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Daily Market Report
26 Dec 2019

EURUSD

The EUR/USD pair peaked at 1.1095 this Monday, up with Wall Street’s opening, recovering from a daily low of 1.1069. Trading was choppy across the board, with the dollar appreciating during European trading hours, but changing course afterward. A dismal US Durable Goods Orders report was initially ignored by the market’s participants, but it later took its toll on the greenback. According to the official release, orders plummeted  2% in November, well below the expected 1.5% advance. Non-defense Capital Goods Orders were up by 0.1%, also below the latest market’s expectation of 0.2%. New Home Sales, released later in the day, was up by 1.3%, better than the 0.3% decline expected.

There were no macroeconomic releases in Europe, and the calendar will remain empty for the Union until next Friday. The US will release this Tuesday the Richmond Fed Manufacturing Index for December, seen at 9 vs. the previous -1.

The EUR/USD pair has managed to bounce after another approach to the 61.8% retracement of its December rally at 1.1065, to end the day around the 50% retracement of the same advance at 1.1090. In the 4-hour chart, the pair remains below a bearish 20 SMA that approaches a mild-bullish 100 SMA, this last converging with the daily high. Technical indicators remain within negative levels without clear directional strength.  The pair has a relevant Fibonacci resistance at 1.1120, while a relevant support comes at 1.1065. Large stops are suspected below this last, and if those are triggered, the pair can near 1.1000 before paring its slump.

 Support levels:  1.1065  1.1020 1.0970

Resistance levels: 1.1120 1.1150 1.1180 

USDJPY

The USD/JPY pair was unable to attract investors this Monday, having spent the day hovering around 109.40. The pair tried to advance at the beginning of the day, surpassing its Friday’s high by a couple of pips, to reach 109.53, but quickly changed course. The pair got trapped between during the last trading session of the day between a weaker dollar and rallying equities, with Wall Street reaching fresh all-time highs.

 Japanese data released at the beginning of the day failed to impress, as the All Industry Activity Index fell by 4.3% in October, missing the market’s expectation of a 0.2% advance. The October Leading Index was downwardly revised to 91.6 while the Coincident Index for the same month was revised higher to 95.3. During the upcoming Asian session, the BOJ will release the Minutes of its latest meeting.

The USD/JPY pair retains a mild-negative stance, as, in the 4-hour chart, it spent the day below its 20 SMA, which slowly grinds lower. Technical indicators in the mentioned chart hold within negative levels, the Momentum indicator is heading modestly higher but the RSI flat at around 50. The pair is expected to remain confined to the 108.90/109.70 range, although a break of any of these extremes could result in a wide directional movement, exacerbated by the limited volumes.

Support levels: 109.20 108.90 108.60

Resistance levels 109.70 110.00 110.40

GBPUSD

The GBP/USD pair fell to 1.2904, its lowest level since December 2, following UK PM Johnson’s victory on Brexit, after the Withdrawal Agreement Bill, finally got parliamentary support. The news was taken as pound-negative, as PM Johnson seems determined to pull the UK out of the Union at whatever cost, included a hard-Brexit. Fears surged after Johnson made it unlawful for the government to extend the trade talks into 2021.

US President Trump added to the ongoing tensions by warning Johnson not to include climate change in future trade talks with the EU. Meanwhile, Irish PM Varadkar indicated that the Prime Minister is embarking on a “harder Brexit than we anticipated.” The UK macroeconomic calendar will remain empty throughout the week.

The GBP/USD pair is technically bearish, trading around 1.2930 ahead of the Asian opening. The 4-hour chart shows that the decline accelerated once the pair pierced the 200 SMA, now trading below all of its moving averages and with the 20 SMA heading sharply south. The RSI indicator is flat around 28, while the Momentum indicator recovered just modestly, still well below its mid-line, both reflecting the current bearish pressure.

Support levels: 1.2895 1.2860 1.2830

Resistance levels: 1.2970 1.3000 1.3025  

AUDUSD

The Australian dollar is among the best performers against the greenback this Monday, with the pair peaking at 0.6928, holding on to modest daily gains above the 0.6900 figure ahead of the Asian opening. News that the US and China will “soon” sign phase one of a trade deal underpinned the Aussie, later helped by the solid performance of US equities, with the three major indexes reaching fresh all-time highs.

Australian data released at the beginning of the day missed the market’s expectations, as the Private Sector Credit was up by 0.1% in the month, and by 2.3% when compared to a year earlier. Australian markets will be closed this Tuesday, due to the Christmas holiday.

The AUD/USD pair clings to its bullish stance in the short-term, as, in the 4-hour chart, it moved further above all of its moving averages, which retain their bullish slopes. Technical indicators in the mentioned chart hold at weekly highs, the Momentum indicator still heading north, and the RSI consolidating just ahead of 70. The pair has stalled its advance at a critical resistance area, which chances of further depending on its ability to break through the 0.6900 price zone

Support levels: 0.6865 0.6830 0.6800

Resistance levels: 0.6935 0.6970 0.7000

GOLD

Although the Santa Claus rally seen in Wall Street with improved risk sentiment, Gold also kept its way up and benefited weak USD. The US Durable Goods Orders (MoM) for November arriving -2.0% vs an estimated 1.5% and prior 0.5%, missing the expectations with a big margin pressured the USD on Monday trading. On the trade deal front, it was announced by the finance ministry that China will lower import tariffs on over 850 products from Jan. 1, including frozen pork and frozen avocado. It will also further lower import tariffs on some information technology products from July 1 next year, said the ministry, in a statement on its website.

Supported by the weak USD, Gold tried to test 1.488$ resistance but failed to succeed at this level was tested couple of times since the start of December. Also, this level was seen as support before since September. Over the 1.488$ resistance, 1.500$ (%50.00 1.557$-1.445$) and 1.514$ (%61.80 1.557$-1.445$) levels can be followed. Below the 1.472$ (%23.60 1.557$-1.445$) level, the supports are lined at 1.459$ and 1.445$ levels.

Support Levels: 1.472$ 1.459$ 1.445$

Resistance Levels : 1.488$ 1.500$ 1.514$


SILVER

Silver again outperformed Gold on Monday trading as large precious metals speculators added to their bullish net positions in the Silver futures markets last week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday. The non-commercial futures contracts of Silver futures, traded by large speculators and hedge funds, totalled a net position of 40,742 contracts in the data reported through Tuesday, December 17th. This was a weekly gain of 5039 net contracts from the previous week. Silver speculative longs increase after falling to the lowest level in the past four weeks. Meanwhile, the commercial trader’s position, hedgers or traders engaged in buying and selling for business purposes, totalled a net position of -70958 contracts on the week. This was a weekly change of -7811 contracts.

Silver tested its highest level since the first week of November. On the technical front, over the 17.00$ (%50.0 of 14.29$-19.64$) level, 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$ while 16.97$ (%50.0 14.29$-19.65$) still stands as critical support. Below this level, a test of 16.80$ (late November support), 16.33$ (%61.8 14.29$-19.65$) and 15.55$ (%76.40 14.29$-19.65$) can be targeted.

Support Levels: 16.80$ 16.33$ 15.55$

Resistance Levels: 17.60$ 18.38$ 18.70$


CRUDE WTI

After the decline was seen on Friday, WTI tried to hold over 60.00$ level on the first day of the trading week. Positive risk sentiment created by trade deal developments is still supporting the black Gold alongside OPEC+ production cut decision. 

As the markets are heading into the holiday season, like most of the assets, WTI trading was in a narrow range on Monday. Over the 61.00$ level, the resistances might be followed at 63.33$ (September high) and 66.56$ (April high). Below the 60.43$ (63.33$-51.03$ %76.40) level, the supports can be followed at 60.00$ and 58.63$ (63.33$-51.03$ %61.80) levels.

Support Levels: 60.43$ 60.00$ 58.63$

Resistance Levels : 61.00$ 63.33$ 66.56$


DOW JONES

Dow Jones is about to start the holiday week close to its all-time high supported by the positive developments about the trade deal and also Boeing CEO’s resignation which lifted the industry giant’s shares and supported Dow industrials. The Chinese government has announced this Sunday that it will be carried out the tariff cuts, starting from January 1st, 2020. The decision will impact approximately 850 products imported from the United States. On the other hand, Boeing CEO Dennis Muilenburg resigned Monday as the planemaker grapples with a crisis over its troubled 737 MAX plane. Company chairman David Calhoun will take over as chief executive and president starting Jan. 13 — a leadership change the company said was necessary to “restore confidence.” The development boosted the shares and the index as well.

On the technical side, 28.400 level is now the first support line for further declines. Below this level, 28.000 and 27.770 can be followed as supports. On the other hand, resistances might be followed at 29.000, 29.500 and 30.000 levels.

Support Levels: 28.400 28.000 27.770

Resistance Levels: 29.000 29.500 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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