Daily Market Report

U.S. Crude Stockpiles Unexpectedly Fall

October 1, 2020

U.S. Stock Market

Pivot : 28,020 Last : 27,780

Review:

U.S. indices closed higher on Wednesday, thanks to gains across the Healthcare, Consumer Goods, and Basic Materials sectors. The Dow Jones rose by 1.2%, the S&P 500 climbed 0.83%, and the NASDAQ Composite added 0.74% to its value.

Technical comment:

The Dow Jones RSI is bearish and calls for further downside.

Preference scenario:

Short positions below 28,020 with targets at 27,235 and 26,940 in extension.

Alternative scenario:

Above 28,020, look for further upside with 28,360 and 28,590 as targets.

Resistance 28,020 28,360 28,590
Support 27,235 26,940 26,680

USD/JPY

Pivot : 105.60 Last : 105.44

Review:

The yen's haven status may have suffered in the wake of a pandemic-era collapse in global rates. Yesterday Japan published its August Retail Trade report, which beat expectations, falling by just 1.9% YoY. The preliminary estimate for Industrial Production indicated a modest monthly improvement, although the year-on-year reading was -13.3%, worse than the -10% expected. August Housing Starts, were down 9.1%, while Constructions Orders were up by 28.5%.

Technical comment:

The RSI is below its neutrality area at 50%.

Preference scenario:

Short positions below 105.60 with targets at 105.30 and 105.20 in extension.

Alternative scenario:

Above 105.60, look for further upside with 105.80 and 106 as targets.

Resistance 105.60 105.80 106.00
Support 105.30 105.20 105.00

Gold

Pivot : 1,895 Last : 1,887

Review:

Gold finished the third quarter up more than 4% as a run to record highs above $2,000 delivered gains for longs, despite volatility induced by the strong dollar.

Technical comment:

As long as 1,895 is the resistance, look for choppy price action with a bearish bias.

Preference scenario:

Short positions below 1,895, with targets at 1,880 and 1,875 in extension.

Alternative scenario:

Above 1,895, look for further upside with 1,902 and 1,907 as targets.

Resistance 1,895 1,902 1,907
Support 1,880 1,875 1,866

Oil

Pivot : 40 Last : 40

Review:

U.S. crude stockpiles fell by 2 million barrels last week, defying trade expectations of a build, but long investors in the commodity still lost almost 6% in September.

Technical comment:

The RSI is mixed to bullish.

Preference scenario:

Long positions above 39.55 with targets at 40.35 and 40.80 in extension.

Alternative scenario:

Below 39.55, look for further downside with 39.25 and 38.70 as targets.

Resistance 40 41 41
Support 40 39 39

EUR/USD

Pivot : 1.1710 Last : 1.1725

Review:

The risk switch was turned off and on throughout the day, and the dollar traded accordingly. The EUR/USD pair traded as high as 1.1754, and as low as 1.1684, ending the day in the red in the 1.1710 price zone. During Asian trading hours, the market focused on the U.S. presidential debate, which ended up spurring risk aversion, as it provided little of substance to speculative interest, except that President Trump refused to say if he would accept the election result.

Technical comment:

A support base at 1.1710 has formed and has allowed for a temporary stabilisation.

Preference scenario:

Long positions above 1.1710 with targets at 1.1755 and 1.1775 in extension.

Alternative scenario:

Below 1.1710, look for further downside with 1.1685 and 1.1665 as targets.

Resistance 1.1755 1.1775 1.1795
Support 1.1710 1.1685 1.1665

GBP/USD

Pivot : 1.2875 Last : 1.2917

Review:

The GBP/USD pair reached a fresh weekly high of 1.2942 and ended the day with gains around the 1.2900 level, helped by mostly encouraging British data, renewed risk appetite, and the dollar’s broad weakness. The UK also published the final reading of its Q2 GDP, which was revised to -19.8% from -20.4%.

Technical comment:

The RSI is above its neutrality area at 50.

Preference scenario:

Long positions above 1.2875 with targets at 1.2945 and 1.2980 in extension.

Alternative scenario:

Below 1.2875, look for further downside with 1.2840 and 1.2805 as targets.

Resistance 1.2945 1.2980 1.3000
Support 1.2875 1.2840 1.2805

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