Analysis of currency and stock markets 02.10.2019

Trading ideas for GOOGLE (Alphabet Inc.)

The stock is trading in the range of the lower boundary of the upward price channel and 365-150 exponential moving averages. The pivot zone 1205.50 restrains sellers, and the Stochastic Oscillator indicator signals oversoldness of the stock.  The nearest resistance level is 1213.0.

Trading recommendations:

Buy above 1213.0

Stop Loss under the pivot zone 1205.50.

Target levels – 1247.0; 1295.0.

USDJPY Technical analysis

The pair is trading in the range 107.60-108.45. It may continue to decline if the data on the US economy from ADP will be weaker than forecasts. In this case, expect the pair to drop on the growth of demand for protective assets, which include the yen. At the same time, positive values of the indicator can lead to a local increase in the price.

The price is below the middle Bollinger band, at the level of SMA 5 and below SMA 14. The moving averages give a sell signal. RSY is below 50% and turning downwards. Stoch are oversold and uninformative.

Trading recommendations:

If the data is worse than expected, the pair will break the mark of 107.60 and rush to 107.00-05. But if it’s positive, there is a probability of price recovery to 108.45.

EURGBP Analysis

Analysis based on round-number levels, price channels and modified Elliot Waves

The overall trend of the currency pair is downward. The pivot zone 0.8905 holds back the Bulls.

The pair is trading on TF H1 in the range of the round Important level of 0.8900. A bearish divergence has formed on the Awesome Oscillator indicator. The start fractal formed below 135 moving average. The breakout of the start fractal will give the formation of a downward wave structure within the General downward trend.

Trading recommendations:

Sell below 0.8863.

Stop Loss for round minor level 0.8920.

Target levels – 0.8800; 0.8700.

Important support and resistance levels

When buying an option against the trend, it is necessary to confirm other technical analysis tools – the presence of divergence, reversal candlestick patterns. Buy against the trend strictly on the retest level! Buying an option before publishing important economic news is considered risky. The expiration time depends on the strength of the level and confirmation by additional tools of technical and fundamental analysis.

AEROFLOT Stock Analysis

Aeroflot is fluctuating between 101.08 support and 104.50 self-resistance levels, which are the 38.2% and 50.0% Fibonacci retracement levels, respectively.

The price is moving under the negative impact of SMA 20 which is the first resistance level while SMA 50 is still moving near the next resistance level.

Stochastic is in a sideways path within overbought area, but it signals a negative crossover between its lines and out of this area, thus we may see an attempt from the price to test the support level 101.08.

Expected trend for today: Neutral

AUD Analysis

The Australian dollar fell against its US counterpart yesterday following the central bank's decision to cut interest rates to an all-time low and on the eve of developments and economic data expected Wednesday by the US economy, the largest economy in the world, which includes Federal Reserve Committee member John Williams in California

At 05:57 AM GMT, the Australian dollar against the US dollar fell by 0.03% to 0.6700 levels compared to the opening levels at 0.6703, after the pair reached its highest level during the session at 0.6718, while the lowest level at 0.6698 ..

The decision by the central bank in the context of monetary policy transformations to face the slowdown in economic growth at the fastest pace since the global financial crisis.

The Reserve Bank of Australia cut its benchmark interest rate by 25bp to 0.75%, the lowest level on record and in line with analysts' expectations.

Bank President Philippe Lu commented on the decision that it aims to support the labor market, noting that the possibility of further cut interest rates in the coming period to promote economic growth.

Lu stressed that he and his team will monitor what is happening on the world economic scene and government statements to take next steps when necessary.

Investors are currently awaiting the US economy to release preliminary data on the labor market with the release of the indicator of the change in private sector jobs, which may reflect the slowing pace of job creation to 140 thousand jobs added to 190 thousand jobs added in August, hours before the disclosure On the monthly report on non-farm payrolls and unemployment rates plus hourly income for September.

This comes before we see FOMC Chairman and New York Federal Reserve Chairman John Williams taking part in a moderate debate at the UCSD Roundtable. Otherwise, markets are looking forward to Fed Governor Jerome Powell's opening remarks tomorrow. Hosted by the Federal Reserve in Washington.

Technical analysis:

AUDUSD succeeded in touching our awaited target at 0.6670 and bounced up from there to settle around 0.6700, and the price remains within the descending main channel, keeping the overall bearish scenario valid and effective during the coming period, waiting to visit 0.6595 as the next major stop.

Therefore, we will continue to favor the bearishness unless 0.6825 is breached and hold above it.

Expected trading range for today is between 0.6660 support and 0.6750 resistance

Expected trend for today: Bearish

EUR Analysis

The single currency of the European Union fluctuated in a narrow and bullish range during the Asian session to witness the rebound for the second consecutive session from the lowest since May 12, 2017 against the US dollar amid the lack of economic data by the euro-zone economies and on the eve of developments and economic data Expected on Wednesday by the US economy which includes the speech of the Federal Reserve Committee member John Williams in California.

At 05:08 AM GMT the EURUSD rose 0.01% to 1.0934 levels compared to the opening at 1.0933, after the pair reached its highest level during the session at 1.0941, while the lowest level at 1.0930.

Investors are currently awaiting the US economy to release preliminary data for the labor market with the release of the indicator of the change in the private sector jobs, which may reflect the slowing pace of job creation to 140 thousand jobs added from 190 thousand jobs added in August, hours before The monthly report on non-farm payrolls and unemployment rates in addition to the hourly rate of income for September.

This comes before we see FOMC Chairman and New York Federal Reserve Chairman John Williams taking part in a moderate debate at the UCSD Roundtable. Otherwise, markets are looking forward to Fed Governor Jerome Powell's opening remarks tomorrow. Hosted by the Federal Reserve in Washington.

Technical analysis:

EUR / USD held steady at 1.0935 after yesterday's high, and the Stochastic is showing overbought areas, while SMA 50 is forming negative pressure against the price, which supports the chances of resuming the bearish trend that is regulated within the descending channel shown in the picture. Mainly test 1.0857 level.

Therefore, we hold onto our bearish outlook for today, provided stability below 1.1020, noting that exceeding the mentioned target will push the price to 1.0755 as the next major target.

Expected trading range for today is between 1.0840 support and 1.1000 resistance.

Expected trend for today: Bearish.

Gold Analysis

Gold futures fluctuated in a narrow range, tilted lower during the Asian session to witness the rebound for the fourth session in seven sessions from the highest since September 5, ignoring the decline of the US dollar index for the second consecutive session from the highest since May 12, 2017 According to the inverse relationship between them on the eve of developments and economic data expected on Wednesday by the US economy, the largest economy in the world, which includes the speech of Federal Committee member John Williams in California.

In the morning GMT gold futures for December delivery fell 0.45% to trade at $ 1475.74 an ounce compared with the opening at $ 1479.90 an ounce, while the US dollar index fell 0.01% to 99.16 compared to the opening at 99.17.

Investors are currently awaiting the US economy to release preliminary data for the labor market with the release of the indicator of the change in the private sector jobs, which may reflect the slowing pace of job creation to 140 thousand jobs added from 190 thousand jobs added in August, hours before The monthly report on non-farm payrolls and unemployment rates in addition to the hourly rate of income for September.

This comes before we see FOMC Chairman and New York Federal Reserve Chairman John Williams taking part in a moderate debate at the UCSD Roundtable. Otherwise, markets are looking forward to Fed Governor Jerome Powell's opening remarks tomorrow. Hosted by the Federal Reserve in Washington.

In another context, we followed yesterday US President Donald Trump that the Federal Reserve monetary policy and the strength of the dollar are the reason for the weak performance of the industrial sector in his country, pointing out that the Federal Reserve and its governor Powell allowed the dollar to rise against other currencies, which negatively affected US industrialization, he said, adding that the interest rate on federal funds is too high and that the Fed is hostile to those decisions.

President Trump's tweets on his official Twitter account renewed his attack on the Fed and Powell's monetary policy came after the ISM manufacturing index showed deflation widened to 47.8 vs. 49.1 in August, contrary to expectations. Widening at 50.4, reflecting the worst performance of the index since June 2009.

Technical analysis:

The price of gold has retested the broken neckline of the head and shoulders pattern and held it below it, starting to decline now, accompanied by stochastic reaching overbought areas, whilst the SMA represents 50 negative pressure against the price.

Therefore, these factors encourage us to hold onto our bearish expectations over the coming sessions, targeting 1447.00 then 1413.10 as the next major stops, noting that the continuation of the expected decline requires stability below 1485.00 and 1488.90.

Expected trading range for today is between 1450.00 support and 1490.00 resistance.

Expected trend for today: Bearish.

JPY Analysis 

The US dollar fluctuated in a narrow uptrend during the Asian session against the Japanese yen following the developments and economic data that followed from the Japanese economy and on the eve of developments and economic data expected on Wednesday by the US economy, the largest economy in the world, which includes the speech of Federal Committee member John Williams in California.

At 05:57 AM GMT, the USDJPY gained 0.05% to 107.80 levels from 107.75 opening levels, after hitting a session high of 107.89 and a low of 107.64.

The Consumer Sentiment reading came in at 35.6 vs. 37.1 in August, worse than expected at 38.2, hours before the Japanese government decided to introduce a 10% sales tax increase from 8%. This is despite wage stability and weakening consumer spending growth in the world's third largest economy.

It is noteworthy that the Japanese government expressed that the increase aims to help cover the growing social insurance due to the high proportion of the elderly in Japan, and Japanese Economy Minister Yasushi Nishimura also noted yesterday that the consequences of raising the sales tax will be closely monitored while monitoring the external developments and its implications for the local economy , While emphasizing his belief that the Bank of Japan is capable of taking appropriate monetary policy.

On the other hand, investors are currently awaiting the US economy to release preliminary data for the labor market with the release of the indicator of change in private sector jobs, which may reflect the slowing pace of job creation to 140 thousand jobs added to 190 thousand jobs added in August, before Hours of disclosure of monthly non-farm payrolls and unemployment rates plus hourly income for September.

This comes before we see FOMC Chairman and New York Federal Reserve Chairman John Williams taking part in a moderate debate at the UCSD Roundtable. Otherwise, markets are looking forward to Fed Governor Jerome Powell's opening remarks tomorrow. Hosted by the Federal Reserve in Washington.

Technical analysis:

USD / JPY rebounded strongly after attempting to breach the 108.30 level yesterday, testing the pivotal support of 107.70, noting that the price starts today with a bullish bias to move away from the mentioned support, supported by the positive stochastic indicator.

Therefore, the bullish scenario will remain valid for the coming period, organized within the ascending channel shown in the picture, whose targets begin with breaching 108.30 to confirm the impulse towards 109.30, while recalling the importance of stability above 107.70 to continue the expected rise.

Expected trading range for today is between 107.20 support and 108.70 resistance.

Expected trend for today: Bullish.