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ATFX Market Outlook, 2019 Oct 24
Personal opinions today:
British prime minister Boris Johnson cannot push through procedural legislation for a Brexit deal, will be delayed Brexit at the end of this month. Under the procedure now, the British parliament must submit an extension to the European Union and obtain approval from the member of the European Commission. Besides, by that deadline, parliament must approve a timetable for a deal to leave the European Union, or hold a second referendum in the interim to decide whether to proceed. Assuming that the situation is not stable; the British pound is facing a high risk of decline.
Market sentiment on the negative impact of the Brexit, risk aversion on, the stock market may fall, driving gold and silver prices rebound low. If it without progress well in China and US trade relations, the price of gold could have exceeded $1,500, and the price of crude oil could have fallen. But as the trade climate between China and the United States continues to ease, tensions with Iran have cooled. Also, U.S. sanctions on Turkey eased tensions in the Middle East, which helped gold prices downward and crude oil prices get a boost.
Today is the ECB interest rate decision and the European central bank President Mario Draghi attended the last monetary policy meeting and press conference. The ECB's monetary policy was widely expected to remain unchanged, but the new ECB President Christine Lagarde policy issues and the formal resumption of the ECB's TLTRO program. The market forecast, this European central bank interest rate meeting, may again put forward on the expansion of policy easing research report. If the ECB will come up with a rate cut or other related policy, it is believed to be good for Europe's future economy, but the euro could come downward first.
[Important financial data and events]
Note: * is the degree of importance
15:30 German Manufacturing PMI ***
16:00 Eurozone Manufacturing PMI **
19:45 ECB Monetary policy decision ***
20:30 ECB Press conference ***
20:30 U.S. Jobless claims last week **
20:30 U.S. Durable goods orders **
21:45 U.S. Markit manufacturing/services PMI **
22:00 U.S. New home sales **
Brexit uncertainty, bearish for euro. The German manufacturing PMI was released today, followed by the same data for the Eurozone. If the result is lower than expected, it is bearish for the Euro. Besides, this evening is the ECB monetary policy decision, before can be affected by the sentiment, the Euro may fall. Refer to support bit 1.1090. If there is no dovish talk from the ECB, but the Fed releases release interest rate cuts, it will be bullish for the Euro.
Pound to dollar
The timetable for a Brexit deal and whether there will be a second referendum remain undecided, limiting gains and further bearish the pound. Technical analysis, if the pound failed to break the rebound wave resistance 1.3005, has been proposed to pay attention to the decline of support level 1.2840. A weak for Eurozone and German manufacturing PMI today, the ECB's intention to ease policy or negative news on Brexit could all be bearish for pound.
Australian dollar to US dollar
The failure of Brexit by British parliament affected investor sentiment, with the US dollar, Australian dollar and New Zealand dollar adjusting gains. Technically, the last month's high of 0.6890 will be an essential resistance level reference, remain under observation. Trend strength, the preliminary determination of breakthrough failure, trend ready to adjust. Of course, if the Fed makes a bearish case for the U.S. dollar, it will make a bullish for the Australian and New Zealand dollars.
Dollar to Japanese yen
Tensions in the Middle East have eased, and trade relations between China and the United States have continued to make progress. Also, the market expects the ECB and the federal reserve released their dovish comments on interest rate cuts and will lead the Dow and Nikkei futures up. Technically, USDJPY continues to follow the stock market trend. If Dow futures rise, the USDJPY has an opportunity to test the 108.90 target reference resistance.
U.S. dollar to Canadian dollar
Crude oil prices rose, indirectly more Canadian dollar. Technically, the U.S. dollar could test 1.32 against the Canadian dollar if crude oil prices fall. Instead, it looks as if crude oil prices are rising, with the U.S. dollar trading at 1.30 Canadian dollars. If the Fed releases interest rate cuts, it will be bullish for crude oil prices, and even better for the Canadian dollar. By then, the USDCAD could test the $1.29 level.
United States crude oil futures
The Saudi group joined other Opec members in cutting production, U.S. API crude inventories fell as expected, and the U.S. eased sanctions on Turkey, bullish the crude prices. Crude oil prices rose again. But the Brexit deal failed to get a vote in the British parliament to limit the price of crude oil. Yesterday this analysis proposed that in the technical analysis estimates that crude oil prices at the $55 level could be shown the resistance, watch out for the downside risk.
Brexit failed to pass the British parliament, the ECB interest rate cut, the federal reserve will soon hold a meeting. The expectation that the Fed would cut interest rates and money flowed into the gold market, causing gold prices to rise. In the short term, due to the observation of interest rates, it is worth watching and referring to the Dow futures movements and movements in line with the direction of the gold price. If interest rate cuts expected, Dow futures rose, followed by gold prices. If there is dovish commentary in ECB monetary policy decision, gold could rise, testing $1,500.
U.S. Dow Jones industrial average futures US30
Dow futures failed to break through 27,000 points after U.S. economic data was unable to grow as expected. At present, the primary support for the stock market rise; the first is the success of China and US trade deals. The second is that the federal reserve may cut interest rates. Expect these points could support the Dow futures move higher. Technically, if Dow futures maintain support above 26660, it could keep Dow futures bullish.
7885/ 8050 resistance
7255 / 7100 support
As the US economic slowdown, FOMC would consider cut the Fed fund rate. It is supposed bullish for cryptocurrencies, such as Bitcoin and other popular cryptocurrencies. Technically, the bitcoin price failed to support at US7885. It would test US7255 or US7100. If FOMC and ECB would cut interest rate, bitcoin price could rebound.
Enjoy trading! The content is for reference only. Please do ensure that you understand the risk.
Information provided by AT Global Market, Chief Analyst of Asia Pacific: Martin Lam
Registered Australian Accountant/ Certified Professional Manager / Certified Financial Advisor Experienced Investor / Media Market Commentator Martin Lam has Over 17 years’ experience in global investment market. Familiar with the worldwide stock indices, precious metals such Gold and Silver, Crude oil and Forex. He operated Martin Currency Trading Company and had partnership with a number of well-known international financial corporations and institutions. Before he join ATFX, he was TeleTrade Greater China development and Sales Director. Mr. Lam attends Hong Kong Now TV and China CCTV finance channel once a week. He also had regularly invited by different media, such as DBC Digital Financial Channel, Hong Kong Economic Times, The Standard, Ming Pao to share his experience to trade in Forex, Precious metals, Crude oil and worldwide stock indices.
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