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Daily Market Report
30 Dec 2019

EURUSD

The EUR/USD pair closed the week at 1.1175, its highest daily settlement since early August, although it held below December’s peak at 1.1199. The American dollar weakened Friday following the Christmas holiday, with the movement exacerbated by thin volumes. There was no significant catalyst behind the dollar’s slump, but risk appetite dominated the financial world, triggered by news that the US and China are arranging a ceremony to sign phase one of their trade deal.

The upcoming week will also be filled with holidays, with the market volume not expected to return to normal until the second week of January. This Monday, the macroeconomic calendar will bring German Retail Sales, seen up in November by 1.0%, while the US will publish November Trade Balance and Pending home sales.

The EUR/USD pair is bullish according to the daily chart, having bounced from a bullish 20 DMA to settle above its 200 DMA for the first time since last June. Technical indicators in the mentioned chart have recovered from around their midlines, heading north almost vertically near December highs, in line with further gains ahead. In the 4-hour chart, the risk is also scheduled to the upside as the pair soared beyond all of its moving averages, while technical indicators barely pared their advances in overbought territory. The pair could extend its advance one beyond the 1.1210 level, as stops should be gathered just above the mentioned monthly high.

Support levels:  1.1150 1.1120 1.1070

Resistance levels: 1.1210 1.1250 1.1285

USDJPY

The USD/JPY pair fell last Friday to 109.38 to end the day a few pips above this last. The pair was trapped between the broad dollar’s weakness and risk appetite, this last, limiting yen’s gains. US Treasury yields eased, while Wall Street closed mixed, with the three major indexes stuck around their opening levels, both failing to provide directional clues to the pair.

Japanese data released by the end of the week was mixed, as December Tokyo inflation beat the market’s expectations, up to 0.9% YoY. The core reading ex-fresh food resulted at 0.8%, above the 0.6% expected. The November unemployment rate in the country decreased to 2.2%, also better than expected, but Retail Trade fell by 2.1% YoY in November. Also, the preliminary estimate of November Industrial Production resulted much worse than anticipating, plummeting 8.1% YoY. The country won’t release relevant data this week.

The USD/JPY pair has been hovering around the 109.50 price zone for over two weeks now, neutral yet bullish as it holds around December high at 109.72. The daily chart confirms so, as the pair is developing above all of its moving averages, while technical indicators remain within positive levels. In the 4-hour chart, the pair is also neutral, as it is stuck around a flat 20 SMA but holding above the larger ones, as technical indicators ease modestly around their midlines, without enough directional strength.

Support levels: 109.20 108.90 108.60

Resistance levels 109.75 110.00 110.40

GBPUSD

Despite persistent fears of a hard-Brexit, the GBP/USD pair advanced to 1.3116 last Friday, its highest in almost two weeks, to finally settle in the 1.3080 price zone. A sustained Sterling advance, however, is yet to be seen. Indeed, UK PM Johnson put an end to the political deadlock by passing his deal through the Parliament after the elections. However, he also put a term to trade negotiations, as the Brexit transition period could not be extended beyond December 31st, leaving just eleven months to clinch a deal. On Friday, the European Commission president, Ursula von der Leyen, expressed her concerns that such time won’t be enough to define the future relationship between the EU and the UK. Political uncertainty will likely return to be the main driver for Pound once the markets return to normal post-winter holidays.

The daily chart for the GBP/USD pair shows that the advance stalled around the 20 DMA, while technical indicators turned north, but are currently in neutral levels, falling short from supporting additional gains ahead. In the 4-hour chart, the pair bounced from its 20 SMA to met sellers around the 100 SMA, both lacking directional strength. Technical indicators, in the meantime, are turning south within positive levels, indicating decreasing buying interest at current levels. The pair could extend its advance in the short-term, amid the broad dollar’s weakness, with a relevant resistance at 1.3132,  December 19 high.

Support levels: 1.3060 1.3020 1.2970

Resistance levels: 1.3100 1.3135 1.3180

AUDUSD

The Australian dollar continued outperforming its major rivals, with the AUD/USD pair soaring to 0.6986, a level that was last seen in July this year. Wall Street’s rally and encouraging headlines related to the US-China trade relationship continued to provide support to the commodity-linked currency. On Friday, additional support came from China, as the country’s Industrial Profits rebounded sharply in November, up by  5.4% YoY, following a 9.9% decline in the previous month. The Australian macroeconomic calendar has nothing to offer this Monday, which means that sentiment will likely continue to lead, underpinning the Aussie. Later this week, China will release some relevant growth-related figures.

From a technical point of view, the AUD/USD pair is bullish, further rallying above a long-term descendant trend line coming from 2018 high. In the daily chart, the pair has advanced above all of its moving averages, with the 20 DMA advancing between the larger ones, and technical indicators maintaining their bullish slopes near overbought levels. In the shorter term, and according to the 4-hour chart, the risk is also skewed to the upside, as the pair is developing above bullish moving averages, while technical indicators barely decelerated their advances, the RSI currently at 86. The 0.7000 thresholds should offer resistance but could be broken in the current market conditions.

Support levels: 0.6940 0.6900 0.6865    

Resistance levels: 0.7000 0.7035 0.7070

GOLD

Gold had a very productive week gaining around 30$ as the markets finalize their moves ahead of 2020. While the positive news regarding the trade deal which supports the risk sentiment kept coming, also precious metals tried to advance higher ahead of the new year holiday with the help of weak USD across the board. This week the trading volumes are expected to be low due to the new year holiday. Never the less, on Thursday the manufacturing PMI data will be followed from China and the US and also FOMC minutes will take attention on Friday.

Gold managed to hold its ground over 1.500$ but failed to break the important 1.514$ resistance for further advances. 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 failed to carry its move up on Friday over 18.00$ level and retraced back before finishing the week with almost %4 gain. Silver is expected to begin the next decade on a positive note, through the combination of higher industrial and investment demand, also tightened supply owing to mine production issues and output cuts.

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

WTI tried to find momentum on the last day of the trading week supported by the news flow regarding Iran’s aggression to Saudi Arabia oil fields and retracing USD worldwide. The API data showed that the US crude inventories fell by 7.9 million barrels in the week to December 20 to 444.1 million barrels vs. expectations for a draw of 1.83 million barrels. In 2020, the production cut decision by the OPEC+ and tensions in the Gulf region will likely be the main driver of oil alongside the expected increase in industrial production.

WTI failed to break 62.00$ level on Friday. 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

Wall Street indexes again renewed their all-time high levels with the improved market sentiment. the easing concerns over a prolonged US-China trade war and heightened hopes of global economic recovery gaining momentum on upbeat data from China provided a boost to risk sentiment while the classic year-end rally took place this year. Earlier in the day, China’s National Bureau of Statistics reported that Industrial Profits rose sharply following October's decline of 9.9% and increased by 5.4% on a yearly basis in November. Although the new year holiday, this week manufacturing PMI data both from China and the US will be followed as well as FOMC minutes on Friday.

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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