Daily Market Report - 14th Aug 2020

$50 Free Margin Account Campaign: 

https://www.nooralmal.com/cc19...

EURUSD

The EUR/USD pair has reached a fourth consecutive daily high this Thursday, hitting 1.1863 at the beginning of the US session, later retreating towards the current 1.1800 price zone. The dollar was out of the market’s favor for most of the day, only finding support in upbeat local data. US Initial Jobless Claims for the week ended August 7 fell to 963K, the first time below 1M since mid-March. Continuing Jobless Claims for the week ended July 31, shrank to 15.486M, also beating the market’s expectations. However, the news also gave support to equities, which traded with a sour tone in the first two sessions on the day.

In Europe, Germany reported July inflation, which remained unchanged at -0.1% YoY, failing to trigger some action across the board. This Friday, the EU will report the second estimate of the Q2 GDP, foreseen unchanged at -12.1%. The US, on the other hand, will publish July Retail Sales, seen up by 1.9%, and the preliminary estimate of the August Michigan Consumer Sentiment Index, seen at 72 from 72.5 in the previous month.

The EUR/USD pair has partially lost bullish strength, but a downward movement seems unlikely at the time being. The 4-hour chart shows that the pair keeps developing above all of its moving averages, with the 20 SMA currently heading marginally higher at around 1.1780. Technical indicators in the mentioned time-frame, have eased from weekly highs, the Momentum heading south within positive levels and the RSI currently flat at around 54.

Support levels: 1.1780 1.1730 1.1690

Resistance levels: 1.1870 1.1915 1.1950

USDJPY

The USD/JPY has reached a fresh high this Thursday, surpassing the previous one to reach 107.04, ending the day with gains just below the 107.00 level. The pair started the day with a soft tone, falling to 106.56 on the back of a weaker dollar and stocks trading in the red. The dollar got to recover against its Japanese rival with the release of encouraging US employment figures, which also underpinned Wall Street. Meanwhile, US Treasury yields advanced further with the same data, resulting in the yield on the 10-year note reaching 0.73%.

Japan published at the beginning of the day the July Producer Price Index, which was up 0.6% in the month, and down 0.9% when compared to a year earlier, both figures beating expectations. Machine Tool Orders, in the same month, plummeted 31.1% YoY. This Friday, Japan will publish the June Tertiary Industry Index, previously at -2.1% MoM.

The USD/JPY pair is bullish in the short-term and according to the 4-hour chart. The mentioned time-frame shows that the intraday slide met buyers around a directionless 200 SMA, as the 20 SMA keeps advancing above the 100 SMA, now approaching the larger ones. Technical indicators, in the meantime, turned higher, favoring a bullish extension in the near-term.

Support levels: 106.55 106.10 105.70 

Resistance levels: 107.45 107.90 108.30

GBPUSD

The Sterling recovered some ground against its American rival this Thursday, although the pair continued trading within familiar levels. GBP/USD stands at daily lows around 1.3050 ahead of the Asian opening, down from a daily high of 1.3124. The UK didn’t publish relevant macroeconomic data, but chief negotiator David Frost said that he believes an agreement can be reached next month. “We are not looking for a special agreement, we want a deal with at its core a free trade agreement like the one the EU has with Canada." Later in the day, UK PM Johnson repeated that "there's a very very good case for the EU to strike a zero tariff zero quota deal."

Meanwhile, concerns mount amid the UK reporting over 1,000 new coronavirus daily cases for a third consecutive day. UK PM Johnson has been pressuring schools to reopen, although the increased number of new contagions may result in new lockdowns instead of reopenings, with pubs and restaurants in the front of the fire line. The kingdom will end the week without releasing macroeconomic data.

The GBP/USD pair has lost its bullish potential according to intraday readings. The 4-hour chart shows that the pair is now below the 20 SMA, which anyway lacks directional strength, yet above bullish larger ones. Technical indicators, in the meantime, have extended their declines within negative levels, supporting a bearish extension in the upcoming sessions. At this point, the pair needs to break below 1.2980 to confirm a bearish extension in the following sessions.

Support levels: 1.3030 1.2980 1.2940

Resistance levels: 1.3105 1.3150 1.3190

AUDUSD

The AUD/USD pair peaked at 0.7187 at the beginning of the day, helped by encouraging Australian employment figures. According to the official release, the country added 114.7K new jobs in July, largely surpassing the 40K expected. Of such total, 43.5K were full-time positions. Also, the unemployment rate increased to 7.5%, better than the 7.8% expected. The country also released August Consumer Inflation Expectations were up 3.3% better than the previous 3.2% although below the 3.4% forecast. The negative tone of equities in Asia and Europe, however, capped advances in the pair, which now trades at around 0.7140, marginally down for the day.

Friday will be quite a busy day, starting with data coming from China, The country will publish July Industrial Production, foreseen at 5.1% YoY, and Retail Sales for the same month, seen up by 0.1% YoY. Australia won’t publish relevant macroeconomic data, but RBA’s Governor Lowe is due to testify before the House of Representatives' Standing Committee on Economics.

The 4-hour chart for the AUD/USD pair shows that the pair has broken below its 20 and 100 SMA, both converging around 0.7160 and providing dynamic resistance. Technical indicators, in the meantime, maintain their bearish slopes within negative levels, anticipating a new leg south. The immediate support is the weekly low at 0.7110, followed by a more relevant one at 0.7070.

Support levels: 0.7110 0.7070 0.7030

Resistance levels: 0.7185 0.7220 0.7260 

GOLD

After the sharp decline seen in Gold which pushed the yellow metal back 1.860$ this week, a sharp reversal carried the safe haven back to 1.950$ level. The USD index DXY declined a tick below 93.50 level and 10-year yield in the US hit %0.69 as the highest level in a month. The decline seen in the initial jobless claims in the US did not help the risk sentiment on Thursday and Wall Street indexes except Nasdaq gave away their gains. The latest surprise decline gave investors a big chance to buy Gold as current monetary policies around the world will support non-yielding metal. Also, the uncertainty regarding the coronavirus pandemic and the elections in the US combined with the rising tensions between the US and China supporting the safe-haven demand.   

As long as Gold stays over 1.950$, the targets upside can be followed at 1.980$ (previous all-time high), 2.000$ and 2.040$ levels. Below the 1.950$ the supports can be followed at 1.920$, 1.900$ and 1.825$ (2011 August close) levels.

Support Levels: 1.920$ 1.900$ 1.825$

Resistance Levels: 1.980$ 2.000$ 2.040$

CRUDE WTI

No news on the WTI front as the American crude is still keeping its consolidation zone between 40.00$ and 43.00$. Earlier in the day, the International Energy Agency (IEA) in its monthly report announced that it revised down the 2021 crude oil demand estimate by 240,000 barrels per day to 97.1 million barrels per day. The IEA further noted that it sees the global oil demand declining by 8.1 million barrels per day in 2020 due to weak jet fuel demand. "The upsurge in COVID-19 cases has prompted a downgrade of the H2 demand estimate for gasoline," the IEA explained. As the historic crash in last April recovered, the only setback for WTI is the uncertainty about the direction of the coronavirus pandemic. Today’s industrial production and retail sales data sets from China will affect the oil prices as China is the world's second-biggest energy consumer.   

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 once again rejected at 28.000 level on Thursday. Wall Street had a mixed mood as Dow Jones and S&P were both down around %0.4, Nasdaq managed to print marginal gains. There is still no clear resolution for the new stimulus bill as Coronavirus aid talks are being held up over post office money," US President Donald Trump told Fox Business Network on Thursday. Democrats' demand for election funding in the COVID-19 aid bill is also an issue that is holding up talks, Trump further added. On the data side, the US Initial Jobless Claims for the week ended August 7 fell to 963K, the first time below 1M since mid-March and Continuing Jobless Claims for the week ended July 31, declined to 15.486M, beating the market’s expectations. However, the upbeat labour daya did not help the mood to recover in Wall Street.   

If Dow Jones keeps its stance over 27.000 level decisively, 27.583 (June 2020 high), 28.000 and 28.402 levels can be followed as resistances. Below the 27.000 level, the supports can be followed at 26.000, 25.210 (29.568-18.158 %61.80) and 24.690 (2020 April-May resistance) levels.     

Support Levels: 26.000 25.210 24.690

Resistance Levels: 27.583 28.000 28.402

XAGG

Silver also managed to erase a significant portion of its current losses alongside Gold. As the current sharp decline caused silver bulls to increase their positions, also the decrease in the USD index DXY helped precious metals although the retracement was limited. As a proof of the latest volatile moves seen in precious metals trade, CME Group, the world's leading and most diverse derivatives marketplace, today announced that Precious Metals markets reached a record volume of 1.55 million contracts on August 11, surpassing the previous record of 1.51 million set February 28, 2020. A record 397,000 Silver futures contracts were traded on August 11, 2020, surpassing the prior record of 329,000 set on August 7, 2020. The primary support for Silver will most likely arrive when the global industrial production fully recovers as the physical demand will increase alongside the production activity.   

If Silver manages to stay over 27.00$, next targets upside might be followed at 29.28$ (March 2013 resistance), 30.00$ and 32.00$ levels. Below the 27.00$ level, the supports might be followed at 25.00$ and 24.00$ levels.

Support Levels: 27.00$ 25.00$ 24.00$

Resistance Levels: 29.28$ 30.00$ 32.00$

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.

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

#美元走强，反弹还是反转##黄金狂野巨震##美国二季度GDP创最纪录萎缩##美联储按兵不动##A股里程碑，新沪指上线#