FP Markets Expands Its CFD Trading Offering in Commodities, Metals and Indices.

October 19th 2020, Sydney – Recently awarded as the ‘Best Value Global Forex Broker’ for a second consecutive year, the company continues to set the benchmark in CFDs and Forex and is pleased to announce it has added the following products to its offering:

  • Volatility Index (VIX)
  • Natural Gas (XNGUSD)
  • Platinum (XPTUSD)
  • Palladium (XPDUSD)
  • US Dollar Index (USD Index)

Already offering 60+ Forex currency pairs, the recent decision to add to its CFD offering in commodities, metals and indices is great news with the upcoming US election. Managing Director Matt Murphie commented “The US dollar will be heavily scrutinised in the weeks either side of the US election and the additional products will provide further trading opportunities.  The US election is always an exciting time as we historically see higher levels of volatility in the market. Traders anticipate what the election results will be and devise a trading strategy around it”.

The Volatility Index (VIX), and USD Index are welcomed additions for those looking to trade based on the impact of the election. FP Markets have also created a dedicated US Elections Page which features news updates, webinars, articles and analysis.

The addition of platinum, palladium and natural gas provide more options for those who like to deal with metals and commodities during times of political uncertainty.

Established in 2005, FP Markets has consistently provided traders with tighter spreads and faster execution. Through the use of Raw pricing they are able to aggregate prices across a range of top-tier liquidity providers. Forex and CFD traders seeking optimal trading conditions should look no further.

Click Here for our full list of Forex and CFD products.

Silver Price Daily Forecast – Silver Tries To Settle Above The 50 EMA

Silver Video 20.10.20.

Silver Gains Ground On Weaker U.S. Dollar

Silver continues its attempts to settle above the nearest resistance level at the 50 EMA at $24.50 as the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has managed to settle below the 20 EMA at 93.50 and is declining towards the 93 level. If the U.S. Dollar Index settles below the support at 93.00, it will gain additional downside momentum which will be bullish for silver.

Meanwhile, gold is stuck at the 50 EMA level at $1905. Gold failed to develop any momentum in recent trading sessions but managed to stay above the $1900 level. If gold moves above the 50 EMA, it will have a chance to develop upside momentum and get to the test of the next resistance at $1930 which will be bullish for silver and other precious metals.

Gold/silver ratio continues its downside move and is currently declining towards the 77 level. If gold/silver ratio gets below 77, it will move towards the recent lows near 75.50 which will be a favorable scenario for silver.

Technical Analysis

silver october 20 2020

Silver is trying to move above the nearest resistance level at the 50 EMA. Silver has already tested this resistance level several times but failed to gain sufficient upside momentum.

If silver manages to settle above the 50 EMA, it will move towards the highs reached during the previous trading session near $25.00. A move above $25.00 will open the way to the test of October highs at $25.55.

On the support side, the nearest support level for silver is located at $23.90. There are no material levels between $23.90 and the 50 EMA at $24.50 so silver may quickly get to the test of the nearest support level in case the right catalysts emerge.

A move below the support at $23.90 will push silver closer to the next support level at $23.30.

From a big picture point of view, silver needs to settle above the 50 EMA in order to continue its upside move. If silver fails to move above this resistance level, the risks of a sell-off will increase.

For a look at all of today’s economic events, check out our economic calendar.

Dollar Under Pressure but EUR/AUD Stands Out

Indices and American Dollar collapsed yesterday. Tuesday brings us a reversal attempt on stocks but Dollar remains ultra-bearish. We are not surprised with that as we were highlighting this possibility in our video from yesterday. As always, welcome to Trading Sniper, where we have three best trading setups on the market.

First one is the Dollar Index, which is in a downfall after creating the flag and the head and shoulders pattern. Both formations ended with broken supports, which in both cases activates a legitimate sell signal. We do not see much of a hope for buyers but comeback above the neckline could be good for a start. As long as we stay below, the sentiment is negative.

Slide on Dollar Index, usually means rise on EURUSD. It is not different this time. The price came back above two major horizontal resistances and then managed to break the long-term down trendline. That breakout gives us a buy signal and a lot of optimism.

EURUSD may look nice but crème de la crème of today’s video is EURAUD. A long time ago, I spotted a nice sideways trend and was waiting for a breakout ever since, to the upside to be accurate. The breakout happened yesterday and ended 4 months of a boring sideways trend. According to Price Action, that is a strong, long-term buy signal, the one that should come as a reward for patient traders. Lets see how this one will work out.

For a look at all of today’s economic events, check out our economic calendar.

Further Price Pressure as the USDX Is About to Rally

Gold, mining stocks, and the USD Index have not been doing much recently. However, yesterday, this “inactivity” took quite a decisive shape, and unfortunately, things are not looking good for gold.

As you are all aware, gold tends to move conversely to the USD Index. Therefore, it’s useful to focus on the latter for signs that would influence the former. So, what does the current USDX outlook look like?

Well, it looks like the USDX is about to rally. It broke above its medium-term resistance line and verified this breakout. This verification took the form of a decline based on a more recent short-term breakout, which seems to have ended.

From a medium-term point of view, since the market had to correct before moving higher again, it’s no wonder that it had to do the same from a short-term perspective as well.

Based on the chart above, the outlook for the USD Index is bullish.

But, before we move to gold, please pay attention to the shape of the last candlestick. The USDX moved relatively lower, almost touching the declining support line.

Considering the above, one might have expected to see a visible daily gain in gold – maybe with a small correction, but again, with a substantial gain in terms of daily closing prices. So, did we witness something like that?

Not really.

Gold was marginally up, which is a notable bearish indication. The bearish confirmation comes from the fact that gold tried and failed to break above the declining resistance line.

Above the resistance line, gold took only a small comeback from the USD Index that made gold invalidate its intraday breakout. It is a clear sign of weakness.

And you know what precious metals sector sign of weakness is even more visible? It’s yesterday’s action in gold and silver mining stocks .

Namely, miners have declined adamantly– much more visibly than gold. This type of underperformance is what precedes the decline. Or, more precisely, it is often the very initial part of a more significant decline.

That is a perfect cherry on the bearish analytical cake that we’ve “baked” in our previous analyses. Over a week ago , we wrote that the situation was reminiscent of the earlier cases, marked with blue ellipses. Namely, the GDX ETF moved only a tad higher, which was the final top for at least some time. We argued that the strong daily rally that started with a bullish price gap was not so bullish after all. Indeed, over a week later, once again, miners are visibly lower.

Of course, based i.a. in the USDX situation, most probably, this is not the end of the miners’ decline, but rather, it is just the beginning. The situation relative to the 50-day moving average (marked with blue) confirms it. After all, back in March, miners moved slightly above their 50-day moving average only to plunge shortly after that, and the current situation is the only similar case to the above. There were no other cases when the miners broke below this MA and then moved back up slightly above it, declining once again afterward.

And due to the above, if the situation wasn’t bearish enough, the Stochastic indicator based on the GDX ETF has just flashed a clear sell signal.

All in all, currently, the outlook for the precious metals market remains bearish.

As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.

For a look at all of today’s economic events, check out our economic calendar.

Przemyslaw Radomski, CFA
Editor-in-chief, Gold & Silver Fund Manager
Sunshine Profits: Analysis. Care. Profits.

* * * * *

All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits’ associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski’s, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

AUD/USD Daily Forecast – Australian Dollar Remains Under Pressure

AUD/USD Video 20.10.20.

U.S. Dollar Continues To Gain Ground Against Australian Dollar

AUD/USD remains under pressure as the U.S. dollar is gaining some ground against a broad basket of currencies.

The U.S. Dollar Index is currently trying to get back above the 20 EMA at 93.55. If this attempt is successful, the U.S. Dollar Index will gain additional upside momentum and head towards the next resistance level at the 50 EMA at 93.75. This scenario will be bearish for AUD/USD.

Today, AUD/USD traders will focus on the economic data from U.S. Building Permits are projected to increase by 1.8% month-over-month in September while Housing Starts are expected to grow by 2.8%.

In addition to economic news, the market will pay attention to the U.S. coronavirus aid package negotiations. At this point, it looks like Republicans and Democrats will not be able to reach any deal before the November election. However, a last-minute deal is also possible.

Technical Analysis

aud usd october 20 2020

AUD/USD has managed to settle below 0.7075 and gained additional downside momentum. However, it received support at 0.7030 and is currently trading in the range between the support at 0.7030 and the resistance at 0.7075.

If AUD/USD manages to settle below the support level at 0.7030, it will continue its downside move and head towards September lows at 0.7005. A move below the support at 0.7005 will open the way to the test of the next support level at 0.6975.

On the upside, the nearest resistance level for AUD/USD is located at the previous support level at 0.7075. AUD/USD needs to settle above this level to have a chance to develop upside momentum.

If AUD/USD moves above the resistance at 0.7075, it will gain additional upside momentum and head towards the next resistance at 0.7100.

A successful test of the resistance at 0.7100 will open the way to the next resistance at 0.7130. The 20 EMA is located in the nearby, so this resistance level is set to be a significant obstacle on the way up for AUD/USD.

If AUD/USD manages to settle above the resistance at 0.7130, it will move towards the next resistance level at 0.7150.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Daily Forecast – Euro Tries To Continue Its Upside Move

EUR/USD Video 20.10.20.

U.S. Dollar Remains Under Pressure Against Euro

EUR/USD has managed to settle above the resistance at 1.1750 and is trying to get above the next resistance at 1.1780 while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index has managed to settle below the 20 EMA at 93.55 on hopes for a new U.S. stimulus package. While the stock market has abandoned such hopes and finished yesterday’s trading session deep in the red zone, currency traders are more optimistic so the U.S. dollar is not able to develop upside momentum.

The nearest support level for the U.S. Dollar Index has emerged near 93.25. In case the U.S. Dollar Index manages to settle below this level, EUR/USD will have good chances to gain additional upside momentum and settle above 1.1800.

Just like the British pound, EUR/USD will remain sensitive to Brexit news. At this point, EU and Britain blame each other for the lack of progress in negotiations. The market believes that both sides are bluffing and that they will ultimately reach a compromise deal.

If this does not happen, EUR/USD may find itself under material pressure as a no-deal Brexit will present an additional problem for the European economy which is currently suffering from the second wave of the virus.

Technical Analysis

eur usd october 20 2020

EUR/USD continues its attempts to settle above the nearest resistance level at 1.1780. In case EUR/USD manages to get above this level, it will gain additional upside momentum and head towards the next resistance at October highs at 1.1830.

A move above 1.1830 will signal that EUR/USD is ready to move higher. In this case, EUR/USD will have to deal with the resistance at 1.1870 on the way to the major resistance level at 1.1910.

On the support side, the previous resistance at 1.1750 will likely serve as the first support level for EUR/USD. If EUR/USD settles below this level, it will decline towards the next support at 1.1720. A move below the support at 1.1720 will open the way to the test of the next support level at 1.1695.

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD Daily Forecast – British Pound Remains Sensitive To Brexit News

GBP/USD Video 20.10.20.

British Pound Is Flat Against U.S. Dollar After Yesterday’s Volatile Trading Session

GBP/USD failed to settle above the resistance at 1.3000 and returned to the 50 EMA level at 1.2945 as traders reacted to news on Brexit negotiations.

GBP/USD got a boost after British minister Michael Gove stated that European Union’s Michel Barnier agreed to intensify negotiations. Later, Britain’s negotiator David Frost signaled that the country would not continue talks until EU offers consessions. This statement put material pressure on GBP/USD and pushed it back below 1.3000.

Most likely, GBP/USD will remain highly sensitive to Brexit news in the upcoming trading sessions.

In addition to Brexit talks, GBP/USD traders will focus on UK inflation data which will be published on Wednesday. Inflation Rate is expected to increase by 0.5% year-over-year in September while Core Inflation Rate is projected to grow by 1.3%.

Currently, Britain is fighting against the second wave of coronavirus, and it is interesting to see whether problems on the virus front put pressure on prices. Previously, Bank of England stated that it did not rule out an adoption of negative interest rate policy.

Just like other major central banks, Bank of England is trying to bring inflation to the 2% mark. If the inflation reports are weaker than expected, the odds of negative rates will increase.

Technical Analysis

gbp usd october 20 2020

GBP/USD continues its attempts to settle above the 50 EMA at 1.2945. In case GBP/USD manages to stay above the 50 EMA, it will have a chance to develop additional upside momentum and get to the test of the highs of the previous trading session near 1.3030.

I’d note that GBP/USD has mostly ignored the resistance at 1.3000 in recent sessions but there’s a chance that it may still face some resistance at this level on the way up.

In case GBP/USD moves above the resistance at 1.3030, it will head towards October highs near 1.3070.

On the support side, the nearest support level for GBP/USD is located at 1.2890. If GBP/USD gets below this level, it will gain downside momentum and decline towards the next support at 1.2815.

For a look at all of today’s economic events, check out our economic calendar.

A Quiet Economic Calendar Leaves U.S Politics, COVID-19, and Brexit in Focus

Earlier in the Day:

It’s was a relatively quiet start to the day on the economic calendar this morning. The Kiwi Dollar and Aussie Dollar were in action early on, with the PBoC also in the spotlight.

Away from the economic calendar, the markets also responded to the lack of progress on Capitol Hill.

For the Kiwi Dollar

In the 3rd quarter, the NZIER Business Confidence

According to the NZIER Quarterly Survey of Business Opinion,

  • A net 40% of firms expect business conditions to deteriorate in the 3rd quarter, compared with 63% in the previous quarter.
  • The building sector was the most confident, with a net 7% of firms expecting an improvement in the economy near-term.
  • Other sectors were more cautious. While manufacturers were less pessimistic, the service sector was the most pessimistic. A net 49% of services firms expect a worsening in general economic conditions in the coming months.
  • Uncertainty continues to plague the services sector after the adverse effects of lockdown and border restrictions.

The Kiwi Dollar moved from $0.66047 to $0.66027 upon release of the figures. At the time of writing, the Kiwi Dollar was down by 0.30% to $0.6586.

For the Aussie Dollar

The RBA monetary policy meeting minutes drew interest early this morning.

Salient points from the minutes included:

  • Members observed that the global economy was recovering but that most economies were still some way off pre-pandemic output levels.
  • The continuation of the recovery was dependent upon the containment of the virus.
  • China’s economic recovery was the most advanced, while globally, inflation remained very low and below central bank targets.

Domestically,

  • While Australia saw its largest economic contraction since the 1930s, members noted that the decline in output had been smaller than expected.
  • Labour market conditions had improved, with the unemployment rate likely to peak at a lower rate than previously expected.
  • The RBA expects both unemployment and underemployment to remain high for an extended period of time.
  • Members considered that the economy would need fiscal and monetary support for some time.
  • Members also noted that the effects of monetary policy easing had been impaired as a result of restrictions on activity in parts of the economy.
  • As the economy opens up, however, members considered it reasonable to expect further monetary policy easing to gain more traction.
  • The Board also considered the nature of the forward guidance regarding the cash rate. Given the higher level of uncertainty about inflation dynamics, the Board agreed to place more weight on actual, not forecast, inflation for its decision-making.
  • Members also indicated that they would like to see more than just progress towards full employment before considering an increase in the cash rate.

The Aussie Dollar moved from $0.70559 to $0.70582 upon release of the minutes. At the time of writing, the Aussie Dollar was down by 0.44% to $0.7043.

Out of China

The markets are expecting that the PBoC will leave Loan Prime Rates unchanged this morning. Currently, the 1-year LPR sits at 3.85%, with the 5-year at 4.65%.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.10% ¥105.54 against the U.S Dollar.

The Day Ahead:

For the EUR

It’s a quiet day ahead on the economic calendar. Wholesale inflation figures for September are due out of Germany.

We don’t expect too much influence on the EUR, however, with COVID-19 numbers and any Brexit chatter in focus.

At the time of writing, the EUR was up by 0.02% to $1.1771.

For the Pound

It’s a particularly quiet day ahead on the economic calendar. There are no material stats due out to provide the Pound with direction.

The lack of stats will leave any further chatter on Brexit and updates on COVID-19 in focus.

While Downing Street announced an end to negotiations, the markets are expecting talks to resume. Boris Johnson left the door open for further talks, though it remains to be seen whether the EU will compromise…

At the time of writing, the Pound was flat at $1.2948.

Across the Pond

It’s a relatively quiet day ahead for the U.S Dollar.

September building permits and housing starts are due out later this afternoon.

Barring particularly dire numbers, we would expect the markets to brush aside the numbers.

The focus will be on the U.S Presidential Election polls, the Senate polls, and chatter from Capitol Hill.

Expect updates on COVID-19 to also influence on the day.

At the time of writing, the Dollar Spot Index was down by 0.02% to 93.404.

For the Loonie

It’s a particularly quiet day ahead. There are no key stats due out of Canada to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of COVID-19 and U.S politics on the day. A continued rise in new COVID-19 cases will continue to test support for the Loonie.

At the time of writing, the Loonie was up by 0.02% to C$1.3190 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

USD/CAD Daily Forecast – U.S. Dollar Is Under Pressure At The Start Of The Week

USD/CAD Video 19.10.20.

Canadian Dollar Gains Ground On Strong Oil And U.S. Stimulus Hopes

USD/CAD is under pressure as the U.S. dollar is losing ground against a broad basket of currencies while WTI oil is trying to settle above the $41 level despite worries about the second wave of coronavirus in Europe.

The U.S. Dollar Index has managed to settle below 93.50 and tries to gain additional downside momentum on hopes for a new coronavirus aid package in the U.S.

According to recent reports, House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin will resume negotiations today. Nancy Pelosi has previously set a deadline of October 20 for a vote in case Republicans and Democrats want to pass the new aid bill before the election.

Today, Canada reported that Wholesale Sales increased by 0.3% month-over-month in August. The report was fully in line with the analyst consensus.

This week, USD/CAD traders will have a chance to evaluate the latest inflation data from Canada which will be published on Wednesday. Inflation Rate is expected to grow by 0.4% year-over-year in September while Core Inflation Rate is projected to increase by 0.7%.

On Thursday, the Bank of Canada will announce its Interest Rate Decision and present its Monetary Policy Report. The rate is expected to stay unchanged at 0.25% so traders will focus on the Bank’s commentary about its plans to support the economy.

Technical Analysis

usd cad october 19 2020

USD to CAD managed to settle below the support at 1.3200 and developed material downside momentum. The nearest support level for USD to CAD is located at 1.3135.

In case USD to CAD moves below this level, it will head towards the next support level at October lows at 1.3100. A move below 1.3100 will open the way to the test of the support at 1.3050.

On the upside, the previous support at 1.3200 will likely serve as the first resistance level for USD to CAD. The 20 EMA is located in the nearby so this resistance level is set to be strong.

If USD to CAD settles above the resistance at 1.3200, it will gain upside momentum and move towards the next resistance at the 50 EMA at 1.3240.

For a look at all of today’s economic events, check out our economic calendar.

Silver Price Daily Forecast – Silver Starts The Week On A Strong Note

Silver Video 19.10.20.

Silver Attempts To Gain More Momentum Above The 50 EMA

Silver has managed to get above the resistance at the 50 EMA at $24.55 and is trying to gain additional upside momentum as the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index declined below 93.50 and is heading towards the nearest support level at 93.00 on hopes for a new coronavirus aid package deal. If the U.S. Dollar Index gets to the test of the 93 level, silver will get more support. Weaker dollar is bullish for silver as it makes it cheaper for buyers who have other currencies.

Meanwhile, gold is trying to settle above its 50 EMA at $1905. At this point, gold failed to develop material upside momentum but maintains solid chances to continue its upside move. If gold gets to the test of the next resistance at $1930, silver and other precious metals will get additional support.

Gold/silver ratio declined below the support at the 20 EMA at 77.95 which is bullish for silver. The next support level for gold/silver ratio is located at the recent lows near 75.50. A move towards this level will be a bullish development for silver.

Technical Analysis

silver october 19 2020

Silver is currently trying to get more momentum above the support at the 50 EMA at $24.55. If this attempt is successful, silver will head towards the next resistance level at the recent highs at $25.55.

Along the way, silver may face some resistance near the highs of today’s trading session at $25.00. If silver moves above the resistance at $25.55, it will quickly get to the test of the next resistance level at $25.85.

On the support side, the nearest support level for silver is located at $23.90. A move below this level will open the way to the test of the next support at $23.30.

From a big picture point of view, silver managed to get sufficient support near $24.00 and continues its upside move. If the U.S. dollar remains weak, silver will have good chances to get above the recent highs at $25.55.

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD Daily Forecast – Test Of Resistance At 0.7100

AUD/USD Video 19.10.20.

Australian Dollar Gains Ground Against U.S. Dollar At The Beginning Of The Week

AUD/USD is currently trying to settle above the nearest resistance level at 0.7100 while the U.S. dollar is mostly flat against a broad basket of currencies.

According to a recent Reuters poll, a majority of economists expect that Australia’s central bank will cut its interest rate from 0.25% to 0.1% in order to support the economy. However, it remains to be seen whether lower interest rates can put additional pressure on the Australian dollar in the current market environment.

Today, China reported that its GDP increased by 4.9% year-over-year in the third quarter compared to analysts’ estimate of 5.2%. At the same time, Retail Sales increased by 3.3% while the analyst consensus called for Growth of 1.8%. Industrial Production was also strong, growing by 6.9%.

Despite tensions which have emerged in recent years, the well-being of China’s economy is very important for the Australian economy. While China’s GDP report was somewhat disappointing, the strength of Retail Sales and Industrial Production provided some support to the Australian dollar.

In the U.S., traders will continue to follow the coronavirus aid package story. With just a few weeks left before the November election, Republicans and Democrats continue their negotiations.

The market believes that U.S. lawmakers will ultimately manage to reach consensus on the new deal but chances of any deal being negotiated before the election are slim.

Technical Analysis

aud usd october 19 2020

AUD/USD gained some upside momentum and is testing the resistance at 0.7100. If this test is successful, AUD/USD will move towards the next resistance level at 0.7130.

A move above this resistance will open the way to the test of the resistance at the 20 EMA at 0.7150. In case AUD/USD manages to settle above the 20 EMA, it will gain upside momentum and head towards the resistance at the 50 EMA at 0.7165.

On the support side, the nearest support level for AUD/USD is located at 0.7075. If AUD/USD declines below this support level, it will gain downside momentum and move towards the next support at 0.7030.

A move below the support at 0.7030 will open the way to the test of September lows just above 0.7000.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Daily Forecast – Virus Worries Put Pressure On Euro

EUR/USD Video 19.10.20.

U.S. Dollar Gains Ground Against Euro At The Start Of The Week

EUR/USD is losing some ground at the start of the week while the U.S. dollar is little changed against a broad basket of currencies.

On Friday, EU reported inflation data that was fully in line with the analyst consensus. Inflation Rate was -0.3% year-over-year in September while Core Inflation Rate was 0.2%. EU inflation remains weak which is not surprising given the negative impact of the pandemic.

Today, EU will provide Construction Output data for August. Analysts forecast that Construction Output will decline by 4.4%.

In addition to economic news, EUR/USD traders will pay attention to the latest developments on the coronavirus front in Europe. On Sunday, Italy reported 11,705 new cases which was a daily record.

Italian Prime Minister Guiseppe Conte stated that the situation was critical and provided mayors of Italian cities with the power to shut down public squares from 9 p.m.

At this point, it looks like traders are more worried about coronavirus than about Brexit. GBP/USD is gaining ground despite the lack of progress in Brexit negotiations, while EUR/USD is under some pressure.

Technical Analysis

eur usd october 19 2020

EUR/USD continues its attempts to settle below the nearest support level at 1.1695. EUR/USD has already tested this level several times but the support at 1.1695 remained strong.

In case EUR/USD declines below this support level, it will gain downside momentum and move towards the next support level at 1.1630. RSI is in the moderate territory so there is plenty of room to develop momentum in case the right catalysts emerge.

If EUR/USD manages to settle below the support at 1.1630, it will head towards the next support level at 1.1580.

On the upside, the nearest resistance level for EUR/USD has emerged at 1.1720. In case EUR/USD settles above this level, it will gain upside momentum and head towards the major resistance level at 1.1750.

A move above the resistance at 1.1750 will signal that EUR/USD is ready to get back to the upside mode. In this case, EUR/USD will move towards the next resistance at 1.1780.

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD Daily Forecast – Test Of Resistance At 1.2945

GBP/USD Video 19.10.20.

British Pound Starts The Week On A Strong Note

GBP/USD is testing the nearest resistance level at the 50 EMA at 1.2945 while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index remains stuck in a tight range between the support at the 20 EMA at 93.60 and the resistance at the 50 EMA at 93.75. Currently, the U.S. Dollar Index is located closer to the high end of this range.

If the U.S. Dollar Index manages to settle above the 50 EMA at 93.75, it will gain upside momentum and head towards the 94 level which will be bearish for GBP/USD. A move below the 20 EMA will push the U.S. Dollar Index below 93.50 which will be bullish for GBP/USD.

There are no important economic reports scheduled to be released in the UK and U.S. today. In absence of economic news, traders will focus on Brexit negotiations and the fate of U.S. coronavirus aid package.

While UK and EU have intensified their preparations for a no-deal Brexit, negotiations continue. The currency market does not believe in a Brexit without a deal, and EUR/USD is flat at the start of the week while GBP/USD is gaining some ground.

However, the situation may change quickly, and traders should be prepared for a volatile week.

Technical Analysis

gbp usd october 19 2020

GBP/USD is currently trying to settle above the nearest resistance level at the 50 EMA at 1.2945. If this attempt is successful, GBP/USD will gain additional upside momentum and head towards the significant resistance level at 1.3000.

A move above the resistance at 1.3000 will open the way to the test of the next resistance near the recent highs at 1.3070. In case GBP/USD moves above the resistance at 1.3070, it will gain upside momentum and head towards the resistance at 1.3110.

On the support side, GBP/USD will likely get some support near 1.2890.  A move below this support level will open the way to the test of the next support level at 1.2815. If GBP/USD settles below 1.2815, it will continue its downside move and decline towards the support at 1.2780.

For a look at all of today’s economic events, check out our economic calendar.

Riskier Assets Find Support, with China Stats, COVID-19, and U.S Politics in Focus

Earlier in the Day:

It’s was a particularly busy start to the day on the economic calendar this morning. The Japanese Yen was in action early on, with economic data from China also in focus. Away from the economic calendar, U.S politics and COVID-19 were also in focus.

Positive chatter from Capitol Hill and hopes of a COVID-19 vaccine supported riskier assets early on.

Nancy Pelosi raised hope of a pre-Election Stimulus Bill over the weekend, while also setting a deadline for talks.

At the end of last week, U.S Pharma Phizer talked of having a COVID-19 vaccine ready before the end of the year.

For the Japanese Yen

Japan’s trade surplus widened from ¥248.6bn to ¥675.0bn in September. Economists had forecast a widening to ¥989.8bn.

According to figures released by the  Ministry of Finance,

  • Exports fell by 4.9% when compared with September 2019.
    • Exports to China jumped by 14.0%, while down by 2.0% to Asia.
    • Exports to the U.S rose by just 0.7%, while exports to Western Europe fell by 6.4%.
  • Imports tumbled by 17.2% when compared with September 2019.
    • Imports from China slid by 11.9% while falling by 12.6% from Asia.
    • From the U.S, imports fell by 9.9%, with imports from Western Europe sliding by 14.4%.

The Japanese Yen moved from ¥105.426 to ¥105.443 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.01% ¥105.41 against the U.S Dollar.

Out of China

3rd quarter GDP, fixed asset investment, industrial production, retail sales, and unemployment figures were in focus this morning.

In the 3rd quarter, China’s economy grew by 2.7%, quarter-on-quarter, following 11.5% growth in the 2nd quarter. Year-on-year, the economy expanded by 4.9%, following 3.2% growth in the 2nd quarter. Economists had forecasted growth of 3.2% and 5.2% respectively.

Industrial production increased by 6.9%, year-on-year, in September, following a 5.6% rise in August. Economists had forecast a 5.8% increase.

Retail sales increased by 3.3%, following a 0.5% increase in August. Economists had forecast a 1.8% rise.

The unemployment rate declined from 5.6% to 5.4% in September, which was better than a forecasted decline to 5.5%.

The Aussie Dollar moved from $0.71031 to $0.70961 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.27% to $0.7100.

Elsewhere

At the time of writing, the Kiwi Dollar was up by 0.30% to $0.6622.

The Day Ahead:

For the EUR

It’s a particularly quiet day ahead on the economic calendar. There are no material stats due out of the Eurozone to provide the EUR with direction.

A lack of stats leaves the EUR in the hands of COVID-19 and any further chatter on Brexit.

With lockdown measures being introduced in Europe, any further steps to contain the virus will test EUR support.

At the time of writing, the EUR was down by 0.05% to $1.1712.

For the Pound

It’s also a quiet day ahead on the economic calendar. There are no material stats due out to provide the Pound with direction.

A lack of stats will leave the markets to react to any Brexit chatter and COVID-19 news.

Further COVID-19 restrictions are expected on Monday, which would be Pound negative.

At the time of writing, the Pound was up by 0.10% to $1.2928.

Across the Pond

It’s a quiet day ahead for the U.S Dollar.

With no material stats due out of the U.S, the focus will be on Capitol Hill and the U.S elections.

The markets are looking for a clean sweep, which will bring the Senate elections into focus. As Biden leads Trump in the Presidential Election polls, the Democrats will need to stay ahead in the senate polls to support riskier assets.

On Capitol Hill, any hint of progress towards a COVID-19 stimulus Bill would also support riskier assets on the day.

At the time of writing, the Dollar Spot Index was up by 0.02% to 93.697.

For the Loonie

It’s a relatively quiet day ahead. Key stats due out of Canada include August wholesale sales figures.

We don’t expect too much influence on the Loonie, however. COVID-19 news updates and market sentiment towards the economic outlook and demand for crude will remain the key drivers.

At the time of writing, the Loonie was up by 0.09% to C$1.3177 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

U.S. Dollar Index (DX) Futures Technical Analysis – 94.110 Potential Trigger Point for Upside Breakout

The U.S. Dollar Index edged lower against a basket of major currencies on Friday, giving back some of the week’s gains built on increased caution over a global surge in coronavirus cases and fading prospects for a U.S. stimulus package before the November 3 election.

The greenback clawed back some of its earlier losses after better-than-expected U.S. retail sales data helped dampen some of the concerns about the health of the U.S. consumer. U.S. retail sales increased more than expected in September.

On Friday, December U.S. Dollar Index futures settled at 93.679, down 0.185 or -0.20%.

Also in the United States, relief plans remained bogged down in a three-way negotiation between the White House, Senate Republicans and House Democrats. The news suggests Senate Republicans may already be distancing themselves from Trump as the latest polls shows the President trailing Joe Biden in his attempt to get re-elected.

Daily December U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. The main trend will change to down on a move through 93.000. A move through 94.800 will reaffirm the uptrend.

The minor trend is down. This is controlling the momentum. A trade through 93.975 will change the minor trend to up. A move through 94.090 will reaffirm the uptrend.

The first minor range is 91.750 to 94.800. Its 50% level at 93.275 is support.

The second minor range is 94.800 to 93.000. Its retracement zone at 93.900 to 94.110 is the first upside target. Overtaking 94.110 could trigger the start of a surge to the upside.

The first major upside target is the short-term 50% level at 94.765. This forms a resistance cluster with the 94.800 main top.

Short-Term Outlook

Based on Friday’s price action, the early direction on Monday is likely to be determined by trader reaction to the minor 50% level at 93.900.

Bullish Scenario

Overtaking 93.900 is likely to trigger a quick rally into a series of levels at 93.975, 94.090 and 94.110. Look for a possible acceleration to the upside over 94.110.

Bearish Scenario

A sustained move under 93.900 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into 93.275.

For a look at all of today’s economic events, check out our economic calendar.

The Week Ahead – U.S Politics, COVID-19, Brexit, and Private Sector PMIs in Focus

On the Macro

It’s a busy week ahead on the economic calendar, with 57 stats in focus in the week ending 23rd October. In the week prior, 56 stats had been in focus.

For the Dollar:

It’s a relatively quiet week ahead on the economic data front.

On Tuesday, Wednesday, and Thursday, housing sector figures for September are in focus.

With mortgage rates hovering close to historic lows, the numbers are unlikely to have a material impact on the Dollar.

On Thursday, however, U.S jobless claims figures will influence ahead of private sector PMIs on Friday.

October’s prelim services, manufacturing, and composite PMIs are due out at the end of the week.

Expect the Services PMI to be the key driver. The markets will be looking for a pickup in service sector activity…

Away from the economic calendar, we are just over 2-weeks away from the U.S Presidential Election. Wednesday’s final live televised Presidential debate will garner plenty of attention as will chatter from Capitol Hill. We can also expect increased interest in the Senate Election polls.

The Dollar Spot Index ended the week up by 0.67% to 93.682.

For the EUR:

It’s also a relatively busy week ahead on the economic data front.

On Tuesday, German wholesale inflation figures are due out ahead of a busier 2nd half of the week.

On Thursday, Germany is back in focus, with November consumer climate figures due out.

Prelim October private sector PMIs from France, Germany, and the Eurozone will be the key drivers on Friday, however.

We can expect plenty of sensitivity to the numbers. A new spike in new COVID-19 cases in France and other parts of the EU may have impacted activity at the start of the quarter.

Away from the economic calendar, Brexit and COVID-19 will need monitoring throughout the week.

The EUR/USD ended the week down by 0.91% to $1.1718.

For the Pound:

It’s a busy week ahead on the economic calendar.

The markets will have to wait until Wednesday, however, for the first set of numbers.

Inflation figures for September are due out ahead of CBI industrial trend orders on Thursday.

We would expect the Pound to be sensitive to the inflation figures ahead of a busy end to the week.

On Friday, retail sales figures for September and prelim October private sector PMIs will provide direction.

With the BoE open to negative rates, dire numbers will test support for the Pound.

Of greater influence in the week, however, will be Brexit and COVID-19 news.

The GBP/USD ended the week down by 0.93% to $1.2915.

For the Loonie:

It’s a relatively busy week ahead on the economic calendar.

At the start of the week, wholesale sales figures for August are in focus on Monday.

We don’t expect too much influence from the numbers, however.

On Wednesday, September inflation and August retail sales figures will provide direction.

From elsewhere, expect GDP numbers from China and prelim private sector PMIs from the Eurozone and the U.S to also influence.

Away from the economic calendar, risk appetite will likely be dictated by COVID-19 and the U.S Presidential Election polls. There’s also the final presidential debate to consider on Wednesday.

The Loonie ended the week down by 0.52% to C$1.3189 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a particularly quiet week ahead on the economic calendar.

There are no material stats due out of Australia to provide the Aussie with direction.

The lack of stats will leave the Aussie Dollar firmly in the hands of market risk sentiment in the week.

Expect China’s GDP numbers and prelim PMIs from the Eurozone and the U.S to influence

On the monetary policy front, the RBA meeting minutes at the start of the week will garner interest. There has been the talk of an RBA move next month, the minutes could reveal what is on the cards…

The Aussie Dollar ended the week down by 2.20% to $0.7081.

For the Kiwi Dollar:

It’s also a relatively busy week ahead on the economic calendar.

In the 1st half of the week, 3rd quarter business confidence figures are due out. A pickup in confidence would provide support to the Kiwi ahead of a busy Friday.

Trade data for May and 3rd quarter inflation figures will influence at the end of the week.

While the stats will provide direction, however, economic data from China and COVID-19 will likely be the key drivers.

The Kiwi Dollar ended the week down by 0.96% to $0.6602.

For the Japanese Yen:

It is a relatively quiet week on the economic calendar.

Trade data for September will draw interest at the start of the week ahead of inflation at the end of the week.

We don’t expect the numbers to have too much influence on the Yen, however.

The key driver for the Japanese Yen, however, will be COVID-19 news and U.S politics.

The Japanese Yen ended the week up by 0.21% to ¥105.40 against the U.S Dollar.

Out of China

It’s a busy week ahead on the economic data front.

3rd quarter GDP numbers due out on Monday will be the key driver for the Yuan and market risk sentiment.

September’s industrial production, retail sales, and unemployment figures will also influence.

Barring particularly dire numbers, the fixed asset investment numbers should have a muted impact.

On the monetary policy front, the PBoC is in action on Tuesday. The markets are expecting the PBoC to leave loan prime rates unchanged. Any unexpected rate cut could spook the markets…

The Chinese Yuan ended the week down by 0.04% to CNY6.6976 against the U.S Dollar.

Geo-Politics

UK Politics:

On Friday, Boris Johnson announced that Brexit negotiations were over. Downing Street added the EU chief negotiator Barnier does not need to return to London in the week ahead.

Following the EU’s attempts to leave the ball in Britain’s court, with Fisheries a key issue, it now rests with the EU to compromise. Johnson has been clear that it would not leave fishing access unchanged, despite Macron’s attempts to strong-arm Britain into yielding.

For French fishermen, it would ultimately mean no access to UK fisheries should Britain leave without a deal…

Also at the start of the week, the British Prime Minister is due to announce more containment measures. With the number of new COVID-19 cases continuing to rise, further restrictions would be Pound negative.

U.S Politics

After last week’s individual town hall sessions, the final live televised debate will take place on Wednesday.

It will be a chance for Trump to narrow the gap ahead of the 3rd November Election.

If past performance is any indicator of future performance, however, it could just give Biden a greater edge.

As the markets begin to write-off a Trump victory, the focus will likely shift to the Senate Elections.

A blue wave is expected that would support further stimulus in the New Year.

The Weekly Wrap – Brexit, COVID-19, and U.S Politics Drive the Majors

The Stats

It was a busier week on the economic calendar, in the week ending 16th October.

A total of 56 stats were monitored, following 43 stats from the week prior.

Of the 56 stats, 24 came in ahead of forecasts, with 21 economic indicators came up short of forecasts. 11 stats were in line with forecasts in the week.

Looking at the numbers, 20 of the stats also reflected an upward trend from previous figures. Of the remaining 36 stats, 27 reflected a deterioration from previous.

For the Greenback, it was back into the green after 2 consecutive weeks in the red. The Dollar Spot Index rose by 0.67% to 93.682. In the week ending 9th October, the Dollar Spot Index had fallen by 0.87% to 93.057.

Market risk appetite waned in the week. There were a number of factors driving demand for the Dollar. A lack of progress towards a U.S stimulus bill and a spike in COVID-19 cases were front and center in the week.

Disappointing economic data and Brexit woes also supported the demand for the safety of the Dollar.

Out of the U.S

It was a relatively busy week on the economic data front.

Inflation figures drew interest early in the week. In the 2nd half of the week, however, jobless claims and retail sales figures were the key drivers. Prelim October consumer sentiment figures were also in focus late on Friday.

In the week ending 9th October, initial jobless claims stood at 898k, which was up from 845k from the week prior. The numbers reinforced the view that the labor market recovery had stalled.

A combination of dire labor market conditions, rising new COVID-19 cases, and a lack of further stimulus was a bad combination.

At the end of the week, retail sales impressed, however. In September, retail sales rose by 1.9%, with core retail sales rising by 1.5%. Economists had forecasted increases of 0.5% and 0.7% respectively.

Aligned with the retail sales figures was a further pickup in consumer sentiment. The Michigan Consumer Sentiment Index rose from 80.4 to 81.2 in October, according to prelim figures. The Expectations Index increased from 75.6 to 78.8.

The only negative on the day was an unexpected 0.6% fall in industrial production.

In the equity markets, the NASDAQ rose by 0.79%, with the Dow and S&P500 gaining 0.07% and 0.19% respectively.

Out of the UK

It was a relatively busy week on the economic data front.

Key stats included August unemployment rate and employment change and September claimant count figures.

While claimant counts came in lower than expected, employment fell by more than expected over the 3-months to August.

A 153k fall in employment led to an increase in the unemployment rate from 4.1% to 4.5%.

While the stats provided direction, it was ultimately Brexit and COVID-19 that sank the Pound in the week.

A continued rise in new COVID-19 cases and a new round of containment measures were Pound negative.

More significantly, however, was a lack of progress towards a Brexit agreement, with the EU pushing for more talks next week.

On Friday, Boris Johnson announced that it was time to prepare for a no-trade deal Brexit unless the EU changed its stance. Downing Street also stated that there was no point in EU negotiator Michel Barnier returning to London in the week ahead.

In the week, the Pound fell by 0.93% to $1.2915. In the week prior, the Pound had risen by 0.78% to $1.3036.

The FTSE100 ended the week down by 1.61%, partially reversing a 1.94% gain from the previous week.

Out of the Eurozone

It was a relatively busy week on the economic data front.

Early in the week, key stats included ZEW Economic Sentiment figures for the Eurozone and Germany.

The indicators flashed red for October. Germany’s Economic Sentiment Indicator fell from 77.4 to 56.1, with the Eurozone’s falling from 73.9 to 52.3. A lack of progress on Brexit and jitters over the U.S Presidential Election weighed in October.

Mid-week, industrial production figures for the Eurozone came up short of expectations, rising by just 0.7%. In July, production had jumped by 5.0%.

In the 2nd half of the week, Eurozone trade data and finalized inflation figures for September were in focus.

Inflation figures reaffirmed market concern over deflationary pressures. Trade data also failed to impress, with the Eurozone’s trade surplus narrowing from €27.9bn to €14.7bn in August.

While the stats provided direction, a marked increase in new COVID-19 cases weighed on the EUR in the week. France and other member states were forced to reintroduce containment measures amidst the 2nd wave.

For the week, the EUR fell by 0.91% to $1.1718. In the week prior, the EUR had risen by 0.94% to $1.1826.

For the European major indexes, it was a bearish week. The CAC40 and EuroStoxx600 fell by 0.22% and by 0.77% respectively, with the DAX30 declining by 1.09%.

For the Loonie

It was a quiet week on the economic data front.

Key stats included August’s foreign security purchases and manufacturing sales figures.

Neither set of numbers had an impact, however, as the fresh spike in new COVID-19 cases weighed on market risk sentiment.

The threat of a reintroduction of lockdown measures pegged back crude oil prices in the week.

In the week ending 16th October, the Loonie fell by 0.52% to end the week at C$1.3189. In the week prior, the Loonie had risen by 0.87%.

Elsewhere

It was a bearish week for the Aussie Dollar and the Kiwi Dollar.

In the week ending 16th October, the Aussie Dollar slid by 2.20% to $0.7081. The Kiwi Dollar ended the week down by a more modest 0.96% to $0.6602.

For the Aussie Dollar

It was a relatively quiet week on the economic calendar.

Key stats consumer confidence and employment figures.

It was a mixed bag for the Aussie Dollar. While consumer confidence continued to improve, employment figures were somewhat disappointing.

The unemployment rate rose from 6.8% to 6.9%, driven by a 29.5k fall in employment.

For the Aussie Dollar, it was ultimately market sentiment towards monetary policy and risk aversion that did the damage. There is the talk of an RBA next month…

For the Kiwi Dollar

It was a relatively quiet week on the economic calendar.

Key stats included electronic card retail sales figures and business PMI numbers.

The stats were Kiwi Dollar positive, with retail sales up by 5.4% and the PMI rising from 50.7 to 54.0.

While positive, however, market risk aversion pegged the Kiwi Dollar back in the week.

For the Japanese Yen

It was also a relatively quiet week on the economic calendar.

August’s core machinery orders and finalized industrial production figures were in focus.

The stats were skewed to the negative in the week. Core machinery orders rose by just 0.2%, following a 6.3% jump in July. Industrial production was revised down from 1.7% to 1.0%.

Ultimately, however, it was market risk sentiment that delivered the support for the Yen.

The Japanese Yen rose by 0.21% to ¥105.4 against the U.S Dollar. In the week prior, the Yen had fallen by 0.31%.

Out of China

It was a relatively busy week on the economic data front following last week’s holiday.

Key stats included September’s trade data and inflation figures, which were skewed to the negative.

China’s U.S Dollar trade surplus narrowed from $58.93bn to $37.00bn, driven by a 13.2% jump in imports. Exports rose by a more modest 9.9%.

Inflationary pressures also softened at the end of the quarter. China’s annual rate of inflation softened from 2.4% to 1.7% in September. Wholesale deflationary pressures picked up marginally. The producer price index fell by 2.1%, following a 2.0% decline in August.

In the week ending 16th October, the Chinese Yuan slipped by 0.04% to CNY6.6976. In the week prior, the Yuan had risen by 1.42%.

The CSI300 rose by 2.36%, with the Hang Seng gaining 1.11%.

USD/CAD Daily Forecast – U.S. Dollar Pulls Back After Yesterday’s Move

USD/CAD Video 16.10.20.

Canadian Dollar Is Strong Ahead Of The Weekend

USD/CAD is currently trying to settle below 1.3200 as the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to get below the nearest support level at the 20 EMA at 93.55 but did not manage to gain sufficient downside momentum.

If the U.S. Dollar Index moves below the 20 EMA, it will head towards the next support near 93.30 which will be bullish for currencies which are linked to natural resources like the Canadian dollar.

Today, U.S. reported that Retail Sales increased by 1.9% month-over-month in September compared to analyst consensus which called for growth of 0.7%. Meanwhile, the preliminary reading of Michigan Consumer Sentiment indicated that Consumer Sentiment increased from 80.4 in September to 81.2 in October.

Consumer-related reports were surprisingly strong since U.S. Republicans and Democrats failed to reach consensus on the new coronavirus aid package.

U.S. Industrial Production declined by 0.6% month-over-month compared to analyst consensus which called for growth of 0.5%. Manufacturing Production also declined by 0.3%.

Industrial Production and Manufacturing Production reports were disappointing but it remains to be seen whether they highlighted temporary problems or showed a beginning of a new downside trend.

Technical Analysis

usd cad october 16 2020

USD to CAD is testing the support level at 1.3200. If this test is successful, USD to CAD will gain additional downside momentum and head towards the next support level at 1.3135. There are no material levels between 1.3135 and 1.3200 so this move may be fast.

If USD to CAD manages to settle below the support at 1.3135, it will decline towards the next support level at October lows at 1.3100.

On the upside, USD to CAD needs to stay above the support at 1.3200 in order to continue its rebound. The nearest resistance level for USD to CAD is located at the 20 EMA near 1.3220.

A move above the 20 EMA will signal that USD to CAD is ready to develop additional upside momentum. In this case, USD to CAD will head towards the next resistance level at the 50 EMA near 1.3250.

For a look at all of today’s economic events, check out our economic calendar.

Silver Price Daily Forecast – Silver Tries To Get Above The 50 EMA

Silver Video 16.10.20.

Silver Continues Its Attempts to Gain Additional Upside Momentum

Silver is testing the nearest resistance level at the 50 EMA at $24.55 as the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index failed to settle above the resistance at its 50 EMA at 93.75 and pulled back. The nearest support for the U.S. Dollar Index is located at the 20 EMA at 93.55.

If the U.S. Dollar Index moves below this support level, it will gain additional downside momentum which will be bullish for silver. A weaker dollar is a positive catalyst for silver as it makes it cheaper for buyers who have other currencies.

Meanwhile, gold is roughly flat. Gold is testing its 50 EMA level at $1905 but has so far failed to develop material upside momentum. In case gold moves towards the resistance at the recent highs at $1930, silver and other precious metals will get additional support.

Gold/silver ratio is stuck between the support at the 20 EMA at 77.95 and the 50 EMA at 78.40. In case gold/silver ratio moves below the 20 EMA, it will gain additional downside momentum and head towards October lows near 75.50. This scenario will be bullish for silver.

Technical Analysis

silver october 16 2020

Silver is trying to settle above the nearest resistance level at the 50 EMA at $24.55. If this attempt is successful, silver will gain additional upside momentum and head towards the next resistance level at the recent highs at $25.55.

There are no material levels between $24.55 and $25.55 so this move may be fast. A successful test of the resistance at $25.55 will open the way to the test of the next resistance level at $25.85.

On the support side, the nearest support level for silver is located at $23.90. Yesterday, silver made an attempt to settle below this level, but quickly rebounded back above the $24 level.

If silver manages to settle below the support at $23.90, it will gain additional downside momentum and head towards the next support level at $23.30.

From a big picture point of view, silver’s upside trend remains intact. However, silver risks losing its general upside momentum if it fails to get above the 50 EMA.

For a look at all of today’s economic events, check out our economic calendar.

Daily Gold News: Gold Still at $1,900 as Markets Remain Indecisive

The gold futures contract gained 0.08% on Thursday, as it continued to fluctuate following Tuesday’s retreat below $1,900 price level. Recently gold was retracing a rally from around $1,800 to August 7 record high of $2,089.20 in reaction to U.S. dollar advance, among other factors. Then gold has bounced from the support level marked by mid-August local low of around $1,875, as we can see on the daily chart ( the chart includes today’s intraday data ):

Gold is unchanged this morning, as it is extending a short-term consolidation. What about the other precious metals? Silver lost 0.7% on Thursday and today it is 0.3% higher. Platinum lost 0.24% and today it is 0.7% lower. Palladium gained just 0.03% yesterday and today it is 0.7% lower. So precious metals are mixed this morning.

Yesterday’s U.S. Philly Fed Manufacturing Index has been better than expected, however Unemployment Claims and Empire State Manufacturing Index releases have been worse than expected. Today we will get the important Retail Sales release at 8:30 a.m., among others.

Below you will find our Gold, Silver, and Mining Stocks economic news schedule for today:

Friday, October 16

  • 5:00 a.m. Eurozone – Final CPI y/y, Final Core CPI y/y, Trade Balance
  • 8:30 a.m. U.S. – Retail Sales m/m , Core Retail Sales m/m
  • 9:15 a.m. U.S. – Industrial Production m/m, Capacity Utilization Rate
  • 10:00 a.m. U.S. – Preliminary UoM Consumer Sentiment, Business Inventories m/m

For a look at all of today’s economic events, check out our economic calendar.

Paul Rejczak
Stock Selection Strategist
Sunshine Profits: Analysis. Care. Profits.

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Disclaimer

All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits’ associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.