Daily Market Report - 17th Nov 2020

NCM Investment - The Festival of GOLD

OPEN ACCOUNT AND GET A CHANCE TO WIN GOLD

For more details: https://www.nooralmal.com/gold...

Official Website: https://www.nooralmal.com/

EURUSD

The market started the week in a positive mood, with the EUR/USD pair reaching a daily high of 1.1869 during the Asian session. Positive news related to the Moderna coronavirus vaccine kept equities running throughout the different sessions, while the dollar found some short-lived demand ahead of the American opening after the company reported its experimental vaccine is 94.5% effective in preventing COVID-19, while its conservation requirements are quite standard. Optimism persists as the day comes to an end, although demand for the greenback eased.

The Union did not publish relevant data, while the US released the November NY Empire State Manufacturing Index, which resulted at 6.3, below the previous 10.5 and the expected 13.5. This Tuesday, the EU will release September Construction Output data, while the US will unveil October Retail Sales, this last, seen up 0.5% MoM.

The EUR/USD pair trades around 1.1840, unchanged from Friday’s closing level. The short-term picture keeps favoring the upside. The 4-hour chart shows that the pair has met buyers when nearing its 20 SMA, which remains above the larger ones. Technical indicators remain within positive levels, although lacking clear directional strength. The bearish case will be clearer on a break below 1.1790, while bulls will have better chances on a break above 1.1885.

Support levels: 1.1790 1.1740 1.1695 

Resistance levels: 1.1885 1.1920 1.1965

USDJPY

The USD/JPY pair is finishing the day with modest losses around 104.50, retreating from a daily high of 105.13. The pair enjoyed some substantial demand after the announcement of Moderna about its potential coronavirus vaccine, as the company reported high levels of effectiveness alongside limited side-effects. The pair gave up as quickly as it advanced, as interest for the greenback was quite limited.

 Japan published the preliminary estimate of Q3 GDP, which came in better than expected, as the economy grew 5% in the quarter and 21.4% when compared to a year earlier. Also, Industrial Production in the country increased by 3.9% MoM in September, slightly below the expected 4%, while Capacity Utilization in the same period surged 6.4%. The country won’t release macroeconomic data this Tuesday.

The USD/JPY pair could extend its decline in the upcoming sessions, according to intraday technical readings. The 4-hour chart shows that sellers rejected the advance around the 200 SMA, while the 20 SMA crosses below the larger ones. The pair is currently developing also below a directionless 100 SMA as technical indicators hold within negative levels, lacking directional strength.

Support levels: 104.35 103.95 103.50

Resistance levels: 104.75 105.20 105.65 

GBPUSD

The GBP/USD pair peaked for the day at 1.3242 amid the ruling upbeat mode but is ending the day in the red sub-1.3200, as the pound got hit by discouraging Brexit-related news. An EU official said that it might be too late already to clinch a trade deal, while UK PM Boris Johnson’s office said in a statement that they are confident that the UK will prosper if they fail to reach a trade deal with the EU.

Meanwhile, UK PM Johnson has self-isolated after having close contact with a coronavirus case, although he is well and without symptoms. PM Johnson has already contracted COVID-19 back in April. The number of COVID-19 contagions in the UK stays above 20K per day despite the ongoing restrictive measures. However, UK Secretary of State for Health and Social Care Matt Hancock, said he is hopeful a vaccination program will be ready to go next December. The UK calendar has nothing relevant to offer this Tuesday.

The GBP/USD pair is trading a handful of pips below the 1.3200 level, neutral in the near-term. The 4-hour chart shows that the price has spent the day hovering around a bearish 20 SMA, now a few pips above it. The larger moving averages remain well below the current level, while technical indicators lack directional strength around their midlines. The pair bottomed for the day at 1.3165, with further declines expected on a break below the level.

Support levels: 1.3165 1.3120 1.3070

Resistance levels: 1.3220 1.3260 1.3310

AUDUSD

The AUD/USD pair surged towards the upper end of its previous weekly gain, ending Monday with modest gains above the 0.7200 level. The Australian dollar surged alongside equities, which in turn were supported by renewed hopes about a coronavirus vaccine. Following the Pfizer announcement last week, it was the turn of Moderna to report progress on its covid-prevention treatment.

RBA’s Governor Philip Lowe hit the wires at the beginning of the day, and his words provide support to the local currency, as he repeated that negative rates in Australia are still extraordinarily unlikely, adding that economic growth is linked to keeping the pandemic under control. The central bank will release the Minutes of its latest meeting this Tuesday, although no surprises are expected from the document, after Lowe’s comments.

The AUD/USD pair holds on to gains, trading near the monthly high at 0.7339. The 4-hour chart shows that it advanced above a still flat 20 SMA, while the larger ones advance modestly below the shorter one. In the meantime, technical indicators hold near their daily highs within positive levels, although they have lost directional strength. The pair could grab bullish momentum once beyond 0.7345, the immediate resistance level.

Support levels: 0.7290 0.7250 0.7210  

Resistance levels: 0.7345 0.7380 0.7420

GOLD

Another risk rally sparked by the news from Moderna as they announced that the latest trial showed that its coronavirus vaccine candidate was 94.5% effective. Additionally, the company said that the vaccine is expected to remain stable at standard refrigerator temperatures of 2° to 8°c for 30 days, per Reuters. However, this time the risk rally was short-lived at least for Gold as the yellow metal tested its stronghold at $1,860 before erasing its daily losses. On the other hand, the US indexes rallied while the USD index DXY remained sub-93.00. Gold at this point is driven by the pandemic risk factors and FED’s policy. As the Democrats were in favour of a bigger stimulus deal, USD might face further pressure unless the macro data readings favour less than expected aid level. Therefore, the coming term might be supportive for Gold in terms of monetary policy while vaccine developments might limit the yellow metal’s gains.    

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 was not affected by the vaccine news from Moderna as the pharma companies preliminary phase three trial showed its coronavirus vaccine is more than 94% effective in preventing infection. Lately, the white metal managed to protect its trading range compared to Gold as the yellow metal had more volatile sessions compared to Silver. Gold to Silver ratio continued to decline towards 76.00 levels indicating the strong outlook of Silver lately. On the other hand, as Biden is known as his supportive politics on renewable energy sources, Silver might find more demand due to its key role in solar panel production in 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 rallied to $42.00 level on Monday with the improved risk appetite and OPEC+ rumours. Following the Pfizer&BioNTecH vaccine announcement, Moderna today also announced the latest trial showed that its coronavirus vaccine candidate is 94.5% effective. The vaccine is expected to remain stable at standard refrigerator temperatures of 2° to 8°c for 30 days, per Reuters. Lately, WTI was put under pressure due to demand worries caused by the second wave of the pandemic. Also, stocks continued to build up due to the decline in demand. Apart from the positive developments about the vaccine, expectations that OPEC+ will extend their production cut further supported WTI on Monday. Later in the week, the usual reports on US crude oil inventories by the API and the EIA are due on Tuesday and Wednesday, respectively.       

If WTI manages to hold over $40.56 ($65.62-$0.00 61.80%) level, the targets upside can be followed at $41.00, $46.57 (March decline start) and $50.00 levels. Below $40.00, the supports can be followed at $39.00 and $32.81 ($65.62-$0.00 50.00%) and $31.00 levels.

Support Levels: $39.00 $32.81 $31.00 

Resistance Levels: $41.00 $46.57 $50.00

DOW JONES

Dow Jones started the week with another bullish gap testing its all-time high around 29,950 levels. Following Pfizer&BioNTech, Moderna today announced that their vaccine showed 94.5% effectiveness with much better operational conditions. The company said that the vaccine is expected to remain stable at standard refrigerator temperatures of 2° to 8°c for 30 days, per Reuters. The company also noted that the vaccine is expected to last for 6 months in shipping and long-term storage conditions at standard freezer temperatures of -20°c (-4°f) with millions of dozes waiting for shipment upon FDA authorization. Markets still ignore the record number of new cases in the US at the moment. A member of Joe Biden’s COVID-19 advisory team on Sunday rejected claims that the president-elect would force the country into another round of strict lockdowns as daily coronavirus cases reach new highs. As the US indexes cheered back to back positive vaccine developments, the USD index DXY remained calm hovering around sub-93.00 levels while the US 10-year yields rallied to 0.90 on Monday.       

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.

All Rights Reserved © Noor Al Mal