EURUSD
The EUR/USD pair recovered some ground this Wednesday, reaching a daily high of 1.1781, to settle a handful of pips below it. The dollar gave up against high-yielding rivals after US President Donald Trump tweeted his support to multiple aid measures, including checks to all Americans, aiding airlines and payroll protection. That happened shortly after spurring risk-off by calling off negotiations with Democrats over the next aid package.
The macroeconomic calendar had little to offer that could affect the currencies’ behavior. Germany published August Industrial Production, which declined 0.2% MoM and was down 9.6% when compared to a year earlier, missing the market’s expectations. The FOMC published the Minutes of the latest meeting, which showed that policymakers noted that the incoming data revealed that economic activity was recovering faster than expected from Q2 dip. They also added that their outlook assumed additional fiscal support. The document fell short of triggering a market’s reaction.
This Thursday, Germany will publish its August Trade Balance, while the ECB will publish the Minutes of its latest meeting. The US will release Initial Jobless Claims for the week ended October 2, foreseen at 820K from 837K.
The EUR/USD pair holds on to a modest positive stance in the near-term. The 4-hour chart shows that it is developing above its 20 and 100 SMA, with the shortest advancing above the larger one. The 200 SMA, however, maintains its mildly bearish stance, currently around the 1.1800 figure. Technical indicators, in the meantime, have retreated from intraday highs, holding above their midlines but turning south, suggesting subdued buying interest at the time being.
Support levels: 1.1725 1.1690 1.1650
Resistance levels: 1.1770 1.1810 1.1850
USDJPY
The USD/JPY pair surged to a fresh three-week high of 106.10, finding support in an improved market´s sentiment and higher government debt yields. Both were underpinned by comments from US President Trump, who announced his support for the economy after earlier calling off negotiations over a stimulus aid package with Democrats. Meanwhile, the yield on the benchmark 10-year note surged to 0.79% a fresh multi-week high.
Japan published at the beginning of the day the preliminary estimate for the August Leading Economic Index, which improved by less than anticipated, printing at 88.8 vs the 89.4 forecast. The Coincident index for the same period beat expectations, coming in at 79.4. During the upcoming Asian session, the country will publish the August Trade Balance and the September Eco Watchers Survey.
The USD/JPY pair is trading around 106.00 as the day comes to an end, bullish in the short-term. The 4-hour chart shows that the pair is comfortable above all of its moving averages, with the 20 SMA advancing within the larger ones. Technical indicators in the mentioned time-frame head modestly higher within positive levels, keeping the risk skewed to the upside.
Support levels: 105.80 105.40 105.00
Resistance levels: 106.25 106.60 107.00
GBPUSD
The GBP/USD pair recovered from a daily low of 1.2844, helped by the soft tone of the American currency. The Pound came under selling pressure amid market talks indicating that the UK is planning to quit Brexit trade talks if they cannot reach a deal by October 15, the date set by PM Boris Johnson. Also, British Cabinet Minister Michael Gove noted that no-deal preparations are intensifying while UK’s chief negotiator David Frost, said that fisheries are the most difficult issue remaining in negotiations with the EU.
The GBP/USD pair held below 1.2930, as Brexit-related headlines capped advances. On Thursday, the focus will be on the Bank of England, as Governor Bailey is due to participate in a panel discussion at the Single Resolution Board's annual conference, while the Financial Policy Committee will publish the minutes of its latest meeting.
The GBP/USD pair is trading near its daily high, but the bullish potential seems well limited. The 4-hour chart shows that technical indicators remain directionless within negative territory, while the pair was unable to advance beyond its 20 SMA. Moving averages are flat, reflecting the absence of a clear direction. Bulls could have better chances on a break above 1.2935, the immediate resistance level.
Support levels: 1.2890 1.2850 1.2810
Resistance levels: 1.2935 1.2980 1.3020
AUDUSD
The Aussie was able to recover some ground against its American rival this Wednesday, with AUD/USD trading in the 0.7140 price zone as Asian traders prepare their desks. The pair recovered part of the ground lost on risk-aversion late Tuesday, but gains were modest, despite Wall Street managing to trim all of its losses. The Australian currency received additional pressure from local data, as the AIG Performance of Services Index plummeted to 36.2 in September from 42.5 in the previous month. Gold prices remained subdued, with the bright metal trading near the weekly low, also limiting the bullish potential of the pair. The Australian calendar will remain empty this Thursday.
From a technical point of view, the risk for the AUD/USD pair is scheduled to the downside. The 4-hour chart shows that it is trading below all of its moving averages, which head marginally lower. Technical indicators, in the meantime, lack directional strength but remain within negative levels. The 0.7100 level is the immediate support, with a steeper decline expected on renewed selling interest below it.
Support levels: 0.7100 0.7060 0.7025
Resistance levels: 0.7175 0.7210 0.7250
GOLD
Gold tried to erase some portion of its losses made on Tuesday. On Wednesday, the markets had a better risk appetite while Trump once again confused everyone. On Tuesday, the president tweeted that he ordered negotiations to stop about the second stimulus package and triggered a risk-off trade. However, later in the day, he tweeted that the would support the $1,200 national stimulus checks, give support for the airlines and new small-business relief programs. On the other hand, FOMC Minutes showed that the participants believe that the economy is recovering faster than expected and the data sets are expected to be better compared to Q2 in Q3 which also supported the better market mood. As the risk appetite improved, the USD index DXY retraced slightly to mid-93.00 levels but Gold failed to test the physiological level of $1,900.
Gold managed to get away from the critical support zone at $1,860. Below this 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
As the market sentiment changed on Wednesday, Silver found support and erased some of its losses made on Tuesday alongside Gold. Once again, in a precious metals positive trading day, Silver outperform Gold and pushed Gold to Silver ratio back to 79.00 levels. Also, reflecting Silver’s room for further advance, Silver to S&P 500 ratio stands around 0.07 while the median value stands at 0.014. On the industrial demand side, Silver is widely used in the solar panel sector. However, an Australian startup is aimed to replace Silver with Copper. Therefore, in the long run, Silver might lose a bit of its charm if the new technology for solar panels is implemented.
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 is trying to hold its positive mood despite the surprise incline seen in the US oil stocks. The American Petroleum Institute (API) showed an oil inventory build of 951,000 barrels in the week ended Oct. 2 versus analysts' expectations for a build of 400,000 barrels. On the other hand, the market sentiment had a 180-degree turn as Trump confused the markets by ending the second stimulus programme talks and then tweeting supportive messages. On the other hand, state oil producer Saudi Aramco raised pricing for Arab Light crude for Asia, its largest regional market, by 10 cents a barrel to 40 cents less than the benchmark. After spending a considerable amount of time between $40.00 and $42.00 range, WTI is trying to re-gain its consolidation zone. However, $40.00 seems like a hard nut to crack at this point for WTI.
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
Trump confused the markets by tweeting supportive messages about the stimulus package after ending COVID-19 aid talks on Tuesday. Trump said on Tuesday that Nancy Pelosi is asking for $2.4 Trillion Dollars to bail out poorly run, high crime, Democrat States, money that is in no way related to COVID-19. However, later in the day, he tweeted a possible package with $25 billion to continue subsidies for airline payrolls, $135 billion to continue subsidies for small business payrolls and $1,200 free money handout for everyone. US House Speaker Pelosi also commented on Wednesday that US President Donald Trump made a terrible mistake by ending coronavirus aid negotiations. Apart from the shift in stimulus talks, markets also found some support with the positive FOMC minutes headlines. Minutes of the FOMC's September 15-16 meeting showed on Wednesday that participants believe the economic activity was recovering faster than expected from its depressed second-quarter level according to incoming data. It is also highlighted that if future fiscal support was significantly smaller or came significantly later than they expected, the pace of recovery could be slower than anticipated. Trump also supported this view on Wednesday absurdly after announcing the cancellation of debates.
Dow Jones re-gained level that was last seen in mid-September. 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.
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