Daily Analyses

24.11.2020

Fundamentals

Europe

News and data releases were significant in Eurozone. A statement from the EU Parliament said that the EU budget was prepared as a result of months of negotiations, the delay in the approval process was disappointing and there was no possibility of a renegotiation of the budget, according to a US-based publication, Parliament will meet on 28 December for the approval of Brexit talks, and members are ready to approve a possible deal. Michael Barnier, the EU's chief Brexit negotiator, also noted that fundamental differences still remain in the Brexit talks and that the time for negotiations is quite short. On the other hand, the European Central Bank (ECB) published the study report. According to report, many companies are under the risk of becoming consistent and a composite indicator to measure the company's financial and risk structure will be used.

Also, a member of the ECB Governing Council, Isabel Schnabel said that financial institutions outside the banking sector started to play a more active role in money markets. In addition, French Finance Minister Bruno Le Maire announced that they would unveil a support plan for businesses this week. According to preliminary data for November from IHS Markit, a London-based global information provider, the Eurozone manufacturing purchasing managers index (PMI) reached 53.6 points, exceeding market expectations of 53.1 points. Services PMI was 41.3 points against market expectations of 42.5 points and Composite PMI was 45.1 points, below market expectations of 45.8 points. In Germany, manufacturing PMI was 57.9 points, above market expectations of 56.5, and composite PMI was 52.0 points, above market expectations of 50.4. Service PMI failed to meet market expectations of 46.3 points and was registered as 46.2.

US

In the United States, President-elect Joe Biden, who will take over on January 20, announced his preference for Anthony Blinken as Secretary of State and Jake Sullivan as National Security Adviser, as he continues to determine who will be in his cabinet. On the other hand, US media claimed that the current administration will decide to restrict the Trump administration on the grounds that it has military links to 89 Chinese companies, and that it is preparing a partnership plan that includes EU countries in response to China's economic threat. Meanwhile, White House economic adviser Larry Kudlow said the US economy is not slowing down and a targeted stimulus package has secured the economy, while FED Chairman Jerome Powell and US Treasury Secretary Steve Mnuchin will meet on December 1 on the labor support act.

On the other hand, Kansas City FED President Esther George said unemployment is likely to fall and inflation is likely to stabilize, while Richmond FED President Thomas Barkin noted that the vaccine may not be widely available until the summer of 2021, and markets may need government help for a few more months. Chicago FED President Charles Evans said interest rates would remain stable until 2023, even if the economy began to recover more quickly. Looking at the macroeconomic agenda, according to preliminary data published by IHS Markit, manufacturing PMI in November was 56.7 points, above market expectations, which were 53.0 points, and service PMI exceeded market expectations of 55.0 points and reached 57.7. In addition, composite PMI was 57.9 points.

Britain

In the coronavirus vaccine studies conducted by the British pharmaceutical company Astrazeneca and Oxford University, it was announced that high efficiency was achieved as a result of the tests from the UK and Brazil and that there was a capacity to produce 3 billion doses in 2021. Pascal Soriot, the company's CEO, stated that the vaccine is highly effective and will create spring weather on public health.

British Prime Minister Boris Johnson said the news of the vaccine was excellent but that they should wait for safety checks and that national restrictions would be relaxed after December 2, as he promised, as there was a decline in coronavirus cases. Health Minister Matt Hancock also announced that they had ordered 100 million doses. On the other hand, the government spokesman who made a statement about Brexit negotiations,stated that they want to reach agreement in the talks. Irish PM, Michael Martin, noted that they can see Brexit draft by the end of this week, and they get the message of achieving progress in the negotiations from both sides.

The Bank of England (BoE) Governor Andrew Bailey stated that no-deal Brexit will cause more long-term damage to the UK economy than the coronavirus. And Chief Economist Andy Haldane added that despite the positive course of vaccination studies, the pandemic will leave permanent damage on issues such as debt, unemployment, health and that he expects the economic recovery to be sharper than the recession. According to IHS Markit's preliminary data for November, while manufacturing PMI was announced at 55.2 points, exceeding the market expectations of 53.3, and composite PMI was 47.4, above the expected value of 42.5. However, service PMI did not meet the market expectations of 52.3 points and reached 45.8 points.

Asia & Turkey

The Asian session had limited news flow due to a bank holiday in Japan, while developments in the China were followed the markets. In response to the U.S. claim that it would impose restrictions on 89 Chinese companies, the Chinese Foreign Ministry said that the United States should stop using national security as a pretext and that these steps are contrary to trade rules. State Department Spokesperson Zhao Lijian stated that they firmly opposed an agreement between the USA and Taiwan that strengthened military relations and regretted the USA's withdrawal from the Open Skies Agreement. Government Advisor for Foreign Policy Yongnian stated that the US-China relations will not improve immediately after Biden's take-over, but that the government should take steps to improve relations whenever possible.

In Turkey, it was important for Treasury and Finance Minister Lutfi Elvan to meet with Justice Minister Abdulhamid Gul and explain that they made an assessment before the meeting with the business world and NGOs and that they would seek solutions to the problems after receiving the views of the business world. Meanwhile, the Foreign Ministry showed reaction to a German frigate stopping a Turkish ship in the Eastern Mediterranean and conducting an unlawful examination. Finally, Oguzhan Özbaş, Deputy Chairman of the Central Bank of the Republic of Turkey (CBRT), announced that despite the slowdown in the economic recovery, positive growth will prevail in 2020 and that they are vigilant about the risks that the depreciation of TRY creates for companies.


Indicators

MSCI iShared ETF’s

Msciisharedetfs
MSCI iShared ETF’sDownload Image

MSCI ETF indices are a measure of stock market performance for a particular region. Exchange traded funds track ETF returns and risk measurements before taking action against the region to be invested.

10Y Bond Yields

10Ybondyields
10Y Bond YieldsDownload Image

Yields on government bonds are determined by buying and selling in the secondary market, while a high yield means that the state borrows at a higher interest rate, and a low yield means that the state borrows at a lower interest rate.


US Index

USIndex

Appreciation in emerging country currencies is gaining momentum, while the dollar index continues to be weak. Technically, if the index breaks 92.00, which points to Fibonacci 100.0 percent expansion line that it tested with its downward movement, it can also end the minor price channel and deepen to 91.60 and 91.20 supports. 92.80 and 93.20 resistances can be followed in possible trials that the index can perform by holding onto this level.

Support92.0091.6091.20
Resistance92.8093.2093.60

Parities

EURUSD

The dollar's weak course against the euro, which led to positive pricing in emerging country currencies, supports the rise in the pair. However, if the pair breaks the upper boundary line of the channel pattern that descends together with 1.1880 resistance, moving the desire to move in favor of euro to the new trading day, it can raise 1.1920 and 1.1960 resistances. And we will not expect the pair's possible retreat to gain momentum unless it breaks 1.1800 support.

Support1.18001.17601.1720
Resistance1.18801.19201.1960

USDTRY

The currency pair declined aggressively to the main ascending trend with strong purchases of the Turkish lira, then it received responses in this level. If the pair, which aims to recover some of its losses with these responses, exceeds 7.9400 above, it will test 8.0000, which is a psychological resistance. Depending on the weakening of the responses, 7.7600 support below 7.8200 can be monitored for possible relaxation that may be observed.

Support7.82007.76007.7000
Resistance7.94008.00008.0600

GBPUSD

Purchases of sterling assets, with British Pharmaceutical Company AstraZeneca announcing that the coronavirus vaccine it developed in conjunction with Oxford was highly effective, moved the pair above the ascending channel pattern. Although it does not hold in this region and retreats somewhat, the pair, which maintains its Sterling purchases, can test 1.3440 after 1.3400, in case, it can exit the channel strongly after exceeding 1.3360 on the second trading day of the week. In possible downward movements of the pair, 1.3280 level passing through the lower boundary line of the minor ascending channel can be observed as strong support.

Support1.32801.32401.3200
Resistance1.33601.34001.3440

USDJPY

USDJPY recovered from 103.70 level in its stable decline in the minor price channel, completed the retracement movement by reaching Fibonacci 50.0 percent. After the retracement movement in question, we will follow 103.70 support below 104.30 and 104.00 in downward transactions of the pair, which can technically be expected to move towards the seller's course. For possible attacks that the pair can perform above Fibonacci retracement of 50.0 percent, we will follow 104.90 and 105.20 resistance levels.

Support104.30104.00103.70
Resistance104.90105.20105.50

Commodities

XAUUSD

Investor risk appetite, boosted by successive coronavirus vaccines from pharmaceutical giant companies, is dampening demand for safe haven assets. Technically, the commodity could deepen its losses to 1786 support, in case, it can break 1800 support below 1812, after staying below 1848 level, the critical barrier it ended with selling pressure. In case of a possible recovery of the commodity, 1836 and 1848 resistances will be on our radar.

Support181218001786
Resistance183618481862

USOIL

Crude oil broke the wedge pattern by carrying out positive pricing with the optimism brought by the coronavirus vaccine. The commodity, which indicates that it will maintain its progress in the ascending trend after terminating its current pattern, can test 44.60 after 44.00, in case, it can stay above Fibonacci 100.0 percent expansion line, which works as a critical barrier. Retreats may provide an opportunity to recover from 43.00 support, indicating the trend line.

Support43.0042.4041.80
Resistance44.0044.6045.20

XAGUSD

After its short course around the 50-period simple moving average, the precious metal appears to have broken the ascending trend line with moderate downward movements. If the commodity moves below the lower limit line of the minor price channel, which works as trend's support after this move, which indicates that its upward course coming from March ended, it can continue its decline to 23.00 and 22.60 supports. On the other side, 23.80 and 24.20 resistances can be monitored in possible attempts to recover the commodity by holding on to the lower boundary line in question.

Support23.0022.6022.20
Resistance23.8024.2024.60

Indices

DAX30

DAX30 index, which declined in the ascending trend with a weak course, encountered a critical barrier at 13 300 in its upward movements. The index can also test 13 530 resistance above 13 400 on its first transition to this level in tests that it can perform in line with current buying pressure. 13 000 can be followed below 13 120, in case, the weak index gets below the ascending trend.

Support13 12013 00012 860
Resistance13 40013 53013 660

SP500

SP500 limited its moderate easing in the ascending trend, seems to be technically preparing for a continuation pattern. If the index breaks the upper boundary line of the wedge with permanent movements that it will perform in line with upward movements in the ascending trend, it will possibly target 3 674, which is the peak of all time, above 3 640. We will not expect the index to gain volume unless the ascending trend line, which indicates 3 580 support, is broken. However, 3 545 support will be on our radar in case of a possible transition.

Support3 5803 5453 510
Resistance3 6403 6743 710

Cryptos

BTCUSD

Bitcoin, the leading cryptocurrency, climbed to a 2-year high with aggressive purchases. Although the upward momentum weakens somewhat, Bitcoin, which we expect to maintain its upward potential as long as it remains above the minor trend, can regain momentum and reach the target position of 19 000 resistance, in case, it can exceed 18 600 and 18 800 resistance levels. In possible take profit sales, on the other side, 18 200 and 18 000 supports will be on our radar.

Support18 20018 00017 800
Resistance18 60018 80019 000

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