD pair is ending the day above 1.1065, the  38.2% retracement of its October rally. Last week, the pair briefly pierced the 61.8% retracement of the same run, and steady gains from here should be taken as a bullish hint. The 4-hour chart shows that the pair is now battling with a directionless 200 SMA after overcoming its 20 and 100 SMA, while technical indicators keep heading north well into positive ground, keeping the risk skewed to the upside. The pair could suffer a sharp U-turn if tensions persist, with the risk flipping to the downside on a break below 1.1030.

Support levels: 1.1065 1.1030 1.0985

Resistance levels: 1.1090 1.1120 1.1150 

USDJPY

The USD/JPY pair lost the 109.00 threshold and heads into the Asian a couple of pips below the figure, after hitting at the beginning of the day a fresh multi-month high of 109.72. The pair rallied on a better market mood coupled with encouraging Chinese data, but collapsed on poor US data and fears the US and China could back off a trade deal, following comments from different representatives from both economies. Mid-US afternoon, news indicate that the document on phase one was being written, but speculative interest preferred to ignore it.

 At the beginning of the day, Japan released Q3 Capital Spending, which increased to 7.1% from 1.9% in the previous quarter, while the November Jibun Bank Manufacturing PMI improved to 48.9 from 48.6. This Tuesday, the country will only publish the November Monetary Base, seen up by 2.6% when compared to the previous month.

The USD/JPY pair is short-term bearish according to the 4-hour chart, as it collapsed below its 20 SMA, which is now turning south, and about to challenge a directionless 100 SMA, first time near this last in over a week. Technical indicators, in the meantime, head south near oversold readings, barely losing their bearish momentum. The decline will likely accelerate on a break below 108.80, the immediate support.

Support levels:  108.80108.50 108.20

Resistance levels: 109.30 109.60 109.90 

GBPUSD

The Sterling Pound was the worst performer against the dollar this Monday, affected by weekend news indicating that Conservatives lead ahead of the December 12 election continues shrinking and pointing to a possible hung Parliament. Although the market was in a positive mood, the GBP/USD pair gapped lower at the weekly opening, extending its decline to 1.2895 during London trading hours.

The UK Markit Manufacturing PMI came in better than anticipated in November, at 48.9, although failed to boost the Pound. Dismal US data, on the other hand, helped it close the weekly opening gap, yet the pair is trading at Friday’s closing level, clearly indicating that the UK currency depends solely on Brexit. This Tuesday, the UK calendar includes November BRC Like-for-Line Retail Sales, seen down by 1.7% after posting a modest 0.1% advance in the previous month.

The GBP/USD pair is neutral-to-bullish according to the 4-hour chart, as the pair is currently developing above all of its moving averages, although the 100 and 200 SMA are now converging below the 20 SMA, suggesting decreasing upside potential. Technical indicators hold above their midlines, the Momentum heading marginally higher but the RSI flat, also suggesting decreasing buying interest.

Support levels: 1.2915 1.2880 1.2845

Resistance levels: 1.2950 1.2990 1.3020

AUDUSD

The AUD/USD pair is trading at around 0.6820 by the end of the American session, its highest in over a week. The Australian currency got boosted by better-than-anticipated Chinese data, as following upbeat official PMI released during the weekend, the Caixin Manufacturing PMI improved to 51.8 in November, also above the market’s expectations. Australian data, in the meantime, was mostly negative, failing to impress. The TD Securities Inflation estimate for November was at 1.5% YoY, while Building Permits plummeted by 8.1% in October and by 23.6% when compared to a year earlier.

The Reserve Bank of Australia is having a monetary policy meeting this Tuesday, although the central bank is expected to remain on hold this time. More relevant, the country will release its latest growth figures on Wednesday, which will probably have a more relevant effect on the Aussie.    

The pair is currently trading at around the 38.2% retracement of its November decline, poised to extend its advance, according to technical readings in the 4-hour chart, although the next directional move will depend on how the market takes the RBA announcement. The pair is now developing above its 20 and 100 SMA, this last still heading lower, although technical indicators hold near overbought readings, consolidating its intraday advance.

Support levels: 0.6800 0.6770  0.6730  

Resistance levels: 0.6835 0.6860 0.6890

GOLD

Gold had an indecisive session on Monday as mixed reports keep coming regarding the phase one of the trade deal which affects the risk sentiment heavily. On the other hand, better than expected Chinese manufacturing PMI supported the risk-on mood alongside the positive comments about a deal almost done. Wei Jianguo, who is a former Chinese Vice Minister of Commerce and Executive Deputy Director of the China Center for International Economic Exchanges, stated to Global Times that he is confident and optimistic that China and the US can reach a phase one trade deal. The phase one deal will include intellectual property protection, financial opening, and agricultural products purchasing. But the most essential problem is to lift the tariffs. On the other hand, Wilbur Ross, The United States Secretary of Commerce also said that the US will increase tariffs if there is no China deal should not come as any surprise while US advisor, Conway, said a phase one of China trade deal is being written up. However, what markets are figuring, is that that's all well and good, but it's being written up while walking through a minefield of ticking time bombs.

As the markets are experiencing both positive and negative comments at the same time, Gold had a choppy session on the first day of the trading and ended the day almost virtually unchanged in an 11$ trading range per ounce. 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) while 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).   

Support Levels: 1.459$ 1.446$ 1.411$

Resistance Levels: 1.482$ 1.496$ 1.500$

 

SILVER

Silver is battling hard to protect its important 17$ level in the light of the risk events associated with the trade deal between the US and China. As a contrary move, better than expected Chinese manufacturing PMI did not help the silver trade although it’s wide use in industrial production. The white metal is in a consolidation mode looking for clues to move in both ways.

16.97$ (%50.0 14.29$-19.65$) still stands as critical support. Below this level, a test of 16.33$ (%61.8 14.29$-19.65$) and 15.55$ (%76.40 14.29$-19.65$) can be targeted. On the top side, the resistances are lined at 17.60$ (%38.20 14.29$-19.65$), 18.38$ (%23.6 14.29$-19.65$) and over that 18.70$.

Support Levels: 16.97$ 16.33$ 15.55$

Resistance Levels: 17.60$ 18.38$ 18.70$

 

CRUDE WTI

After Friday’s catastrophic decline, WTI managed to gain back some of its losses on the first day of the trading week. However, this move can be considered as a technical correction rather than a shift in sentiment. On the other hand, due to a report published by the Wall Street Journal, Saudi Arabia will push for an extension to OPEC oil output cuts through mid-2020, an effort to prop up Aramco’s IPO share price. Also, Iraqi officials said on the weekend that OPEC+ will consider deeper cuts such as 400k bpd.

From a technical point of view, 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

As the holiday mood fades away, the risk-off mood started to dominate the market in the light of worse than expected US macro data and comments from the US officials regarding the trade deal. The ISM  Manufacturing PMI came at 48.1, failed to meet the expectations at 49.2 and even lower than the previous reading which was at 48.3 while Chinese data beat the expectations and moved to the expansion territory for the first time since April. Wall Street gave away their gains and retraced back from their all-time high levels while the USD index DXY slid below 98 level. Apart from the trade deal developments, the markets will wait for the outcome of the US labour market data on Friday.

Over 28.000 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

 

MACROECONOMIC EVENTS

Do you have any questions?

Our Customer Services team is here to help you.

Get in touch 24 hours a day, 5 days a week:

 

* 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.

All News & Analysis provided by:

Disclaimer: NCM Investment is a subsidiary and service provider of Amwal International Investment Company. The material contained here does not contain (and should not be construed as containing) investment advice or an investment recommendation, or, an offer of or solicitation for, a transaction in any financial instrument. NCM Investment accepts no responsibility for any use that may be made of these comments and for any consequences that result. This communication must not be reproduced or further distributed. All information in this publication has been compiled from publicly available sources that are believed to be reliable; however, we cannot guarantee the accuracy of all information. All information and documentation associated with this report have been produced for the purposes of providing the report only.

Please remember that trading financial markets carry a high degree of risk to your capital. It is possible to lose more than your initial stake. Leveraged products may not be suitable for all investors, therefore please ensure you fully understand the risks involved and seek independent advice if necessary.

All Rights Reserved © NCM Investment