Morning Market Review

EUR/USD

EUR is again trading with positive dynamics against USD during today's Asian session, recovering to previous local highs after an uncertain correction the day before. The positions of EUR were somewhat weakened by the rather optimistic macroeconomic statistics from the US, while the European data did not have a noticeable effect on the dynamics of the market. Instead, investors widely discussed the speech of the ECB President Christine Lagarde, who noted that the regulator could follow the path of the US Fed and allow a short-term excess of the inflation target in order to "catch up" with the previous rates of economic growth. In addition, traders are still seriously concerned about the coronavirus situation. The second wave is likely to make significant adjustments to the current forecasts from leading regulators. Today, investors are focused on the publication of data on the Unemployment Rate in the euro area for August. Markets will also be watching a special summit of the EU heads who will gather to discuss the situations in Belarus and Nagorno-Karabakh.

GBP/USD

GBP shows growth against USD during today's morning session, updating local highs of September 21. GBP is strengthening against the backdrop of weak USD positions, as well as hopes for a trade agreement between the UK and the EU by the end of the year. Meanwhile, the US macroeconomic statistics published on Wednesday provided significant support to the USD. ADP's Employment Change report indicated an increase of 749K jobs in September after rising by 481K in the previous period. Analysts had expected an increase of 650K. However, it should be noted that the positive statistics from ADP was partially offset by news of large-scale layoffs at Walt Disney and Shell. Disney Corporation announced 28K job cuts, while Shell intends to lay off almost 9K of its employees. Today, British investors are awaiting a speech by Andrew Haldane from the Bank of England's Monetary Policy Committee.

NZD/USD

NZD maintains its "bullish" momentum during today's Asian session and is updating local highs since September 23. Buyers' activity is gradually decreasing, as the positions of USD look more and more attractive against the background of the existing risks in the global economy. Investors are noticeably concerned about the epidemiological situation in the world, which provokes an increase in demand for safe assets. In addition, the USA is preparing for the presidential election, which can also make significant adjustments to the dynamics of the market. In turn, support for NZD is provided by strong statistics from China. Chinese Non-Manufacturing PMI in September increased from 55.2 to 55.9 points with the forecast of the decline to 52.1 points. NBS Manufacturing PMI for the same period strengthened from 51 to 51.5 points, which also turned out to be better than market expectations of 51.2 points. Today, traders are focused on the data from the US on the dynamics of personal income and spending, and on business activity in the manufacturing sector.

USD/JPY

USD shows the flat dynamics of trading against JPY during today's morning session, consolidating after another update of local highs the day before. On Wednesday, USD updated its highs since September 15; however, the "bulls" failed to consolidate at new levels, despite the publication of a strong report from ADP. Buying activity in USD is significantly limited ahead of the release of the final report on the US labor market this Friday. Japanese data released today were controversial and did not provide any support to JPY. Tankan Large Manufacturing Index in Q3 2020 increased from –34 to –27 points, which turned out to be worse than the market expectations of an increase to –23 points. Tankan Non-Manufacturing Index for the same period strengthened from –17 to –12 points, while analysts expected growth to –9 points.

XAU/USD

Gold prices have returned to growth during today's Asian trading session in an attempt to recover to the previous local highs, updated the day before. USD received not the most confident impetus for growth yesterday, responding to the first debate between Donald Trump and Joe Biden, as well as from the publication of a rather strong ADP Employment Change report, which somewhat softened the general negative sentiment. At the end of the week, the September labor market report will be published in the US. According to forecasts, Non-Farm Payrolls could be reduced from 1.371M to 850K. In turn, the instrument feels support from the previous factors including the difficult epidemiological situation in the world and the upcoming elections in the US, which will become another source of uncertainty.

Morning Market Review

EUR/USD

EUR is showing weak gains against USD during today's Asian session, recovering from last Friday's decline, which turned out to be quite rich in various news drivers. First of all, the markets discussed Donald Trump's sudden quarantine in connection with a positive test for COVID-19. Investors fear that Trump will not be able to continue the political race in such conditions, with only about a month left before the presidential elections. Some pressure on the positions of EUR on Friday was exerted by the data from the eurozone. Consumer Price Index in September fell by 0.3% YoY, accelerating from the previous decrease by 0.2% YoY. Core Consumer Price Index for the same period decelerated from +0.4% YoY to +0.2% YoY, while forecasts assumed its growth to +0.5% YoY. On Monday, investors are focused on the European statistics on Markit Services PMI, as well as the August data on the dynamics of Retail Sales in the euro area.

GBP/USD

GBP is showing flat dynamics of trading during today's morning session, maintaining a weak "bullish" advantage, preserved from last week. GBP buying activity is noticeably weakening amid new statements by Boris Johnson, who reiterated that the UK will be able to do without a trade agreement with the EU after the Brexit transition period ends at the end of the year. However, the Prime Minister stressed that he would like a different outcome of the situation, but so far the parties are faced with insurmountable contradictions during the negotiations. The US macroeconomic statistics released on Friday had an ambiguous impact on the market dynamics. In September Non-Farm Payrolls showed growth only by 661K new jobs, while last month was marked by an increase of 1.489M. Experts expected the growth by 850K. At the same time, the Unemployment Rate in the USA in September has steadily decreased from 8.4% to 7.9% against the forecast of 8.2%.

AUD/USD

AUD is trading in both directions against USD in the ultra-short term, being located near its local highs and the level of 0.7200. Investors reacted rather restrainedly to Friday's data on the US labor market, because Donald Trump's positive test for COVID-19 became the main subject of speculation unexpectedly for everyone. The news of the US President's illness increased the uncertainty ahead of the upcoming November elections, and helped to reduce the demand for risky assets. Moderate support for AUD at the beginning of the week is provided by macroeconomic statistics from Australia. Commonwealth Bank Services PMI in September rose from 50 to 50.8 points, which was better than the neutral forecasts of analysts. Commonwealth Bank Composite PMI for the same period strengthened from 50.5 to 51.1 points. TD Securities Inflation data in September reflected growth by 0.1% MoM and 1.3% YoY, which was in line with previous estimates.

USD/JPY

USD is gaining strength against JPY during today's Asian session. The instrument adds about 0.23% and is testing the level of 105.60 for a breakout. USD again received an impulse to grow as a safe-haven currency after Donald Trump tested positive for coronavirus, which became the main topic of speculation at the end of last week. Japanese statistics, published on Friday, failed to provide significant support to JPY. The Unemployment Rate in August rose from 2.9% to 3.0%, which was expected. Jobs / Applicants Ratio in August decreased from 1.08 to 1.04 against the forecast of 1.05. At the same time, the Consumer Confidence Index in September rose from 29.3 to 32.7 points, which, however, did not meet investors' expectations at 33.8 points.

XAU/USD

Gold prices are declining during today's Asian session, developing a correctional decline since last Friday, when the instrument retreated from its local highs since September 22. The appearance of "bearish" trend was facilitated by the corrective sentiment in the market, which intensified at the end of last week with the unexpected message about Donald Trump's positive test for coronavirus. Now investors are trying to predict the possible consequences of the forced quarantine of the US President, which is especially important on the eve of the presidential election, which is only a month away. Trump's rival for the presidency, Joe Biden, has also drawn attention in this regard. Analysts do not exclude the possibility of postponing the elections in the event of a hypothetical infection of Biden.

Morning Market Review

EUR/USD

EUR is showing ambiguous trading dynamics during today's Asian session, consolidating at 1.1730. The day before, EUR showed a steady decline and retreated from its local highs since September 21, which was associated with a rather unexpected statement from Donald Trump, who suspended negotiations on a new program to support the US economy until the November elections. Interestingly, Trump made this statement just a few hours after the speech by the US Fed Chairman Jerome Powell, who reiterated the urgent need for new stimulus measures and pointed out the risks of a recession in the American economy. The President of the ECB Christine Lagarde also spoke about the need for new support measures on Tuesday, reminding the markets that the regulator is still able to reduce rates to negative values.

GBP/USD

GBP is trading with multidirectional dynamics during today's morning session, slightly recovering after the active decline the day before, which interrupted the uncertain "bullish" trend for the instrument since September 24. GBP reacted with a confident fall to the statements of Donald Trump, who decided to end the controversy over a new stimulus program for the US economy and postponed this process until after the November presidential elections. Investors were disappointed with these statements, as at the beginning of the week the market was dominated by direct opposite sentiments and traders were selling USD on growing expectations of a quick approval of a new package of measures. Today, traders are focused on the US Fed Meeting Minutes and the speech by the Fed representative John Williams.

AUD/USD

AUD shows a slight increase against USD during today's Asian session, correcting after an active decline yesterday, which was triggered by a new wave of growth in investor demand for safe assets. USD has significantly strengthened after Donald Trump's statement on the decision to postpone the discussion of a new package of measures to support the American economy until the November presidential elections. Some pressure on AUD on Tuesday was also exerted by the decision of the RBA to keep interest rate at 0.25%. However, despite extensive discussion of the possibility of further rate cuts, little was expected from the regulator at the current meeting. The dynamics of Exports was much more disappointing, as the figure fell by 4.2% MoM in August after falling by 3.4% MoM in the previous month. Against the background of a slowdown in Imports from +6.2% MoM to +2% MoM, this led to a sharp decrease in the Trade Surplus from AUD 4.652B to AUD 2.643B, which turned out to be significantly worse than market expectations at AUD 5.154B.

USD/JPY

USD has shown a slight increase during today's morning trading session, recovering from an uncertain decline the day before, which did not allow USD to consolidate at new local highs since September 15. The market has actively reacted to Donald Trump's intention to suspend the process of discussing new support measures for the American economy, but JPY is already in high demand as a safe haven currency today. The speech of the US Federal Reserve head Jerome Powell also contributed to the reduction of the demand for risk on Tuesday. The Chairman of the regulator noted that the process of recovery of the American economy is far from complete and there are still significant downside risks on the market, associated with the renewed increase in the incidence of coronavirus. Powell called for support for households, but now it seems that this will have to wait a while, unless party representatives are able to take the initiative and make significant concessions.

XAU/USD

Gold prices are showing ambiguous dynamics during today's Asian session, staying below 1900.00, the breakdown of which was recorded the day before. The strengthening of the "bearish" dynamics on Tuesday was associated with a rather unexpected statement by Donald Trump, who decided to suspend the negotiations on a new fiscal stimulus package until the end of the presidential elections in November. The President's statement came against the backdrop of numerous calls for further support for the American economy, as well as against the backdrop of outlined progress in the discussions (at the beginning of the week, regular talks were held between House Speaker Nancy Pelosi and US Treasury Secretary Steven Mnuchin).

Morning Market Review

EUR/USD

EUR is showing moderate gains against USD during today's Asian session, recovering to previous local highs, updated on October 6. Market sentiment is gradually improving after the softening of the position of Donald Trump, who earlier announced the suspension of negotiations on a financial assistance program for the American economy. The US President said that he would consider the possibility of direct support of the labor market through an increase in unemployment benefits, if such a bill is formed. As for the full-scale package of measures, Trump plans to return to its consideration after the presidential elections, of course, if he manages to win them. Some support for EUR on Thursday was provided by the ECB September meeting minutes, which again reflected the readiness of the regulator to go for additional easing of the monetary policy if necessary.

GBP/USD

GBP is trading positively against USD during today's morning session, developing ultra-short-term "bullish" momentum and returning to local highs of last Tuesday. Risk demand is gradually recovering towards the end of the week, as investors react to Donald Trump's adjustment on stimulus measures for the economy. Earlier Trump suspended negotiations on a new program to support the American economy until the end of the presidential elections, but then announced his readiness to consider certain direct initiatives aimed at supporting the labor market, the aviation sector, and a number of other problematic areas. On Friday, investors are focused on macroeconomic statistics from the UK on the dynamics of GDP and industrial production for August. The published data will later be commented on by the representative of the Bank of England Andrew Haldane.

AUD/USD

AUD is strengthening against USD in trading this morning session, developing an ultra-short-term uptrend and again approaching 0.7200. In addition to the improvement in market sentiment associated with the softening of Donald Trump's stance on stimulating the US economy, the instrument is supported by good macroeconomic statistics from Australia and China on Friday. Home Loans issued in Australia in August rose by 13.6% YoY after increasing by 10.7% YoY last month. Investment Lending for Homes also increased markedly by 9.3% YoY in the same period after increasing by 3.5% YoY in the previous month. The Chinese data was encouraging by further gains in the Caixin PMI. In the services sector, the September indicator rose from 54 to 54.8 points, which turned out to be much better than the forecasts for a decrease to 50.7 points.

USD/JPY

USD is falling against JPY during today's Asian session, retreating from local highs since September 14, updated last Wednesday. The emergence of negative dynamics for the instrument is due to technical factors, as well as a restrained increase in optimism in the market after new statements by Donald Trump regarding certain measures to support households and companies. JPY is also slightly supported by today's macroeconomic data from Japan. Labor Cash Earnings in August fell by 1.3% YoY instead of the expected decline by 1.5% YoY. Overall Household Spending in Japan also slightly improved in August: from –7.6% YoY to –6.9% YoY, which coincided with the estimates.

XAU/USD

Gold prices are significantly strengthening during today's Asian session, responding to corrective sentiment for USD, which is declining amid hopes for partial support of the American economy. Donald Trump urged to support airlines, which are preparing mass layoffs of employees due to the crisis. Direct assistance is also possible for individual small businesses that have found themselves in a difficult situation. Macroeconomic statistics from the US released on Thursday also exerted some pressure on USD. Initial Jobless Claims for the week ending October 2 declined from 849K to 840K, which was worse than projected decline to 820K.

WTI Crude Oil: prices are falling

Current trend

Today during the Asian session, oil prices are consolidating near $39.50 per barrel after a two-day “bearish” rally. At the start of the week, quotes were under pressure by increased market supply as US oil producers resumed their work in the Gulf of Mexico as Hurricane Delta moved inland. Also, production is increasing in Libya, where the largest field, El Sharara, has resumed its work. Finally, Norwegian oil workers have ended their strike, which should also help boost oil production.

On Tuesday, investors are focused on the statistics from the US on consumer inflation and the API report on oil reserves for October 9. The previous publication reflected a slight increase of 0.951 million barrels.

Support and resistance

On the daily chart, Bollinger bands are moving flat. The price range remains virtually unchanged, remaining spacious enough for the current level of market activity. The MACD indicator is stretching into the line near the zero line. At the moment, the indicator readings are not informative enough. Stochastic, on the other hand, maintains a confident downward trend, which hardly correlates with the real dynamics in the market.

It is better to wait until the market situation becomes clear to open new trading positions for the instrument.

Resistance levels: 39.57, 40.00, 40.60, 41.43.
Support levels: 38.97, 38.62, 38.00, 36.75.

EUR/USD: waiting for new drivers

Current trend

EUR is trading in different directions against USD during today's morning session, waiting for new drivers. The trading on Wednesday was also mixed, which was facilitated by the low demand for risk, as well as the weak position of USD against the background of vague prospects for new stimuli in the US.

The statistics from the eurozone released on Monday put additional pressure on EUR. Industrial Production in August fell sharply from 5% MoM to 0.7% MoM, which turned out to be slightly worse than market expectations at +0.8% MoM. In annual terms, the decline in production accelerated from –7.1% YoY to –7.2% YoY, which, however, coincided with the forecasts. European investors are focused on the speech of ECB President Christine Lagarde before the start of the IMF and European Council meetings at the end of the week.

Support and resistance

Bollinger Bands in D1 chart show unsteady growth. The price range is narrowing, reflecting ambiguous dynamics of trading in the short term. MACD reversed downwards having formed a new sell signal (located below the signal line). In addition, the indicator tests the zero mark for the breakdown. Stochastic keeps a confident downward direction but is already approaching its lows, which indicates the risks of oversold euro in the ultra-short term.

Existing short positions should be kept until technical indicators are clarified.

Resistance levels: 1.1780, 1.1806, 1.1850, 1.1881.
Support levels: 1.1732, 1.1700, 1.1657, 1.1625.

WTI Crude Oil: oil prices are consolidating

Current trend

At the beginning of the week, oil prices show flat dynamics, holding near the level of $40.50 per barrel. Yesterday, the instrument was slightly supported by renewed hopes that a new stimulus package in the United States will be adopted before the presidential elections in November. However, by the close of the daytime session, optimism in the sentiment declined, and investors returned to discussing other problems.

A new growth factor may be the upcoming OPEC+ meeting in Vienna, where the cartel and its allies are expected to adjust the current program to reduce the supply of "black gold" to the market, as well as clarify the prospects for a gradual recovery in oil production next year.

On Tuesday, investors are focused on the American Petroleum Institute's report on oil reserves for the week of October 16. The previous publication reflected a sharp decline of 5.42 million barrels.

Support and resistance

On the daily chart, Bollinger bands move flat. The price range narrows slightly from below, remaining spacious enough for the current level of market activity. The MACD indicator slightly decreases, maintaining a poor sell signal (the histogram is below the signal line). Stochastic reversed at 80 and signals in favor of developing a corrective decline in the ultra-short term.

It is better to wait for the clarification of signals from technical indicators for opening new trading positions.

Resistance levels: 41.00, 41.43, 42.00.
Support levels: 40.00, 39.57, 38.97, 38.62.

EUR/USD: EUR is declining

Current trend

EUR shows moderate decline against USD today, retreating from local highs since September 16, updated the day before. Technical factors were the reason for the appearance of the "bearish" trend for the instrument, while USD remains under pressure amid expectations of new measures to support the American economy.

The deadline for the ultimatum put forward by the House of Representatives Speaker Nancy Pelosi expired the day before, but she chose to extend the deadline for one more day. In turn, Donald Trump has stepped up pressure on the Republican Party in an attempt to approve a larger aid package.

On Thursday, in addition to news regarding the long-awaited stimulus measures for the US, investors expect the publication of data on jobless claims in the US. Interesting data from Europe will appear on Friday, when the business activity indicators for October are released in Germany and the eurozone.

Support and resistance

Bollinger Bands in D1 chart show moderate growth. The price range is expanding from above, but it fails to catch the development of "bullish" trend at the moment. MACD indicator is growing preserving a stable buy signal (located above the signal line). Stochastic keeps the uptrend but is approaching its highs, which reflects the risks of overbought EUR in the ultra-short term.

Technical indicators do not contradict the further development of the "bullish" trend in the short and/or ultra-short term.

Resistance levels: 1.1850, 1.1879, 1.1916, 1.1950.

Support levels: 1.1830, 1.1800, 1.1763, 1.1732.

Morning Market Review

EUR/USD

EUR is falling against USD during today's Asian session, again consolidating near local highs, updated in the middle of last trading week. The pressure on EUR remains amid the ambiguous prospects for the global economy, which faced a second wave of COVID-19 and a number of restrictions imposed mainly by European countries. Macroeconomic statistics on business activity in the eurozone released last Friday were disappointing. Markit Services PMI in October declined from 48 to 46.2 points with the forecast of the decline to 47 points. At the same time, Manufacturing PMI for the same period increased from 53.7 to 54.4 points, which turned out to be better than the forecasts of growth to 53.1 points. The Composite PMI in October fell below the psychological level of 50 points to 49.4 points, which, in general, was in line with market expectations.

GBP/USD

GBP is trading with negative dynamics against USD since the opening of a new trading week, developing a fairly strong "bearish" momentum, which was formed in the middle of last week. The instrument almost completely ignored the strong UK Retail Sales statistics released on October 23. The data reflected Retail Sales growth by 1.5% MoM in September after rising by 0.9% MoM in the previous month. Analysts had expected a slowdown in the index to 0.4% MoM. On an annualized basis, sales rose by 2.7% to 4.7% YoY, which was also better than average forecasts of 3.7% YoY. Business activity statistics were significantly worse. Markit Manufacturing PMI fell in October from 54.1 to 53.3 points, which was only 0.2 points better than market expectations. Services PMI fell from 56.1 to 52.3 points with the forecast of falling to 54 points.

AUD/USD

AUD declines against USD during today's morning session, correcting after an uncertain rise in the instrument at the end of the last trading week. The pair is under pressure from the corrective growth of USD, while the fundamental picture of the market changes insignificantly. AUD also reacts sluggishly to the macroeconomic statistics from Australia released on Monday. Exports from Australia increased by 3% in September after falling by 4.2% in the previous month. Imports for the same period fell by 1% after rising by 2% in August. Such a significant discrepancy between the dynamics of imports and exports led to an increase in the trade surplus almost doubled, from AUD 2.643B to AUD 5.114B. Today, investors are focused on statistics from the United States on the dynamics of New Home Sales and Chicago Fed National Activity Index for September.

USD/JPY

USD has shown strong gains against JPY during today's Asian session, preparing to test the strong resistance at 105.00. Moderate support for USD is provided by the macroeconomic statistics from the US on business activity published at the end of the last trading week. Markit Manufacturing PMI in October showed a slight increase from 53.2 to 53.3 points, which fell slightly short of market expectations. In turn, Services PMI for the same period increased from 54.6 to 56 points, while analysts did not expect any changes in the indicator at all. Markit Composite PMI in October rose from 54.3 to 55.5 points.

XAU/USD

Gold prices show flat dynamics during today's morning session, consolidating near 1900.00. The instrument has been declining since last Thursday, when USD managed to show corrective growth in response to mixed messages regarding the new economic stimulus package in the US. After repeatedly saying that it would be extremely difficult to reach an agreement before the November US elections, House Speaker Nancy Pelosi announced "significant progress" on the deal and said new measures could be approved "very soon". The presidential elections in the United States will take place next week, on November 3.

EUR/USD: the euro is declining

Current trend

EUR has been declining against USD during today's Asian trading session, building on the "bearish" momentum that formed earlier this week. Risk demand remains under pressure again amid an alarming rise in the global incidence of COVID-19.

Investors are also disappointed with the approval process for a new stimulus package for the US economy. Despite all the efforts of US lawmakers, it seems that there will be no results before the November elections. The Senate majority leader Mitch McConnell decided to postpone the meeting until November 9, which practically puts an end to the last hopes of reaching agreement on the deal. The bailout and stimulus package was not approved due to the principled position of the Senate, which did not agree to Donald Trump's proposal to approve a larger aid package.

Support and resistance

In the D1 chart, Bollinger Bands are reversing horizontally. The price range consolidated within rather wide boundaries, which correspond to the observed dynamics in the market. MACD is going down preserving a moderate sell signal (located below the signal line). Stochastic is declining almost vertically, rapidly approaching its lows, indicating the risks of oversold EUR in the ultra-short term.

Existing short positions should be kept until technical indicators are clarified.

Resistance levels: 1.1800, 1.1830, 1.1850, 1.1879.
Support levels: 1.1763, 1.1732, 1.1700, 1.1657.

GBP/USD: the instrument is declining

Current trend

GBP is trading near zero against USD during today's Asian trading session, consolidating near 1.2900, which was actively tested the day before. Quite good data from the USA provided some support to USD yesterday. The dynamics of US GDP in Q3 2020 showed a steady growth of 33.1% YoY, fully compensating for an equally active decline of 31.4% in the previous quarter. Analysts had expected growth rate at 31% YoY. Initial Jobless Claims for the week ending October 23 fell from 791K to 751K, which turned out to be better than the projected 775K.

British investors, in turn, reacted negatively to the fall in Consumer Credit in September by GBP 0.6B after rising by GBP 0.285B last month. Analysts expected growth of GBP 0.75B.

Support and resistance

In the D1 chart, Bollinger Bands are reversing horizontally. The price range is expanded from below reflecting rise of "bearish" sentiment in the short term. MACD is going down preserving a stable sell signal (located below the signal line). The indicator is trying to consolidate below the zero level. Stochastic keeps a confident downward direction but is already approaching its lows, which indicates the risks of oversold GBP in the ultra-short term.

Existing short positions should be kept until technical indicators are clarified.

Resistance levels: 1.2960, 1.3000, 1.3081, 1.3125.
Support levels: 1.2900, 1.2850, 1.2800, 1.2761.