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EURUSD
The EUR/USD pair is little changed on a daily basis, trading around 1.1710 as the day comes to an end. It peaked at 1.1770 and plummeted to 1.1602 in the heat of the US presidential battle. A clear outcome is not yet available as the race is tight in some swing states, with counting delayed due to mailed-in ballots. At this point, Biden has a slight advantage when it comes to electors confirmed, but nothing is set and done. What’s notable is that Wall Street hit fresh weekly highs, as US President Trump seems to be doing much better than anticipated.
Markit published the final versions of October Services PMIs, which were upwardly revised in most of the EU. The German index printed at 49.5 from 47.3, while the Union index improved from 46.2 to 46.9. The US Markit Services PMI came in at 59.3, much better than the previous 55.4. The US also released the ADP survey, which showed a slower than expected pace of job creation in October. The private sector added 365K new positions, far below the 650K expected and the previous 753K. Finally, the official ISM Services PMI printed at 56.9, slightly better than anticipated.
This Thursday, Germany will release September Factory Orders, while the EU will unveil Retail Sales for the same month. The US session will bring Initial Jobless Claims for the week ended October 30, foreseen at 733K, and other employment-related figures relevant ahead of Friday’s Nonfarm Payroll report.
The EUR/USD pair trades around 1.1720, maintaining a positive stance, but with a limited bullish potential as it trades within familiar levels. The 4-hour chart shows that sellers are rejecting advances around the 100 and 200 SMAs, both heading lower near the mentioned daily low. Technical indicators hold on to intraday gains within positive levels but lost directional strength.
Support levels: 1.1690 1.1650 1.1610
Resistance levels: 1.1770 1.1820 1.1875
USDJPY
The USD/JPY pair is ending Wednesday as it started it, trading around 104.50. Sentiment swings saw the pair advance to 105.34 to later fell to 104.14, now stable at lower levels as despite rallying equities, government debt yield was down, somehow suggesting a cautious stance from investors. The yield on the benchmark 10-year Treasury yield fell to 0.76%, a fresh weekly low.
The Bank of Japan published the Minutes of its latest meeting, which showed that policymakers are concerned about how to address the economic setback resulting from the coronavirus pandemic, as the economy is still struggling to recover. This Thursday, the country will publish September Overall Household Spending and Labour Cash Earnings for the same month.
The USD/JPY pair is bearish and poised to extend its decline. The 4-hour chart shows that it was unable to retain gains above a bearish 100 SMA, now also below the 20 SMA. Technical indicators are stable within negative levels, lacking clear directional strength but still skewing the risk to the downside. The pair needs to break below the critical 104.00 area to confirm further declines ahead.
Support levels: 104.30 103.95 103.50
Resistance levels: 105.05 105.40 105.85
GBPUSD
The GBP/USD pair peaked this Wednesday at 1.3140 but it is ending the day in the red a handful of pips below the 1.3000 mark. The early swings that saw the pair also falling to 1.2914 were dollar-lead, amid the lack of definition in the US presidential election. As for UK data, Markit published the final version of the October Services PMI, which was downwardly revised to 51.4.
On the Brexit front, EU's chief negotiator Michel Barnier warned that “very serious divergences remain” in Brexit trade talks, although the UK and the EU will likely extend talks into next week. The news has negatively affected the pound.
This Thursday, the Bank of England will announce its latest decision on monetary policy. The central bank will likely keep rates unchanged, but there’s a good chance it will increase the size of its APP. Policymakers will also provide markets with fresh growth and inflation forecasts, expected to be downgraded from the previous estimates.
The GBP/USD is neutral in the near term, as the 4-hour chart shows that it’s holding around a flat 100 SMA, while above an also directionless 20 SMA. Technical indicators in the mentioned time-frame have turned lower within positive levels, indicating limited buying interest. The bullish case could find some temporal support on US election-related news, but when it comes to UK developments, the risk is skewed to the downside.
Support levels: 1.2950 1.1905 1.2855
Resistance levels: 1.3030 1.3085 1.3130
AUDUSD
The AUD/USD pair trades around 0.7180, up for the day as the positive tone of Wall Street provided support to the pair in the final trading session of Wednesday. The pair peaked at the beginning of the day at 0.7221, its highest in three weeks, amid the broad dollar’s weakness in the heat of the US presidential election. Data coming from Australia passed unnoticed, although it was encouraging as the October AIG Performance of Construction Index came in at 52.7 from 45.2 in the previous month. Also, September Retail Sales were upwardly revised from -1.5% to -1.1%. Australia will publish the September Trade Balance this Thursday, previously at 5114M.
The AUD/USD pair is up for a third consecutive day and poised to extend its gains according to intraday technical readings. The 4-hour chart shows that the pair is above all of its moving averages, with the 20 SMA heading firmly higher, although below the larger ones. Technical indicators are retreating just modestly from overbought readings, reflecting the absence of volumes at this time of the day rather than suggesting an upcoming decline.
Support levels:0.7125 0.6990 0.6950
Resistance levels: 0.7220 0.7265 0.7300
GOLD
Markets started the day with an expectation of a clear Democrat win due to latest polls. However, the polls were wrong and the outcome of the elections turned into a tight margin race. As the “blue wave” did not happen, Gold gave away some of its recent gains while the USD index DXY gained traction. On the other hand, the US 10-year yield sank to 0.778 shredding 11.70% on a daily basis while the indexes in the US rallied. It looks like the outcome of the elections will not be clear for a while. On the other hand, it is very likely that the Senate will remain under the Republican influence apart from the presidential race. The cautious tone will be present until the election results are clear, therefore, Gold will most likely swing in a specific range in the short-term.
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 lost some of its recent gains as the elections in the US turned out to be a close call with a mixed result between the Democrats and Republicans. The USD index DXY found some support with the expectations of a smaller than expected stimulus package and pressure precious metals. Apart from its industrial usage, Silver at the moment is solely traded by the election headwinds. The white metal still needs time to benefit its industrial demand for the post-pandemic era. Therefore, as the Gold to silver ratio still stands around 80.00 level, silver might be giving an opportunity for the long run.
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 found extra support from the weekly stock data on Wednesday. Crude Oil Stocks Change in the US was -8 million barrels in the week ending October 30th, the weekly report published by the US Energy Information Administration (EIA) revealed on Wednesday. Analysts estimate was for an increase of 0.9 million barrels. On the other hand, US crude oil refinery inputs averaged 13.6 million barrels per day during the week ending October 30, 2020, which was 163,000 barrels per day more than the previous week’s average signalling strong demand for oil in the US. Also, OPEC+ is expected to postpone its output increase which was scheduled in January 2021.
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 extended its bullish gap starts to Wednesday as the whole world is now focused on the tight election race. While the markets are pricing for a Biden presidency, it is most likely that there will be a split in the Congress. On the other hand, while the participation in the election was at record levels, Joe Biden did manage to get a record number of votes for any Democrat candidate in history. While the indexes rallied in the US, the USD index DXY also managed to gain some ground while the US 10-year yield sank to 0.778. A mixed Congress might end-up with a smaller stimulus package and less liquidity injected into the markets despite a Biden presidency. It is likely that the official outcome of the elections might take longer than expected as Trump campaign files suit in Michigan to halt the counting of ballots. Also, earlier in the day, US President Donald Trump's campaign announced that they will immediately request a recount in Wisconsin, citing irregularities in several counties which raise serious doubts about the validity of the results. On the macro data side, private-sector employment increased by 365,000 from September to October, on a seasonally adjusted basis versus the expectation of 650,000.
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.
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