Contact Us:  

Daily Market Report
06 Feb 2020

EURUSD

The EUR/USD pair pierced the 1.1000 level this Wednesday, amid continued demand for the greenback and upbeat US data. The January ISM Non-Manufacturing PMI surprised with 55.5 after printing 54.9 in December, beating the market’s expectation of 55. Also, the ADP survey on private jobs’ creation almost duplicated expectations, printing at 291K in January. European data, on the other hand, came in mixed, as upbeat Markit Services PMI were offset by poor sales. The index resulted in 54.2 in Germany,  in line with the market’s expectations, while the EU index was upwardly revised to 52.5. EU December Retail Sales fell by more than anticipated, down by 1.6% in the month and posting a modest 1.3% annual advance.

Concerns about the coronavirus outbreak remain the same, although a headline indicating that UK scientist could be close to developing a vaccine spurred risk appetite mid-London session. WHO’s Chief, Dr. Tedros cooled down expectations, but equities retained their positive momentum, throughout the rest of the day.

This Thursday, Germany will release December Factory Orders, seen posting a modest 0.6% monthly advance and down by 6.0% yearly basis. The US will unveil employment-related data, relevant ahead of the Nonfarm Payroll report on Friday.

The EUR/USD pair is battling with the 1.1000 level at the end of the day, maintaining its negative stance. It’s barely holding above this year low at 1.0991, although a more relevant static support level is 1.0980, a low from late November. Large stops should be gathered below this last. Technical readings in the 4-hour chart support a bearish breakout, as the pair is developing below all of its moving averages, which gain downward strength. Technical indicators remain close to oversold readings, although losing their bearish strength, anyway supporting additional slides ahead.

Support levels: 1.0980 1.0950 1.0910

Resistance levels: 1.1020 1.1060 1.1100

USDJPY

The USD/JPY pair has reached a fresh 2-week high of 109.84, amid persistent dollar’s strength, compliments to robust US data and rallying equities. Ever since the week started, better-than-anticipated US macroeconomic figures have fueled demand for local equities, which slowly approach to record highs after ending January in the red. US Treasury yields advanced for a third consecutive day, with the yield on the benchmark 10-year note hitting 1.66%, and settling not far below this last.

Japan published the Jibun Bank Services PMI for January at the beginning of the day, which resulted at 51, below the expected 52.1. The country won’t provide relevant data during the upcoming Asian session.  

The USD/JPY pair retains its gains ahead of the Asian opening, overbought in the short-term. The 4-hour chart shows that the pair is consolidating above its moving averages, with the 20 SMA gaining traction upward below the larger ones, which remain directionless. Technical indicators have turned flat within overbought levels, reflecting the ongoing consolidation. The risk is skewed to the upside, with further gains expected once beyond 109.90.

Support levels: 109.15 108.90 108.65  

Resistance levels: 109.90 110.30 110.60

GBPUSD

The GBP/USD pair seesawed between gains and losses, to close the day in the red sub-1.3000. The Pound surged with the release of the Markit Services PMI which printed at 53.9, surpassing the expected 52.9. News that the EU is reportedly planning to rewrite its rules to regulate financial markets in the block hurt Sterling, as it may limit London’s financial services sector in this post-Brexit era. The pair, however, shed most ground following the release of upbeat US macroeconomic figures. The UK won’t release relevant data this Thursday,

The GBP/USD pair has spent the day trading within familiar levels, and once again meeting sellers around a Fibonacci resistance at 1.3050. The short-term picture indicates that bears retain control, as in the 4-hour chart, the pair was also unable to move beyond congestion of moving averages, all gathering just above the mentioned Fibonacci level. The Momentum indicator advances within negative levels, as the pair held above its weekly low, while the RSI heads marginally lower at around 41, all of which keep the risk skewed to the downside.

Support levels: 1.2980 1.2945 1.2900

Resistance levels: 1.3050 1.3090 1.3125

AUDUSD

The AUD/USD pair advanced for a third consecutive day, reaching an intraday high of 0.6773, although trimming most of its daily gains ahead of the close. The Aussie was backed by better than expected Australian data, as the country’s AIG Performance of Construction Index for January came in at 41.3 from 38.9 in December. The Commonwealth Bank Services PMI for the same month beat expectations and reentered expansion territory, up to 50.6. The Chinese Caixin Services PMI, however, missed the market’s expectations, down to 51.8 in January from 52.5 in December.

The pair eased during US trading hours, despite the robust performance of Wall Street, on the heels of upbeat American data. During the upcoming Asian session, the country will release its December Trade Balance, with the surplus seen at 5950M, and Retail Sales for the same month, seen down by 0.2%.

Now trading at around 0.6740, the AUD/USD pair holds on to its short-term positive stance. The 4-hour chart shows that it continues to develop above a bullish 20 SMA, although below the larger ones, which maintain their bearish slopes. Technical indicators have retreated from overbought levels but stabilized well into positive levels. Quite a relevant static resistance level is 0.6770, with another attempt to advance beyond it exposing the 0.6840 price zone.

Support levels: 0.6700 0.6670 0.6630  

Resistance levels: 0.6770 0.6800 0.6840

GOLD

After the previous day’s plunge, Gold had a technical correction on Wednesday. Fears of a wider virus outbreak on a global scale seem like easing as China’s countermeasures both to stop the outbreak and support the economy are appreciated by the investors. As we gear up for the NFP data set on Friday, the USD index DXY is keeping its way up above the 98 levels and Wall Street also rallying.

Once again Gold found support around 1.550$ zone. Below the 1.557$ (2019 peak), 1.530$ (%76.40 1.557$-1.445$) and 1.514$ (%61.80 1.557$-1.445$) levels can be followed as support levels. The first resistance for Gold is still at the physiological level of 1.600$. Over this level, 1.615$ (April 2012-March 2013 support/resistance line) and 1.650$ can be followed as resistances.  

Support Levels: 1.557$ 1.530$ 1.514$

Resistance Levels: 1.600$ 1.615$ 1.650$


SILVER

Silver also found some support on Wednesday and tried to hold its ground around 17.60$ zone. While we saw a technical buying reaction in both Gold and Silver, also the risk assets saw a big demand on Wednesday as the fears regarding the coronavirus eased.

Silver is trying to re-gain its consolidation zone for January 2020 between 17.60$ and 18.38$. Below the 17.60$ 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$-19.65$). If Silver stays over 18.00$ it 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

Finally, WTI joined the risk-on rally on Wednesday trading after testing mid-49.00$ levels. WTI was put under pressure first as the news about Russia is not willing to support deeper production cut started to circulate. Also, OPEC+ extended their emergency meeting into day three to discuss further production cuts to fight with the loss of energy demand due to virus outbreak in China. As the equity markets started to price a positive resolution to coronavirus issue, WTI found demand and buyers carried the black gold through 51.00$ zone.

Over the 50.00$ level, the upside targets can be followed at 51.03$ (October 2019 low) and 53.00$ levels while If WTI tests below 50.00$ level, the support levels can be followed at 46.96$ and 44.66$ levels. 

Support Levels: 46.96$ 44.66$ 44.47$

Resistance Levels: 50.00$ 51.03$ 53.00$


DOW JONES

Wall Street started Wednesday trading again with a bullish gap supported by the easing tensions regarding the coronavirus and even a possible breakthrough in virus treatment. On the other hand, the ADP Employment Change registered its highest reading since May 2015 at 291,000 to provide an additional boost to market sentiment before the NFP data set on Friday. As oil prices rallied on Wednesday, the Energy Index gained almost %2 on a daily basis while the CBOE Volatility Index dropped %3.

Dow Jones re-gained 29.000 level and tried to break the resistance at 29.300 zone which was tested multiple times as all-time high. If the index stays over 29.000, 29.500 and 30.000 levels can be followed as new targets high while below the 28.400 level, 28.000 and 27.770 can be followed as supports.

Support Levels: 28.400 28.000 27.770

Resistance Levels: 29.500 30.000 30.500


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