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EURUSD
The EUR/USD pair finished a fourth consecutive day little changed around the 1.1850 level, ending the week with modest gains but within familiar levels. Financial markets became apathetic last week, trapped between resurgent coronavirus cases and vaccine hopes. Several front-runner companies developing vaccines to prevent COVID-19 have reported early results from their stage three test, providing encouraging results. Yet, at the same time, the world reported 11,752 new coronavirus deaths on Friday, making it the deadliest day since the pandemic began. Such numbers result in different restrictive measures that could be translated into a slower economic recovery yet to be seen and a steeper downturn before the comeback.
Macroeconomic data reflect the situation. This Monday, Markit will publish fresh hints on economic health, the November preliminary estimates of its PMIs for the EU and the US. Manufacturing activity and services output are seen contracting from October levels in Europe, while US ones are seen holding stable in expansion territory.
The EUR/USD pair has held to above the 1.1800 level alongside the week, which keeps the risk skewed to the upside, despite the lack of momentum. In the daily chart, the pair remains above all of its moving averages, with a bullish 100 DMA approaching a flat 20 DMA, reflecting the longer-term prevalence of bulls. Technical indicators hold on to positive ground, lacking directional strength. The 4-hour chart offers a neutral stance, as the pair hovers around a flat 20 SMA, while technical indicators hover around their midlines.
Support levels: 1.1810 1.1770 1.1720
Resistance levels: 1.1885 1.1920 1.1965
USDJPY
The USD/JPY pair has traded uneventfully at the end of the week, closing Friday at 103.82. The Japanese currency benefited against its American rival from the poor performance of equities, with Wall Street closing in the red. Additionally, US Treasury yields edged lower, amid tensions between the US Federal Reserve and Treasury Secretary Steve Mnuchin, related to emergency funding programs.
Japan published the October National inflation, which came in worse than anticipated at -0.4% YoY. The core CPI matched expectations printing -0.7% YoY. The country also released the November preliminary Jibun Bank Manufacturing PMI that contracted to 48.3 from 48.7. Japan celebrates a holiday this Monday, which leaves the macroeconomic calendar empty.
The USD/JPY pair has found sellers around 104.00 in the last two trading days, and technical readings suggest that a new leg lower is coming. In the daily chart, the pair is developing below firmly bearish moving averages, as technical indicators consolidate within negative levels. In the shorter-term, and according to the 4-hour chart, the risk is also skewed to the downside, as a bearish 20 SMA provides resistance, accelerating its slump below the larger ones. Technical indicators develop below their midlines but lack directional strength.
Support levels: 103.50 103.15 102.80
Resistance levels: 103.95 104.25 104.70
GBPUSD
The GBP/USD pair has advanced for a third consecutive week, finishing the last one a handful of pips below the 1.3300 threshold. Turmoil in the US has kept the dollar under pressure, while the pound was underpinned by Brexit hopes. Talks between the UK and the EU were disrupted after an EU negotiator tested positive for coronavirus but resumed virtually shortly afterwards. European Commission president Ursula von der Leyen said on Friday that “better progress” was made, although she added that “there are still quite some metres to the finish line.” Market talks suggest that an announcement could be made this week.
The UK currency found further support in October Retail Sales figures, which were up 1.2% MoM and 5.8% YoY in October, beating expectations and posting gains for the sixth consecutive month. Markit will publish the preliminary UK November PMIs. Manufacturing activity is seen contracting from 53.7 to 50.5 while services output is expected at 42.5 from 51.4 in the previous month.
The GBP/USD pair is bullish, according to the daily chart, as it is developing above bullish moving averages, as technical indicators advance within positive levels, with limited strength. In the 4-hour chart, the pair offers a neutral-to-bullish stance, as the Momentum indicator remains stuck to neutral levels, while the RSI advances around 61. A bullish 20 SMA provides dynamic support, currently at 1.3260. A steeper advance could be expected on a clear break above 1.3320.
Support levels: 1.3260 1.3210 1.3165
Resistance levels: 1.3320 1.3365 1.3410
AUDUSD
The AUD/USD pair saw little activity for a second consecutive week, confined to a roughly 100 pips’ range. The pair settled around 0.7300, holding on to most of its yearly gains, as the greenback became unattractive due to US political and pandemic jitters, while the aussie was undermined by the poor performance of equities and gold. On a positive note, Australia seems to have the coronavirus under control, and it is in the process of easing restrictive measures.
This Monday, Australia will publish the November preliminary Commonwealth Bank PMIs. Manufacturing activity is expected to remain at 54.2, while services output is expected to have expanded from 53.7 to 53.8.
The risk for the AUD/USD pair is skewed to the upside according to the daily chart, as the pair spent the week developing above all of its moving averages and with technical indicators lacking directional strength but holding into positive territory. In the shorter-term, and according to the 4-hour chart, the pair is neutral-to-bullish as it settled above a flat 20 SMA, while technical indicators are stuck to their midlines without clear directional strength.
Support levels: 0.7250 0.7210 0.7170
Resistance levels: 0.7300 0.7345 0.7380
GOLD
The developments about the vaccine set the course of the markets after the US elections. After the improvement seen in the risk appetite with the announcements from Pfizer&BioNTech and Moderna, precious metals are still trying to find a balance while the USD index DXY is keeping its steady move around 92.00 levels. European Commission President Ursula von der Leyen, Bloomberg reported on Friday that the European Medicines Agency and the US Food and Drug Administration remain in close contact on the evaluation of the vaccines and work toward a synchronized approval. Von der Leyen further noted that a conditional marketing authorization could arrive as early as the second half of December. Any positive developments on the vaccine front could cause Gold to continue to decline further. On the other hand, House Speaker Pelosi noted that she will discuss the lame-duck session with President-elect Biden regarding the stimulus talks.
The week ahead will be busy with the USD related macro data releases. Starting on Monday, Markit Services, Manufacturing and Composite PMI (PREL) data set with the Chicago Fed National Activity Index (Oct) will be followed in the US. On Tuesday, Consumer Confidence (Nov) in the US with FED official’s speeches will be followed. On Wednesday, the economic docket will be busy as a series of data from the US will be followed with FOMC minutes while on Thursday the markets will be closed due to Thanksgiving holiday in the US.
From the technical point of view, 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 kept its indecisive trading range trying to protect its $24.00 level. The risk appetite is still strong in the markets pressuring the precious metals in general. On the other hand, the US indices faced a technical correction on Friday with a slight improvement seen in the USD index DXY. The supply and demand balance shows some irregularity for Silver at the moment. The largest components of physical demand are industrial manufacturing, jewellery and investment. Industrial demand in 2020 is forecasted to be at its lowest level since 2015, while jewellery demand is projected to be at its lowest level in more than a decade. In contrast, physical investment demand looks to be at its highest level since 2015. The US is the world’s largest retail investment market, where demand may rise 62% in 2020 from 2019 levels. This more than offsets an estimated 20% decline in demand in India, the world’s second-largest retail investment market. Therefore, the post-pandemic period is giving Silver relief with the expected normalisation of the industrial demand.
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 target's 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 managed to end the week well over the $42.00 level with the help of the latest Baker Hughes report. Baker Hughes has reported that the active US rigs drilling for oil declined by 5 in the week of November 13 to a total number of 231. This is the first time oil rigs post a negative reading since mid-September and has been welcomed by a market concerned about oversupply amid the grim outlook for global demand on the back of coronavirus lockdowns. At this point, OPEC+ meeting which will be held at the end of the month will set the direction for WTI as the cartel is expected to extend their production cut decision. The consensus amongst OPEC+ nations seems, for now, to be for at least a 3-month extension to the current pact, which is current scheduled to expire in January 2021.
If WTI manages to hold over $42.00, next targets upside can be followed at $44.00 (February 2020 low), $48.64 (March 2020 high) and $50.00. Below the $42.00 level, supports can be followed at $41.00 and $40.00 consolidation zone.
Support Levels: $42.00 $41.00 $40.00
Resistance Levels: $44.00 $48.64 $50.00
DOW JONES
Dow Jones continued its technical correction on Friday after hitting a new all-time high last week supported by the positive developments regarding the coronavirus vaccine. On the other hand, while the vaccine hopes are carrying the markets at the moment, the reality started to kick in as the record number of new cases and casualties forcing states to re-impose lockdown measures. At this point, the much-expected stimulus deal combined with the use of vaccines might lift the US indexes further in 2021. Therefore, the trading schema might be more technical than fundamental for the remaining part of the year unless further developments are announced.
Due to the Thanksgiving holiday in the US on Thursday, the week will be packed short with the US macro-data releases. On Monday, Markit Services, Manufacturing and Composite PMI (PREL) data set with the Chicago Fed National Activity Index (Oct) will be followed while on Tuesday, Consumer Confidence (Nov) in the US with FED official’s speeches will be watched. On Wednesday, the economic docket will be busy as a series of data from the US will be followed with FOMC minutes while on Thursday the markets will be closed due to Thanksgiving holiday in the US.
From the technical point of view, 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
* 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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