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Daily Market Report
27 Dec 2019

EURUSD

The American dollar eased this Thursday in extremely thin conditions, with just US markets opened. Wall Street advanced, most likely underpinned by encouraging comments from the Chinese Foreign Minister and US President Trump, both indicating that there are close to a signing ceremony where both countries will seal phase one of the trade deal.

The macroeconomic calendar remained empty during London trading hours amid most European countries celebrating Boxing Day. The US, on the other hand, published Initial Jobless Claims for the week ended December 20, which came in better than anticipated at 222K. This Friday, the ECB will publish the Economic Bulletin, while the US will only offer minor commodity-related figures. Trading is expected to remain choppy ahead of year-end holidays.

The EUR/USD pair has reached the 1.1100 level, looking bullish in the short-term, mainly after recovering above the 50% retracement of its December rally, a level that capped the upside earlier this week. In the 4 hours chart, the pair is developing above its 20 and 200 SMA, while currently battling with the 100 DMA. Technical indicators stand within positive levels, although with quite limited bullish strength. The main resistance is 1.1120, the 61.8% retracement of the mentioned rally.

 Support levels:  1.1090 1.1065  1.1020

Resistance levels: 1.1120 1.1150 1.1180 

USDJPY

The USD/JPY pair has traded higher within range this Thursday, as a better market mood alongside dismal Japanese data weighed on the safe-haven currency. According to the official release, Construction Orders fell by 1.2% YoY in November, while Housing Starts in the same period declined by 12.7%. The Bank of Japan Governor Kuroda said that the central bank would ease policy further without hesitation if the momentum toward its 2% inflation goal came under threat, although he also sounded more confident in the global economic outlook.

 This Friday, Japan will release December Tokyo inflation, with the core reading excluding fresh food seen up by 0.6% YoY, below the previous 0.8%. The country will also release November Retail Sales, foreseen down by 1.7% when compared to a year earlier, and the preliminary estimate of November Industrial Production.

The USD/JPY pair is trading a few pips below 109.72, so far the highest for this December. The pair retains a bullish technical stance, as, in the 4-hour chart, the pair is holding well above all of its moving averages, with the 20 SMA heading higher at around 109.45 providing immediate support. Technical indicators in the mentioned chart lack directional strength but remain within positive levels, reflecting the lack of volume but also showing no selling interest around.

Support levels: 109.45 109.20 108.90

Resistance levels 109.75 110.00 110.40

GBPUSD

The GBP/USD pair hovers above the 1.3000 figure ahead of the Asian opening, up amid the broad dollar’s weakness in Boxing Day. The bullish potential, however, is being limited by mounting fears about the UK crashing out of the EU without a deal, after the House of Commons passed UK PM Johnson´s Withdrawal Agreement Bill. Johnson made it unlawful for the government to extend the trade talks beyond December 2020. On Monday, Irish PM Varadkar indicated that the Prime Minister is embarking on a “harder Brexit than we anticipated.”

Meanwhile, European Commission Vice-President Frans Timmermans wrote the letter in the Guardian, indicating his “deep hurt” over Brexit, and adding that the kingdom will be always welcome back in the EU. The UK won’t publish macroeconomic data this Friday.

The GBP/USD pair is neutral in the short-term, given that, in the 4-hour chart, it´s barely holding above its 20 SMA, and around the 200 SMA, both directionless. The 100 SMA stands well above the current level, while technical indicators barely advanced around their midlines, lacking enough directional strength to suggest additional gains ahead.

Support levels: 1.2970 1.2930 1.2895  

Resistance levels: 1.3030 1.3065 1.3100

AUDUSD

The Australian dollar continues to be the best performer against the greenback, with the AUD/USD pair having extended its rally to a fresh December high of 0.6943. The pair is trading at levels last seen in July this year, stronger on the back of optimism regarding the US-China trade relationship. The positive performance of Wall Street, alongside gold advancing beyond the 1,500 threshold, lent support to the pair this Thursday. Australian markets have been closed for the Christmas holidays and will resume activity this Friday. No data is going to be released.

The AUD/USD pair is poised to extend its gains, given that, in the 4-hour chart, a bullish 20 SMA continues to provide intraday support, while advancing above the larger ones. Technical indicators lack directional strength, the Momentum just above its 100 line, but the RSI at around 75, skewing the risk to the upside. The pair has now room to test the 0.7000 threshold, with little chances of breaking through it on a first attempt.

Support levels:0.6900 0.6865 0.6830  

Resistance levels: 0.6970 0.7000 0.7035

GOLD

Both risk assets and safe havens benefited holiday trading Wall Street and Gold posted gains in thin liquidity environment. As Chinese officials agreed on signing the phase one deal, the spokesman of the Chinese commerce ministry, Gao Feng, indicated that both parties are speaking about the procedure of signature of the agreement. Although the positive risk sentiment seen on the markets, Gold ended Thursday trading with third consecutive gains marked surpassing 1.500$ level.

 As long as the yellow metal stays over 1.500$ level, 1.514$ (%61.80 1.557$-1.445$), 1.530$ (%76.40 1.557$-1.445$) and 1.557$ (2019 peak) can be followed as resistances. Below the 1.500$ level, the support levels can be followed at 1.488$ (%38.20 1.557$-1.445$) and 1.472$ (%23.60 1.557$-1.445$) levels.

Support Levels: 1.500$ 1.488$ 1.472$

Resistance Levels: 1.514$ 1.530$ 1.557$


SILVER

Silver was also in a festive mode testing 18.00$ level on Thursday trading. However, the white metal failed to stay above this level and retraced back on the fifth consecutive day with a move up.

From the technical point of view, below the 17.60$ level, which is the %38.20 level of 14.29$ and 19.64$ move the first support is located at  16.97$ (%50.0 14.29$-19.65$) and 16.33$ (%61.8 14.29$-19.65$). With a clear break of 18.00$ silver can test 18.38$ (%23.6 14.29$-19.65$) and 18.70$.

Support Levels: 17.60$ 16.97$ 16.33$

Resistance Levels: 18.38$ 19.00$ 19.64$

 

CRUDE WTI

After hitting dip at 51.00$ level in early October, WTI is still keeping its move north except some retracements along the way. The black gold, which is supported by the OPEC+ deal about further production cuts and the optimism caused by the phase-one deal between China and the US is now testing levels close to 62.00$ during the holiday trading. On the last day of the trading week, the investors will follow the stock info from the US as usual.

With a steady close over the 62.00$ level, 63.33$ (September high) and 66.56$ (April high) levels can be followed as resistances. Below the 61.00$ level, 60.43$ (63.33$-51.03$ %76.40) 60.00$ and 58.63$ (63.33$-51.03$ %61.80) levels can be followed as supports.

Support Levels: 61.00$ 60.43$ 60.00$

Resistance Levels: 62.00$ 63.33$ 66.56$


DOW JONES

Dow Jones kept its ground solid during the holiday trading in a narrow range as expected. On Tuesday, Donald Trump cheered the rally seen on Wall Street with a tweet saying “NASDAQ UP 72.2% SINCE OUR GREAT 2016 ELECTION VICTORY! DOW UP 55.8%. The best is yet to come!” As the positive news flow keep coming regarding the trade deal, we might expect the move up to continue after the new year holiday too.

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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