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Analysis of currency and stock markets 20.09.2019

 AUDUSD Technical Analysis


The pair partially recovered against the background of being locally technically oversold. It has the potential to drop further amid the high probability of a rate cut by the RBA early next month.

The price is below the middle Bollinger band indicator, above SMA 5, but below SMA 14. RSI is rising, but still remains below the level of 50%. Stoch indicate growth.

Trade recommendations: 
Sell the pair with an intermediate target of 0.6780 and its further drop to 0.6700.

Amazon Stock Analysis

Amazon's stock is moving in a sideways incline under the ascending channel it has been trading in for two weeks

The 61.8% Fibonacci retracement is supporting the price and pushing it higher.

The price is currently moving between the 20 MAs from the bottom and 50 from the top which form support and resistance levels.

Stochastic is bullish after reaching oversold area and rebounding. Thus, it could push the price and push it to test the resistance at SMA 50

General direction of movement: Neutral

AUD Analysis 

The Australian dollar fluctuated in a narrow range tilted to decline during the Asian session to witness the rebound to the seventh session from its highest since late July against the US dollar amid the lack of economic data on Friday by the Australian economy and on the eve of FOMC members John Williams The Federal Reserve Bank of New York and Eric Rosengren are chairman of the Boston Fed.

At 02:58 AM GMT, the Australian dollar against the US dollar fell 0.01% to 0.6791 levels, compared to the opening levels at 0.6793, after the pair achieved its lowest since September 4 at 0.6779, while achieving the highest during trading The session was at 0.6797.

Last Tuesday, the Reserve Bank of Australia unveiled the minutes of its September 3 meeting, at which the Bank of Australia's monetary policy makers decided to hold short-term interest rates at their lowest ever level for the second consecutive meeting at 1.00%. Which was expected by market analysts at the time.

RBA policy makers at the time expressed the upward trend in wage growth that seems to have stalled and the risks to the global outlook are still tilted to the downside, indicating that it will consider further easing of monetary policy if necessary. While affirming that it is reasonable to expect an "extended period" of low interest rates to achieve the goals of employment and inflation.

This came ahead of Thursday's release of Australian labor market data which showed the unemployment rate rose to 5.3% vs. 5.2% in July, worse than expectations for stability at the same rate previously, in conjunction with the reading showed the change in employment index shrank Rise to 34.7K vs. 36.4K in July, beating expectations of 15.2K.

On the other hand, investors are now awaiting the outcome of the FOMC speech by New York Federal Reserve Chairman John Williams, who is scheduled to deliver a speech titled "Anchor Demolition: Monetary Policy and Minimum Interest Rate Rules" at the Bank's conference. Swiss National Bank in Zurich, before we see the speech of the President of the Federal Reserve Bank of Boston and Eric Rosengren about the credit cycle at the event hosted by New York University.

This comes just hours after the September 17-18 FOMC meeting in Washington, during which the Fed's monetary policy makers decided to cut interest rates on federal funds for the second consecutive meeting by 25 basis points to 1.75. 2.00%, which was in line with expectations at the time, with the disclosure of the Committee's expectations on growth rates, inflation and unemployment in addition to the future of interest rates for the next three years.

Technical analysis:

AUDUSD stabilizes below the 0.6800 barrier, and SMA 50 continues to press the price negatively, keeping the bearish scenario valid so far, with its next major target at 0.6670.

Stability below 0.6865 is important for the continuation of the expected decline, as a breach will push the price to start a bullish correction on the intraday basis.

Expected trading range for today is between 0.6730 support and 0.6820 resistance

Expected trend for today: Bearish

EUR Analysis

The single currency fluctuated in a narrow, bullish range during the Asian session to see its fifth session rebound in seven of its lowest since September 3, when it tested its lowest since May 15, 2017 against the US dollar on the eve of economic developments and data. On Friday by Germany, the euro zone's largest economy and amid looking forward to the speech of members of the Federal Open Market Committee.

At 05:36 am GMT the EURUSD rose 0.14% to 1.1057 levels compared to the opening at 1.1041, after the pair reached its highest level during the session at 1.1060, while the lowest level at 1.1040.

Markets are currently looking ahead to the euro zone's largest economy, Germany, to release its PPI reading, which is a preliminary indicator of inflationary pressures that may reflect a 0.1% rise against steady zero levels in July, while the annual reading of the index may show slower growth to 0.6 % Vs. 1.1% in the previous annual reading for July.

On the other hand, investors are now awaiting the outcome of the FOMC speech by New York Federal Reserve Chairman John Williams, who is scheduled to deliver a speech titled "Anchor Demolition: Monetary Policy and Minimum Interest Rate Rules" at the Bank's conference. Swiss National Bank in Zurich, before we see the speech of the President of the Federal Reserve Bank of Boston and Eric Rosengren about the credit cycle at the event hosted by New York University.

This comes just hours after the September 17-18 FOMC meeting in Washington, during which the Fed's monetary policy makers decided to cut interest rates on federal funds for the second consecutive meeting by 25 basis points to 1.75. 2.00%, which was in line with expectations at the time, with the disclosure of the Committee's expectations on growth rates, inflation and unemployment in addition to the future of interest rates for the next three years.

Technical analysis:

The EURUSD pair did not show any strong movement yesterday, continuing to fluctuate at the resistance of the descending channel shown, where SMA 50 meets to add more strength, waiting for the resumption of the descending wave targeting 1.0857 mainly.

Therefore, we hold onto our bearish outlook provided that the price holds steady below 1.1080, as a breach through this level will push the price to test 1.1180 before any new attempt to decline.

Expected trading range for today is between 1.0950 support and 1.1120 resistance

Expected trend for today: Bearish

Gold Analysis

Gold futures fluctuated in a narrow, bullish range during the Asian session to rebound for the third consecutive session from the lowest since August 7 amid the dollar index fell for the eleventh session in fourteen sessions from the highest since May 12, 2017 According to the inverse relationship between them amid the lack of economic data on Friday by the US economy, the largest economy in the world and looking forward to the developments of trade talks following the decisions and directions of monetary policy makers at major global central banks.

Gold futures for December delivery rose 0.62% to trade at $ 1498.28 an ounce compared with the opening at 1492.67 an ounce, knowing that the contracts are still on their fourth consecutive weekly loss with a bounce back From a six-year high, this comes with the US dollar index falling 0.12% to 98.22 compared to the opening at 98.34.

Investors are now awaiting the outcome of the FOMC speech by Federal Reserve Bank of New York President John Williams, who is scheduled to deliver a speech titled "Anchor Demolition: Monetary Policy and Minimum Interest Rate Rules" at the SNB conference in New York. Zurich, before we see Boston Fed President and Eric Rosengren talk about the credit cycle at the NYU event.

This comes just hours after the FOMC meeting held Wednesday (September 17-18) in Washington, during which the Fed's monetary policy makers approved a 25bp cut in federal funds for the second consecutive meeting. Between 1.75% and 2.00%, which was in line with expectations at the time, with the disclosure of the Committee's expectations on growth rates, inflation and unemployment in addition to the future of interest rates for the next three years.

On the other hand, we continued to cut the People's Bank of China (PBoC) new one-year interest rates to 4.2% from 4.25% the previous month, while keeping the interest rate for five years unchanged from last month at 4.85%. Hours after the Bank of Japan kept interest rates negative at 0.10%, before today we see a reduction in its purchases of debt, which boosted the rise in yields of Japanese bonds, especially ten-year bonds are in the preferred range of the Japanese Central Bank of plus or minus 0.2%.

In view of the development of trade talks between Washington and Beijing, we followed yesterday the South China Morning Post to warn US President Donald Trump that Washington is ready to escalate the trade war in case of a trade agreement soon with Beijing. This came after yesterday began a new round of trade talks. The two sides at the level of deputy officials in preparation for the high-level talks expected in Washington at the beginning of next month aimed at resolving trade disputes between the two largest economies in the world.

In the same context, we also followed yesterday US Secretary of Commerce Wilbur Ross expressed that the trade negotiations with Beijing is more complicated than the issue of soybeans, noting that China to buy more US agricultural products may be insufficient to sign a trade agreement with them, and came hours after US Agriculture Secretary Sonny Perdeo said the Chinese delegation will visit US farms next week and that they want to check the quality of US farm produce.

Otherwise, yesterday we followed the OECD cut its global economic growth forecast for this year and next 2020 to 2.9% from 3.2% in its previous forecast and to 3.0% from 3.4% for 2020, with its US economic growth forecast down to 2.4% from 2.8%. The organization, which warned of uncertainty, lowered its forecast for Europe's economic growth to 1.1% from 1.2% to 2.0% from 2.3%, in addition to lowering its forecast for China's economic growth this year to 6.1% from 6.2% and 5.7% from 6.0% in 2020. It increased to 1.0% from 1.4%, while it raised its forecast for Japan to 1.0% from 0.7% for this year and kept its forecast at 0.6% for 2020.

Technical analysis:

Gold is fluctuating around SMA 50, and is floating near the pivotal resistance 1503.00, as we pointed out yesterday, this level represents one of the pivotal levels that we expect to determine the next price point along with the support 1485.00, as a break above this resistance will push the price to resume the main bullish trend that exists His next target is at 1555.00, while a break of support will complete the formation of a head and shoulders pattern that has the potential to initially push the price to areas of 1447.00.

Therefore, we continue to remain neutral until the price confirms the breach of one of the pivotal levels mentioned above.

Expected trading range for today is between 1485.00 support and 1520.00 resistance

Expected trend for today: Neutral

JPY Analysis

The US dollar fell during the Asian session to rebound for the third session from its highest since early August, when it tested the highest since late May against the Japanese yen following the developments and economic data that followed from the Japanese economy and on the eve of the FOMC members John Williams President of the New York Federal Reserve Bank and Eric Rosengren President of the Federal Reserve Bank of Boston.

At 06:29 AM GMT, the USDJPY fell 0.14% to 107.87 levels from the opening levels of 108.02, after the pair reached a session low of 107.80, while hitting a high of 108.09.

This was followed by the release of inflation data with the release of the annual consumer price index, which showed growth slowed to 0.3%, in line with expectations, against 0.5% last July. The annual reading of the same index, excluding fresh food, showed slower growth to 0.5% in line with expectations versus 0.6%, while the annual reading of the same index excluding energy and fresh food showed stable growth at 0.6%, contrary to expectations that slow growth to 0.5%.

This came hours after the Bank of Japan's monetary policy makers decided to keep interest rates negative at 0.10%, which was expected in the markets, with the release of the Japanese monetary policy statement, which was followed by Bank of Japan Governor Haruhiko Kuroda at the press conference. He held in Tokyo that the Bank of Japan still has options for further monetary easing, but said that it is possible that the Bank of Japan will not resort to monetary easing during the next meeting.

On the other hand, investors are now awaiting the outcome of the FOMC speech by New York Federal Reserve Chairman John Williams, who is scheduled to deliver a speech titled "Anchor Demolition: Monetary Policy and Minimum Interest Rate Rules" at the Bank's conference. Swiss National Bank in Zurich, before we see the speech of the President of the Federal Reserve Bank of Boston and Eric Rosengren about the credit cycle at the event hosted by New York University.

This comes just hours after the September 17-18 FOMC meeting in Washington, during which the Fed's monetary policy makers decided to cut interest rates on federal funds for the second consecutive meeting by 25 basis points to 1.75. 2.00%, which was in line with expectations at the time, with the disclosure of the Committee's expectations on growth rates, inflation and unemployment in addition to the future of interest rates for the next three years.

Technical analysis:

USDJPY is now trading sideways and is floating at SMA 50, and may test the pivotal support floor 107.70 before attempting to rally again.

In general, we continue to favor the bullish trend provided stability above the mentioned support, as breaking it will press the price to return to the bearish path again, while the price needs to breach 108.30 to confirm the rush towards our next main target which reaches 109.30.

Expected trading range for today is between 107.00 support and 108.70 resistance.

Expected trend for today: Bullish.

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