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EURUSD
The EUR/USD pair flirted with this year’s high and traded as high as 1.2176, as Brexit’s optimism weighed on the dollar’s demand throughout the first half of the day. The market’s sentiment suffered a sharp U-turn after Wall Street’s opening, with the greenback appreciating against all of its major rivals. News that London will go into the higher level of restrictions, as multiple US cities are imposing fresh lockdowns alongside some European countries, hurt the market’s mood.
The pair retreated but remained above Friday’s close, ending the day with gains in the 1.2150 price zone. Data wise, the calendar was scarce. The EU published October Industrial Production, which came in better than anticipated, up by 2.1% in the month. The yearly figure came in at -3.8%, better than the -4.4% expected. The macroeconomic calendar will remain scarce on Tuesday, as no relevant data will be out from the EU or the US.
The EUR/USD pair keeps consolidating gains well above the 1.2100 threshold, which limits the bearish potential. The 4-hour chart shows that the pair met buyers around a flat 20 SMA, which provides dynamic support around 1.2120. Technical indicators have lost their bullish strength but remain within positive levels, reflecting the latest decline instead of anticipating further declines ahead. The pair could enter a corrective decline once below the mentioned 1.2120 level, but chances of a break below 1.2000 are out of the picture at the time being.
Support levels: 1.2120 1.2075 1.2030
Resistance levels: 1.2180 1.2230 1.2280
USDJPY
The USD/JPY pair is ending Monday unchanged around 104.30, recovering from a fresh December low of 103.50. The pair fell on the broad dollar’s weakness, amid an optimistic mood, and recovered with falling equities and a sour sentiment, with the market ignoring the yen’s safe-haven condition. US Treasury yields surged but trimmed part of their intraday gains during the American afternoon, limiting the upside for the pair.
On the data front, Japan published the Q4 Tankan survey, which showed that business sentiment has improved by more than anticipated, as the Large Manufacturing Index improved to -10 from -27, beating the -15 forecast. The country also reported October Industrial Production, which declined by 3% YoY, and Capacity Utilization was up 6% YoY, in line with their previous reading. Japan won’t release macroeconomic figures this Tuesday.
The USD/JPY pair is still on the bearish side, according to intraday technical readings. The 4-hour chart shows that the latest advance stalled around a mildly bearish 20 SMA, which develops below the largest ones. Technical indicators recovered from oversold readings but lost their bullish strength before reaching their midlines. The pair bounced from a critical support level, with the bearish potential set to increase only on a break below 103.50.
Support levels: 103.85 103.50 103.10
Resistance levels: 104.30 104.75 105.10
GBPUSD
The GBP/USD pair peaked at 1.3445 this Monday, gapping higher at the weekly opening on news indicating that the UK and the EU decided to extend negotiations into this week. Comments from EU’s chief negotiator Michel Barnier further fueled the pound’s rally, as despite noting that they are still far apart on fisheries, he believes that they could still reach a deal in the coming days.
The pair fell towards 1.3300 after British Health Secretary Matt Hancock announced London would be placed into the toughest tier of coronavirus restrictions starting on Wednesday, amid a sharp rise in infection rates. Hancock added that a new variant of the virus has been identified and that the health system is already under pressure.
The UK will publish on Tuesday its latest employment-related figures. The ILO Unemployment Rate for the three months to October is foreseen at 5.1% from 4.8% previously. The number of unemployed people in November is foreseen at 50K, after printing at -29.8K in the previous month.
GBP/USD short-term technical outlook.
The GBP/USD pair is trading well above its previous daily close, with the opening gap still open. The 4-hour chart shows that the price is battling around its 20 and 100 SMA, while far above the 200 SMA. Technical indicators trimmed oversold conditions and entered positive territory, currently at neutral levels. Directional movements will continue to depend on Brexit headlines, and the gap may remain unfilled.
Support levels: 1.3290 1.3240 1.3185
Resistance levels: 1.3350 1.3390 1.3440
AUDUSD
The AUD/USD pair is ending the day unchanged around the 0.7540 level but managed to post a fresh 2020 high of 0.7577. The pair remained confined to a tight intraday range despite the greenback’s swings against other rivals. Falling iron ore futures limited the aussie’s bullish potential, as the metal tumbled from fresh multi-year highs. On a positive note, the Australian currency was able to hold on to the higher ground, despite the sour tone of equities.
This Tuesday, the Reserve Bank of Australia will publish the Minutes of its latest monetary policy meeting. The document is not expected to bring surprises after policymakers remained on hold earlier this month.
The AUD/USD pair is in consolidation mode, losing bullish momentum but still far from bearish. The 4-hour chart shows that the price remains above a bullish 20 SMA, which remains above the larger ones. Technical indicators eased from overbought readings but hold within positive levels, with the RSI currently consolidating around 59, indicating the absence of selling interest.
Support levels: 0.7510 0.7470 0.7425
Resistance levels: 0.7580 0.7620 0.7660
GOLD
Gold lost its momentum on Monday and once again failed to capitalise weak look on the USD index DXY. The index continued to move in a tight range below the 91.00 level while the US 10-year retraced to sub-0.90% levels. As the Pfizer&BioNTech vaccine started to roll-out in the US, the vaccine optimism once again shadowed the stimulus deal expectations. In reality, there is still a long way for the vaccine to be effective in real life and the effect of the upcoming stimulus deal will be much more effective on the markets in the short term. Therefore, precious metals still have a chance to move-up as soon as the stimulus deal details are confirmed.
From the technical point of view, below the $1,860 level, the supports can be followed at $1,800, $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: $1,800 $1,763 $1,700
Resistance Levels: $1,900 $1,956 $2,000
SILVER
Silver continued to have a more balanced trading schema compared to Gold as the white metal managed to stay in a tight range while Gold had more volatile sessions. The Gold to Silver ratio keeps its correction to mid-76.00 levels while both Gold and Silver fail to capitalise the retracement seen in the USD index DXY. At this point, the vaccine roll-out in the US is dominating the markets more than the stimulus deal expectation. On the other hand, this might give investors an increased position for the precious metals for the short and mid-term. Also, for the long-term, Silver demand will most likely to increase with the boom expected to be seen in solar panel usage.
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
DOW JONES
Dow Jones failed to extend vaccine roll-out optimism on Monday and slid into the negative zone after extending its all-time high with a tick at 30,325 levels. Amid the latest reports that a $908 billion bipartisan coronavirus relief package set to be introduced in the US Congress as early as Monday will be split into two packages, US Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi has a 30-minutes call on Sunday, Pelosi spokesman Drew Hammill tweeted out. In a piece of welcome news, House No. 2 Democrat Steny Hoyer hinted that his party could be willing to accept an aid package without the state and local aid that Democrats have been insisting should be part of it. The Senate last week approved a one-week extension of federal funding to avoid a government shutdown and allow more time for negotiations on coronavirus relief and an overarching spending bill. As the stimulus deal dilemma transforms into a mini-Brexit type drama, the US Food and Drug Administration (FDA) announced the much-awaited authorization of Pfizer and BioNTech jointly developed a coronavirus vaccine for emergency use (EUA) late Friday.
Pfizer’s covid vaccine, which has shown 95% efficacy in a late-stage trial, will be available for the first inoculations early next week. Canada also authorized the vaccine and expects to start inoculations next week. On the other hand, the number of new cases and fatalities continues to hit record highs in the US as new lockdown measures are on the table.
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
WWIWITIIII
WTI tried to erase Friday’s losses testing $47.00 on Monday. While the roll-out of Pfizer&BioNTech vaccine in the US boosted the risk appetite on the markets, the effects in real life will take a long time. As the number of new cases and fatalities continues to hit all-time highs, London is going back to Tier 3 lockdown while Germany announced a nationwide lockdown until January. Also, New York mayor stated that they might consider going back to full lockdown. While the demand will be hurt due to lockdowns, OPEC+ is set to ease the production cuts gradually. On the other hand, the OPEC monthly oil market report revised lower its forecast for demand growth in 2021 by 350K barrels per day, further adding to the downbeat turn in sentiment.
Next supports can be seen at 45.00$, 43.88$ and 43.00$ respectively while the resistances can be followed at 47.00$ and 48.50$.
Support Levels: 45.00$ 43.88$ 43.00$
Resistance Levels: 46.00$ 47.00$ 48.50$
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
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