Daily Market Report - 16th Oct 2020

For more details: https://www.nooralmal.com/

EURUSD

The American dollar maintained its bullish momentum this Thursday, advancing against all of its major rivals amid persistent concerts. The EUR/USD pair fell to 1.1688, its lowest in two weeks, to close the day around the 1.1700 level. Stocks markets were a sea of red, although Wall Street recovered ahead of the close, while government bond yields were also under pressure. The 10-year yield settled at levels last seen in March, while its US counterpart held above 0.70%.

The EU macroeconomic calendar had nothing to offer, while the US released Initial Jobless Claims for the week ended October 9, which unexpectedly rose to 898K, much worse than expected. The country also released the October NY Empire State Manufacturing Index which came in at 10.5, also missing the market’s expectations. The Philadelphia Fed Manufacturing Survey for the same month improved from 15 to 32.3, beating expectations.

 This Friday, the EU will publish its final version of September inflation, although the focus will be on US Retail Sales, seen up 0.7% in September, and the preliminary estimate of the October Michigan Consumer Sentiment Index.

The EUR/USD pair is at risk of extending its decline, despite intraday technical readings show a limited bearish momentum. In the 4-hour chart, the pair remains below all of its moving averages, with the 20 SMA accelerating south well above the current level. Technical indicators, lack directional strength but remain near their daily lows well into negative levels. The pair has room to extend its decline, particularly on a break below 1.1680, the immediate support.

Support levels: 1.1680 1.1635 1.1590

Resistance levels: 1.1725 1.1770 1.1810 

USDJPY

The USD/JPY pair has recovered towards the 105.40 price zone during the US afternoon, as US indexes managed to bounce from daily lows on comments from US Senate Majority Leader McConnell, who said that they would pass a stimulus aid package after the election if they can’t get a deal with Democrats these days. Still, investors took the headline with a pinch of salt, and market’s reactions were limited, with the greenback maintaining its gains against most major rivals. Japan didn’t publish macroeconomic data of interest on Thursday, and the country’s calendar will remain empty this Friday.

The intraday advance in the USD/JPY pair fell short of changing the bearish bias of the pair, which remains neutral in the near-term. The pair is now trading above a flat 20 SMA but below also directionless 100 and 200 SMAs. Technical indicators have advanced within negative levels but were unable to move into positive territory. The pair needs to clearly leave the 105.00/105.80 area to be able to gain some directional strength.

Support levels: 105.00 104.65 104.20

Resistance levels: 105.80 106.25 106.60 

GBPUSD

The GBP/USD pair has shed all of its Wednesday’s gains on the back of risk aversion, falling below the 1.2900 price zone, where it stands heading into the Asian opening. The British Pound suffer extra pressure from headlines indicating that the London area is moving into the high level of alert this Saturday, amid the sharp increase in new coronavirus contagions. This means that more than half of England's population will now be living under high alert restrictions.

Meanwhile, UK's chief Brexit negotiator, David Frost, reiterated that the UK wants to reach a trade deal with the EU. He later complained that the EU is no longer committed to working intensively. EU’s Michel Barnier, on the other hand, said that the Union would do everything possible to reach a deal, although he clarified that “not at any price.” Barnier repeated that the UK needs to agree to a level playing field if it wants access to the EU market. The UK won’t release relevant macroeconomic data this Friday.

The GBP/USD pair trades near its daily lows and seems poised to extend its decline. The 4-hour chart, however, shows that the pair continued to meet buyers around a directionless 100 SMA, although the 20 SMA is gaining bearish strength above the current price. Technical indicators, in the meantime, hold within negative levels, reflecting the absence of buying interest.

Support levels: 1.2860 1.2815 1.2770

Resistance levels: 1.2940 1.2995 1.3040 

AUDUSD

The AUD/USD pair fell to 0.7055, a fresh October low, bouncing from the level ahead of the daily close to settle near the 0.7100 level. The Aussie fell despite September employment data was better than anticipated. According to the official release, the country lost 29.5K jobs in the month, 20.1K of those being full-time positions. The unemployment rate increased from 6.8% to 6.9%, better than the 7.1% expected. The pair rather followed the lead of equities, which were pressured by the ruling dismal mood. The country will publish August HIA New Home Sales this Friday, previously at -14.4%.

The latest AUD/USD recovery seems corrective, with the pair at risk of extending its decline. The 4-hour chart shows that technical indicators have corrected oversold conditions, but also that they remain well below their midlines. Also, the pair continues to develop below all of its moving averages, which present bearish slopes.

Support levels: 0.7050 0.7020 0.6980

Resistance levels: 0.7130 0.7170 0.7205

GOLD

Gold tried to extend its move up on Thursday but failed to surpass Wednesday’s high at $1,912. Ongoing uncertainty on the stimulus program combined with the rising number of Covid-19 cases created a cautious market tone lately. France and the UK announced new lock-down measures triggering a selling wave in equity markets with fears of a second wave is mounting. On the other hand, despite a move-up seen in the USD index DXY, Gold also advanced through $1,900 breaking the usual correlation. As the elections in the US comes closer, it is highly expected that the results will take longer than expected. Therefore, a highly volatile period will be on the table in the coming weeks.       

Below the $1,860 level, the supports can be followed at $1,763 ($1,451-$2,075 61.80%) and $1,700 levels. Over the $1,860 level, the resistances can be followed at $1,900 with $1,956 ($1,451-$2,075 38.20%) and $2,000 levels.

Support Levels: $1,860 $1,763 $1,700

Resistance Levels: $1,900 $1,956 $2,000

SILVER

Silver printed a hammer candlestick formation on Thursday alongside Gold despite the advance seen in the USD index DXY. The rising number of new cases in Europe forced France and the UK to re-impose some of the lockdown measures. On the other hand, the uncertainty surrounding the stimulus package is creating a risk-off environment limiting the advance seen in precious metals lately. On the physical demand side, Silver coin and bar demand had surged 65% over the first three quarters mostly in the US and Germany. However, demand for jewellery dropped 20% to its lowest level since 2012.     

Below the $22.90 level ($11.63-$29.86 38.20%), the supports can be followed at $20.75 ($11.63-$29.86 50.00%) and $18.42 ($11.63-$29.86 61.80%). Over the $22.90 level, the targets up can be followed at $25.21 ($11.63-$29.86 23.60%), $26.00 (August-September support), $27.00 and $28.00 levels.

Support Levels: $22.90 $20.75 $18.42

Resistance Levels: $25.21 $26.00 $27.00

CRUDE WTI

WTI rebounded sharply to $41.00 levels after testing $39.25 on Thursday. The extreme incline in the number of new cases centred in the EU sparked demand worries. France announced that it will start imposing nightly curfews in major cities for four weeks and Germany said it is planning to announce new coronavirus-related restrictions. Additionally, several news outlets reported that London could go into a tier-two lockdown from Friday night. On the other hand, the American Petroleum Institute on Wednesday showed that crude oil inventories in the US declined by 5.4 million barrels in the week ending October 9th supporting the crude prices in the US.

If WTI manages to hold over $40.56 ($65.62-$0.00 61.80%) level, the targets upside can be followed at $41.00, $46.57 (March decline start) and $50.00 levels. Below $40.00, the supports can be followed at $39.00 and $32.81 ($65.62-$0.00 50.00%) and $31.00 levels.

Support Levels: $39.00 $32.81 $31.00 

Resistance Levels: $41.00 $46.57 $50.00

DOW JONES

After two consecutive days of decline, Dow Jones had a tight range but positive trading session on Thursday. The debate surrounding the stimulus program is still in a deadlock state as the US President Donald Trump‘s higher bid for a stimulus deal was rejected by Senate Majority Leader Mitch McConnell, who said it wouldn’t get support from Republicans. Trump said on Fox Business Thursday that he would go still higher than the $1.8 trillion the White House has already proposed and blamed Pelosi, who wants a $2.2 trillion package, for standing in the way. On the other hand, House Speaker Nancy Pelosi stated that the deal will not wait until January. There were 898,000 initial claims for unemployment benefits in the US during the week ending October 10th, the data published by the US Department of Labor (DOL) revealed on Thursday. This reading followed last week's print of 845,000 (revised from 840,000) and came in worse than the market expectation of 825,000. Apart from the political turmoil in the US, the rising number of new cases especially in the EU forced France and the UK to take new lockdown measures. Along with the developments, the CBOE volatility index VIX hit a one-week high. Today the markets will focus on the retail sales data reading in the US to use as another argument for the much-awaited stimulus program.    

From the technical point of view, over the physiological 28,000 level, 28,400 with 29,000 and 29,500 can be followed as next resistance while below 27,770 level the supports can be seen at 27,400, with 27,000 and 26,757 (24,680-27,400 23.60%) levels.

Support Levels: 27,700 27,400 27,000

Resistance Levels: 28,400 29,000 29,500

MACROECONOMIC EVENTS

* 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.

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 © Noor Al Mal

#脱欧谈判僵局会打破吗##ImTrader交易大赛##2020年美国大选##9月非农爆冷下滑##黄金回调结束了吗#