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EURUSD
The shared currency remained under selling pressure, falling against its American rival to 1.1649, a fresh one-month low. A dismal mood led the way throughout the first half of the day, with Asian and European equities extending their slumps. Upbeat US data paused equities’ bleeding, but a dovish ECB fueled the sour sentiment. The US dollar was once again the daily winner, further supported by Initial Jobless Claims shrinking further in the week ended October 23 and the preliminary estimate of the Q3 Gross Domestic Product, which printed an annualized 33.1%, above the 31% expected.
The ECB left its monetary policy unchanged as widely expected, with the deposit rate unchanged at -0.5% and the main rate at 0.0%. President Christine Lagarde’s statement was quite dovish, as she hinted more easing coming in December when the central bank will present fresh forecasts. Lagarde said that the whole Government Council agreed on extending the easing program. She gave no details but added that all available tools would be “recalibrated,” to counter the negative economic effects of the pandemic.
This Friday, the focus will shift to Europe, as Germany and the EU will publish their preliminary estimates of Q3 GDP. The German economy is seen growing by 7.3%, while the EU GDP is seen expanding by 9.4% when compared to the previous quarter. Annual comparisons, however, are still seen in negative levels.
The EUR/USD pair is trading near the mentioned daily low, maintaining its bearish potential heading into the Asian opening. The 4-hour chart shows that the pair is developing below all of its moving averages, with the 20 SMA accelerating south and about to cross below the 200 SMA. The Momentum indicator consolidates losses while the RSI is barely correcting extreme oversold conditions, indicating prevalent selling interest. A break below 1.1640 will likely signal an extension sub-1.16 in the upcoming sessions.
Support levels: 1.1640 1.1600 1.1560
Resistance levels: 1.1685 1.1720 1.1770
USDJPY
The USD/JPY pair bounced sharply after trading as low as 104.02, currently at around 104.70. The pair got a modest boost during Asian trading hours from the Bank of Japan, as the central bank left its monetary policy unchanged as anticipated, but downgraded inflation and growth forecast for the current fiscal year. The pair later fell on risk-aversion but bounced during the American session on the back of upbeat US data and a modest Wall Street’s comeback.
The pair found additional support in US Treasury yields, which recovered nicely on unexpected improvements in growth and employment figures. The yield on the benchmark 10-year note hit a daily high of 0.84%, ending the day just below this last. This Friday, Japan will publish October Tokyo inflation, the preliminary estimate of September Industrial Production and the unemployment rate for the same month.
The USD/JPY pair is technically neutral, according to the 4-hour chart, as it recovered above its 20 SMA which anyway maintains its bearish slope. The larger moving averages are also heading lower above the current level, while technical indicators recovered from oversold readings, but lost momentum once they reached their midlines. The pair bottomed at 103.99 in September, while the ongoing month’s low was set at 104.02. A possible double bottom is underway, although to confirm the figure, the pair needs to break above the neckline at 106.10, quite an unlikely scenario.
Support levels: 104.30 103.95 103.50
Resistance levels: 105.05 105.40 105.85
GBPUSD
The GBP/USD pair traded as low as 1.2880 this Thursday, amid continued demand for the greenback in a risk-averse environment. The UK government refuses to impose a national lockdown, despite the country reporting over 23K new cases in the last 24 hours. Still, fears remain that the government could take tougher measures to curve contagions. As for Brexit talks, news are that negotiations continue although without fresh headlines on the matter.
The UK published September Mortgage Approvals, which jumped to 91.454K, beating expectations. Money Supply in the same month increased by 12.3% YoY. This Friday, the kingdom will publish October Nationwide Housing Prices.
The GBP/USD pair is trading around 1.2930, bearish in the short-term. The 4-hour chart shows that is has broken below all of its moving averages, with the 20 SMA still above the larger ones but accelerating south. Technical indicators remain at daily lows near oversold levels, indicating persistent selling interest despite decreasing volumes at this time of the day. A break below the mentioned daily low should expose a strong static support level at 1.2770.
Support levels: 1.2880 1.2835 1.2770
Resistance levels: 1.2950 1.2990 1.3030
AUDUSD
The AUD/USD pair fell to 0.7001, its lowest since late July, as risk aversion fueled demand for the greenback. Australia published at the beginning of the day Q3 NAB’s Business Confidence, which came in at -10 from -15. The country also published the Import Price Index for the same period, that came in worse than expected as it fell by 3.5% in the three months to September. Export prices declined by 5.1%.
Upbeat US data put a halt to equities’ collapse, with Wall Street posting intraday advances and helping the pair to recover to the current 0.7030 price zone. The Australian macroeconomic calendar will be light this Friday, as the country will only publish minor figures, September Private Sector Credit and the Q3 Producer Price Index.
The AUD/USD pair has corrected oversold conditions, but the risk remains skewed to the downside, according to intraday technical readings. The 4-hour chart shows that the pair is developing below all of its moving averages, with the 20 SMA accelerating south below the larger ones. Technical indicators have barely bounced from oversold readings, but lack strength enough to support a bullish continuation.
Support levels: 0.6990 0.6950 0.6910
Resistance levels: 0.7070 0.7110 0.7160
GOLD
As the risk aversion intensifies, the USD index DXY continued its move up through 94.00 and Gold extended its decline on Thursday. It’s all about the US elections at the moment as the biggest risk event combined by the stimulus talks. As both topics create a big uncertainty for the markets, risk aversion lifted the USD. On the other hand, The United States' Real Gross Domestic Product (GDP) expanded at an annual rate of 33.1% in the third quarter. The robust reading did only help the US indexes with DXY and failed to renew risk appetite in general. Also, the USD found extra support from the ECB’s decision to keep the rates unchanged. At this point, the only chance for Gold to regain its lost ground might be a clear Democrat win in the US. In that case, a bigger stimulus package will be on the table which will devalue the USD and boost precious metals.
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 also extended its decline on Thursday but managed to get away from its daily lows at the end of the session. The white metal tested mid-$22.00 during the day but lifted itself over $23.00. Despite it being a risk-off day, Silver managed to outperform Gold with a surprise move keeping Gold to Silver ratio at 80.00. The coming week will most likely be volatile due to the elections in the US. If the election results will take longer than expected, the uncertainty will push the USD higher and precious metals might be pressured further.
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 extended its decline on Thursday testing its lowest level since mid-June. The black gold tested $35.00 but managed to lift itself over $36.00 as the dip-buyers kicked in. The overall mood in energy markets was depressed as the rising number of new Covid-19 cases forced governments to tighten restrictions across Europe. While Italy, Spain, Portugal and Poland peaked new all-time highs, Germany and France announced quarantine measures until December. Also, the stock data continues to build-up heading for the same scenario as was seen last April with a historic price crash. The EIA reported a 4.3M barrel build during last week, with supplies at Cushing down by around 0.42M barrels and Gasoline inventories shrinking less than expected by nearly 0.9M barrels. As the second wave of the pandemic is officially intact, WTI will most likely struggle in the coming months unless OPEC+ interferes with the markets once again to balance the supply-demand.
Technically speaking, $33.00 zone stands as the breakdown level to confirm a bear market has started. Below the $37.00, the supports can be followed at $33.23 ($0.00-$43.49 23.60%), $26.88 ($0.00-$43.49 38.20%) and $21.75 ($0.00-$43.49 50.00%). Over the $37.00 zone, resistance can be followed at $39.00, $40.00 and $42.00 zone (July-august consolidation range).
Support Levels: $33.23 $26.88 $21.75
Resistance Levels: $39.00 $40.00 $42.00
DOW JONES
Dow Jones managed to take back some of the previous day’s losses on Thursday with the help of a robust Q3 GDP data set. The United States' Real Gross Domestic Product (GDP) expanded at an annual rate of 33.1% in the third quarter, the US Bureau of Economic Analysis' advance estimate showed on Thursday. This reading came in better than the market expectation of +31% and followed the 31.4% contraction recorded in the second quarter. Due to the uncertainty caused by the elections next week and the stimulus package, the CBOE volatility index VIX peaked to a 15-week high this week indicating the flight to safety. The Trump administration believes that House Speaker Nancy Pelosi is not going to compromise on key issues in coronavirus relief talks, White House economic adviser Larry Kudlow told Fox News on Thursday, as reported by Reuters leaving all hopes to the post-election government. Apart from the elections in the US, the second wave of the pandemic peaked higher than the first wave forcing governments in Europe to imply restrictions once again.
If Dow Jones keeps its stance over 27,000 level decisively, 27,583 (June 2020 high), 28,000 and 28,402 levels can be followed as resistances. Below the 27,000 level, the supports can be followed at 26,000 with 25,210 (29,568-18,158 61.80%) and 24,690 (2020 April-May resistance) levels.
Support Levels: 26,000 25,210 24,690
Resistance Levels: 27,583 28,000 28,402
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.
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