Majors have been relatively stable this Monday

EUR/USD

Majors have been relatively stable this Monday, with volumes reduced to a minimum amid bank holidays in Japan, the US and Canada. The main theme of the day was the US second presidential debate that took place late Sunday, although it had a limited impact on the FX board, resulting, however, USD supportive.  Before the first debate, US candidates were head to head, but at this point, Hillary Clinton seems to have taken the lead back, emerging victorious from the two debates according to the media.  US polls, said she is leading now by around 5%. Stocks benefited the most, with European equities closing firmly higher. 

There was little in the calendar, although Germany released its August trade balance data, showing that  the foreign trade balance recorded a surplus of €22.2 billion in August 2016, while exports increased by 9.8% and imports by 5.3% in the mentioned month, on a year-on-year basis. Also, sentiment in the EU improved according to the Sentix Confidence Index,  which printed 8.5 in October from 5.6 in September.

As for the EUR/USD pair, it slowly but steadily  moved lower all through the day, contained by selling interest in the 1.1200/10 region, and nearing the base of its latest range ahead of the Asian opening. The technical picture is increasingly bearish, given that in the 4 hours chart, the price has faltered around its 100 and 200 SMAs before extending its decline below a now bearish 20 SMA. Technical indicators in the mentioned time frame maintain downward slopes within negative territory, supporting a bearish extension, despite the limited momentum, this last due to reduced volumes. 

Support levels: 1.1120 1.1080 1.1040    

Resistance levels: 1.1160 1.1205 1.1245

USD/JPY

The USD/JPY pair advanced up to 103.78 this Monday, erasing most of Friday's losses and recovering the upward potential seen over the last week. There was no certain catalyst for this current recovery, as both economies saw null financial activity due to different local holidays at the beginning of the week, although improved market sentiment put the safe-haven yen under pressure. The pair has completed a pullback towards its 100 DMA during the last couple of days and not only held above it, but also bounced from it, indicating that market sentiment has changed towards the pair, and that an interim bottom may have been reached. The mentioned indicator stands at 102.60, and bulls are unlikely to give up, as long as the price holds above it. Short term, the 1 hour chart shows that technical indicators are beginning to look exhausted towards the upside, turning lower within overbought territory, but in the same chart, the price is holding above a bullish 100 SMA currently around 103.35, the immediate support. In the 4 hours chart,   the Momentum indicator is unable to enter positive territory, but the RSI indicator heads north around 62 whilst the price is well above its 100 and 200 SMAs, favoring another leg higher towards 104.15, last week's high, and beyond. 

Support levels: 103.35 102.90 102.60

Resistance levels: 103.80 104.15 104.50

GBP/USD

The British Pound remained under selling pressure at the beginning of the week, undermined by dollar's strength and headlines showing that UK business leaders have publicly warned PM Theresa May about avoiding a "hard Brexit" that could do "serious and lasting damage to the UK economy," asking also for barrier-free access to the EU's single market, vital for the UK economy.  The GBP/USD pair traded with a slightly positive tone at the beginning of the day, but was unable to sustain gains above the 1.2400 mark, ending the day near its lows in the 1.2350 region. The macroeconomic calendar will remain extremely thin all through this week, which means that the pair will depend mostly on sentiment and dollar's self strength/weakness. Technically and in the short term, the 1 hour chart presents a bearish tone, given that the price was unable to extend beyond its 20 SMA, while technical indicators head modestly lower within negative territory, with limited strength. In the 4 hours chart, the Momentum indicator consolidates near oversold readings, the RSI indicator heads south around 28, while the 20 SMA maintains a strong bearish slope above the current level, now around 1.2530, all of which confirms the negative outlook of the pair. 

Support levels: 1.2410 1.2375 1.2340 

Resistance levels: 1.2480 1.2525 1.2560 

AUD/USD

The AUD/USD pair regained the 0.7600 level this Monday although the rally stalled at 0.7628 and the pair closed the day barely above the critical figure. The upward move was triggered by comments coming from Russian President Vladimir Putin, who said that he is willing to join OPEC in an oil´s production cap. The Aussie found support also on the positive tone among stocks' traders, albeit only European markets were active in this first day of the week. The recovery of the AUD/USD left a positive technical tone ahead of the Asian opening, although a steeper recovery is yet to be confirmed. In the 1 hour chart, technical indicators have retreated from near overbought levels before turning flat within positive territory, while the 20 SMA is losing its upward strength below the current level and around 0.7600, a very close immediate support. In the 4 hours chart, the price is currently a few pips above a horizontal 200 EMA, while the 20 SMA is horizontal below it, both around the 0.7600 level. Technical indicators in this last time frame have lost upward strength after entering positive territory, presenting a neutral stance. The price needs now to extend beyond 0.7650 to anticipate some further gains for this Tuesday. 

Support levels: 0.7600 0.7560 0.7520    

Resistance levels: 0.7650 0.7695 0.7730

Dow Jones

Following Friday's gains, US indexes extended their gains in futures trading this Monday, with a local holiday keeping banks closed. The DJIA added over 100 points, trading around 18,340 ahead of the Asian opening after closing at 18,240 last week, underpinned by the strong recovery in oil prices and the positive mood that surged among worldwide traders following the US second presidential debate. Despite reduced volumes, the DJIA advanced intraday up to 18,404, its highest since September 22nd, and the daily chart shows that the index bounced after testing the 100 DMA, while technical indicators edge modestly higher above their mid-lines. In the 4 hours chart, technical indicators retreated within positive territory, following the benchmark's pullback, but it also stands above the 200 SMA, for the first time in two weeks. Overall, the risk is towards the upside, although it will depend on how the market reacts during the upcoming Asian session, as if the bullish tone among equities persists, it will likely support further gains in US equities this Tuesday.  

Support levels: 18,323 18,265 18,218

Resistance levels: 18,404 18,448 18,4

FTSE 100

The FTSE 100 extended its advance, ending the day at 7,097.50, up by 0.75%, and not far from record highs posted in April 2015 at 7,129. The Footsie was supported by a sharp rally in oil prices following Russian President Putin pledge to join the OPEC's output cap. Mining and energy-related equities were the best performers, with BHP Billiton closing the day up 2.80%, followed by Royal Dutch Shell which closed 2.75% higher. Anglo American and Rio Tinto added over 2% each. Renewed selling pressure on the Pound continues favoring the benchmark, in spite of the risk that a falling currency represent in the wider view. Technically, the daily chart favors additional gains, with the index firmly above a bullish 20 SMA, the Momentum indicator consolidating well above the 100 level, and the RSI indicator heading north around 70. In the 4 hours chart, the index bounced multiple times from a bullish 20 SMA, currently at 7,060, while technical indicators have turned horizontal well above their mid-lines, reflecting the low ongoing low volume than suggesting the benchmark is losing upward pace. 

Support levels: 7,094 7,060 7,005

Resistance levels: 7,129 7,170 7,210

DAX

Following a tepid start, European equities surged ahead of the close, as a jump in oil prices fueled energy and mining-related equities. The German DAX surged 133 points or 1.27% and closed at 10.624.08, paring gains around last week highs. Deutsche Bank was among the best performers, ending the day up by 2.82%, although uncertainty over the final number of the US Department of Justice's fine may put the share, and the whole DAX under pressure during the upcoming days. There were some reports indicating a possible settlement behind the mentioned gains, but there weren't confirmed. Commerzbank, on the other hand, led losers, closing the day down 0.54%.  Daily basis, the benchmark bounced after testing its 20 SMA, while technical indicators in the mentioned time frame extended their advances within positive territory, presenting a bullish tone. In the shorter term, the 4 hours chart  shows that technical indicators have turned lower within positive territory, while the index remains above its moving averages, indicating a limited upward momentum at this point. 

Support levels: 10,602 10,561 10,514 

Resistance levels: 10,647 10,705 10,750

Nikkei

Japanese banks were closed in observance of Health-Sports Day, which means there was no activity in local shares. The Nikkei, however, surged in electronic trading, now around 16,957 from the latest registered close last Friday at 16,860.09, as market's sentiment improved following the US second presidential debate. The benchmark traded as high as 16,987 before retreating partially, and the daily chart shows that it has erased all of its latest losses, briefly surpassing September's high. The index is  bullish according to technical readings, given that indicators have turned back higher after a modest downward move within positive territory, while it has moved back away from its moving averages, over 500 points below the current level. In the 4 hours chart, the upward momentum eased, as indicators turned south, but hold above their mid-lines, while the 20 SMA is turning flat around 16,893, providing intraday support in the case of a bearish move. 

Support levels: 16,893 16,842 18,767

Resistance levels: 16,987 17,051 17,103

Gold

Spot gold recovered some ground this Monday, but closed the day marginally higher around $ 1.259.80 a troy ounce. The commodity surged roughly 1% at the beginning of the day, but trimmed most of its gains during the London session, in which seems to have been a correction after gold fell to a fresh 4-month low. Looking at technical readings, the price stalled its recovery around Friday's high and below the 61.8% retracement of the bullish run between May and July, at 1,266.30 the level to surpass to confirm further recoveries ahead. In the daily chart, however, technical indicators have turned flat within oversold territory, still far from confirming an upcoming upward correction, while the price is well below its moving averages. In the 4 hours chart, the price is stuck around a bearish 20 SMA, while the Momentum indicator aims higher around its mid-line, although the RSI indicator has resumed its decline around 38, indicating that the risk remains towards the downside. 

Support levels: 1,256.30 1,249.50 1,241.35 

Resistance levels: 1,266.30 1,277.50 1,287.10

WTI Crude Oil

Crude oil prices resumed their advance, with West Texas Intermediate crude futures trading as high as $51.57 a barrel, the highest level since mid June. The commodity jumped higher on headlines announcing that Russian President, Vladimir Putting, is willing to support  OPEC's efforts to limit oil supply to boost prices. Russia is the world's largest energy exporter, which means that the country joining the deal could be a game changer for energy markets. WTI trades not far from the mentioned high ahead of the Asian opening, and the daily chart presents a strong upward momentum that supports further gains, given that technical indicators have resumed their advances after a limited downward correction from overbought levels, with the Momentum now heading north at fresh 2-month highs. In the same chart, the 20 DMA has accelerated its advance above the 100 DMA, supporting an upward extension. In the 4 hours chart, the price is above a bullish 20 SMA after briefly falling below it, currently around 50.00 while the technical indicators have lost upward strength and turned flat in positive territory, rather reflecting the low volumes than suggesting the upside potential is exhausted. 

Support levels: 50.90 50.00 49.25

Resistance levels: 51.60 52.20 53.00