DailyMarketReport-20thNov2020

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EURUSD

The EUR/USD pair trades around 1.1850 as the American session comes to an end, recovering from a daily low of 1.1815 and up for the day. The American dollar benefited from a worsening market’s mood that kept European equities in negative territory throughout the day and also hit Wall Street. Investors’ concerns gyrated around coronavirus developments as the pandemic keeps spreading in the US and Europe, with the first toughening measures to curb the spread.

Macroeconomic data passed unnoticed, although the EU published the September Current Account, which posted a seasonally adjusted surplus of €25.2 billion, below the market’s expectations. Meanwhile, the US released Initial Jobless Claims for the week ended November 13. The report showed that 742K people filed for unemployment, worse than anticipated. The country also published the Philadelphia Fed Manufacturing Survey, which came in at 26.3, better than the 22 expected. October Existing Home Sales increased by 4.3%, beating expectations.

This Friday, Germany will publish the October Producer Price Index, while the EU will unveil the preliminary estimate of November Consumer Confidence, seen falling from -15.5 to -17.7. The US won’t release relevant macroeconomic reports.

The EUR/USD pair is neutral in the near-term, as the 4-hour chart shows that it has spent the day developing around a directionless 20 SMA now above it. The same chart shows that the 100 SMA converges with the 200 SMA, both lacking directional strength. The Momentum indicator holds within negative levels without favoring a particular bias, as the RSI advances around 55. The risk will skew to the downside only on a break below 1.1800.

Support levels: 1.1800 1.1760 1.1720

Resistance levels: 1.1885 1.1920 1.1965

USDJPY

The USD/JPY pair is ending this Thursday as it started trading in the 103.80 price zone. It peaked for the day at 104.21 but quickly trimmed intraday gains undermined by the prevalent dismal mood. Investors are still pricing in the latest coronavirus developments in the US and the possibility of an economic contraction in Q4. Equities traded with a heavy tone but finished mixed and not far from their opening levels. Government bond yields hovered near weekly lows, also trading dully.

The Japanese macroeconomic calendar has nothing relevant to offer early Thursday, but the country will publish October National inflation this Friday. The annual CPI is expected at -0.3% worsening from 0%.

The USD/JPY pair is still at risk of falling. The 4-hour chart shows that sellers surged around a firmly bearish 20 SMA, which extended its slide below the larger ones. In the mentioned time-frame, technical indicators remain within negative levels, the Momentum correcting higher, but the RSI consolidating around 36, indicating absent buying interest.

Support levels: 103.50 103.15 102.80

Resistance levels: 103.95 104.25 104.70 

GBPUSD

The GBP/USD pair fell during Asian trading hours, weighed by a dismal market mood and market talks, indicating that some EU leaders are pushing the European Commission to publish Brexit no-deal plans. Sources suggested that a deal must be clinched this weekend at the latest. The pair bounced from a daily low at 1.3204 following news that EU’s chief negotiator Michel Barnier canceled next week´s briefings to EU leaders, somehow suggesting that a trade deal may be closer.

Nevertheless, it is pure speculation, although enough to push the pair towards the 1.3260 price zone.

 The UK calendar was empty this Thursday, although the country will end the week on a high note. This Friday, it will publish November GFK Consumer Confidence, seen falling to -34 from -31, and October Retail Sales, expected to have gained 4.2%.

The GBP/USD pair seems to be developing a double top figure, yet to be confirmed. The potential neckline of the figure is 1.3106 and the pair would need a strong catalyst to lose the level. In the meantime, the 4-hour chart shows that the pair is below a bullish 20 SMA, pressuring, but unable to surpass it. Technical indicators have turned neutral-to-bearish, as the Momentum turned lower and the RSI consolidates, although both around their midlines.

Support levels: 1.3210 1.3165 1.3110

Resistance levels: 1.3270 1.3320 1.3360  

AUDUSD

The AUD/USD pair was under strong selling pressure at the beginning of the day, falling to 0.7254 on the back of risk aversion. It got to recover some ground during US trading hours, now trading around 07280, down for the day. The aussie enjoyed some short-lived demand following the release of upbeat Australian employment data. According to the official report, the country added 178.8K new jobs in October, much better than the -30K expected. The unemployment rate increased from 6.9% to 7%, below the expected 7.2%.

The announcement of lockdown in Southern Australia, however, weighed more. This Friday, the country will publish the preliminary estimate of October Retail Sales, seen up by 0.3% after falling 1.1% in the previous month.

The AUD/USD pair is neutral-to-bearish in the near term. The 4-hour chart shows that the 20 SMA lacks directional strength, providing dynamic resistance around 0.7300. The larger moving averages keep advancing below the current level. Technical indicators are slowly recovering from daily lows, lacking momentum, and still below their midlines. Still, the pair would need to break below 0.7170 to become bearish.

Support levels: 0.7250 0.7210 0.7170

Resistance levels: 0.7300 0.7345 0.7380  

GOLD

Gold extended its decline towards $1,850 as the yellow metal had its fourth consecutive trading day with losses. Despite the gloomy outlook seen on the pandemic, markets prefer to price the vaccine news and keep the risk appetite alive at the moment. The USD index DXY managed to protect 92.00 levels while the US 10-year yield had a big decline on Thursday testing 0.85 levels. Gold still can’t get over the impact of the vaccine news. At this point, Gold needs clarification on the stimulus deal and its impact on the USD to test its all-time high levels over $2,000.

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

CRUDE WTI

Vaccine hopes continue to keep WTI alive combined with expected OPEC+ intervention. Due to the EIA report on Wednesday, US crude oil supplies increased by a smaller-than-expected 768K barrels during last week also supported the prices. On the other hand, the effect of the much-anticipated vaccines will be seen in the long run while today’s reality is the re-announced lockdown measures with loss of demand. Therefore, vaccine news can fail to carry oil prices alone for the short term.   

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 tried to hold onto its gains on Thursday after hitting it’s all-time high last week with the vaccine news. The second wave of the pandemic hit the US and the rest of the world. New York City decided to close schools to fight with the spread of the pandemic while other states might be getting late to re-impose lockdown measures. There were 742,000 initial claims for unemployment benefits in the US during the week ending November 14th, the data published by the US Department of Labor (DOL) revealed on Thursday. This reading followed last week's print of 711,000 (revised from 709,000) and came in worse than the market expectation of 707,000. The weekly figures are still the highest in recorded history indicating the impact of the pandemic on the labour market.      

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

SILVER

Silver also extended its decline to a third consecutive day stuck between $24.70 and $23.70 levels. Markets are still digesting the vaccine news which keeps the risk appetite alive. Apart from the massive decline seen in Gold, Silver managed to protect its trading range better than the yellow metal. In the long run, as the central banks will be forced to inject more liquidity to markets, it is highly expected that the USD will decline while pushing the precious metals further close to their all-time highs.     

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

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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