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ATFX Market Outlook, 2019 Nov 20
Personal opinions today:
US President Donald trump believes the federal reserve should cut interest rates further to promote rapid economic growth. Fed officials responded the current rates were appropriate. But federal regional officials said they were looking at a possible slowdown in U.S. consumption and retail sales in the fourth quarter, suggesting a rate cut was possible. The dollar index fell on the comments. In addition, the US President pressed lawmakers on international trade, urging congress to pass the US-Mexico-Canada trade agreement as soon as possible to improve the investment climate. Dow futures reversed course and the Dow closed down over 100 points. The dollar fell against the Japanese yen, recovering $1,470 in prime time. In addition, crude oil prices fell last week amid a sharp increase in U.S. API crude oil inventories and tensions over international trade.
Key data today include German PPI for October and Canada CPI for October. The FOMC minutes at 03:00 tomorrow morning, and the market is waiting to see if there is any possibility of the Fed cutting interest rates. It is expected to be negative for the dollar, bullish for other currencies against the dollar, and bullish for gold and crude oil before the release of the FOMC minutes. But the move could reverse after the announcement.
Note: * refers to the degree of importance
15:00 Germany PPI **
21:30 Canadian CPI ***
23:30 U.S. EIA crude oil inventory last week **
The next day 03:00 FOMC minutes***
1.1090/1. 1100 resistance
The US President criticized the federal reserve for the slow pace of interest rate cuts that stymied the economy. In addition, the market is watching the FOMC minutes, the dollar index fell. In addition, British parliamentary election polls positive, indirectly bullish Euro. The Euro challenged the 1.10 level ahead of the FOMC minutes. Technically, the 1.10 level could limit the Euro’s gains against the dollar.
British pound to dollar
U.K. research that U.K. conservative party has a good chance of winning the general election and could smooth Brexit next year, bullish the pound. On the other hand, the US President mentions the Fed for the slow pace of interest rate cuts, and some Fed officials said they were dovish, bearish for the dollar and positive for pound. Technical, short-term focus on 1.2945 and 1.2980 important resistance. If there is no breakthrough, the trend may adjust, suggest a correction to 1.2820 or below, in line with the GBP/USD trend, may affect other related cross rate.
Australian dollar to US dollar
The reserve bank of Australia's monetary policy record eased market pessimism and boosted Australian dollar investment confidence. Progress in international trade talks could help boost the Australian dollar. The recommendation supports the aussie at 0.67 and then has the opportunity to rebound. The key is the FOMC minutes and the Fed interest cut.
Trade tensions, Japan's trade account turned downward, bearish Japanese yen. But by the US President dovish speech and the Dow futures and the Nikkei stock index futures fell, the dollar fell against the yen to follow movements. For now, the key is the FOMC minutes and the direction of Fed interest rates. If Dow and Nikkei futures rise again, the dollar could find significant resistance against the yen.
U.S. dollar to Canadian dollar
Progress on the US-Canada trade deal was expected to signed in December. Unfortunately, the negotiations continue. In addition, the latest API crude oil inventories increased, if crude oil prices fell, a bearish Canadian dollar. If there is no good news on the US-Canada trade deal and crude oil prices continue to fall, the USDCAD could break through 1.3300 resistance.
United States crude oil futures
The US President's comments have again sparked controversy over international trade and hurt demand for crude oil. U.S. API crude oil inventories rose sharply, further bearish crude oil prices. Technically, the current international trade negotiations encountered problems, crude oil price adjustment. The original target of $56.75 breakthrough, more breakthrough $55.85 support, now wait and see $54.85 support. If the FOMC minutes record proves dovish, crude oil price could rebound.
Dow futures fell after hitting record highs as U.S. trade talks with the world faltered, the U.S. President took a tough line, venture capital sentiment cooled and risk aversion increased. And may continue to fall, gold prices on the downside opportunities increased. If events do not resolve in the short term, gold can test resistance at $1,480. In addition, if the FOMC minutes showed dovish, gold could rise. Technically, depending on the trend in Dow futures, gold could break through $1,480 resistance if the Dow future trend remains down.
U.S. Dow Jones industrial average futures US30
The US-Mexico-Canada trade deal and the trade deal with China are still under negotiation, but there is no new progress. It is not confirmed whether the agreement with the US can be signed in mid-December, which affects the improvement of the sentiment. China's failed trade talks with the U.S. reversed gains in Dow futures. Currently, the market is watching the minutes of the FOMC and believes that Dow futures are still adjusting for their recent gains ahead of the release. In the near term, this analysis indicates that the technical correction of Dow futures down, will likely test 27830 or 27750 support.
8380/ 8480 resistance
7950/ 7885 support
Technically, the crypto currency demand decreased, the trend bearish Bitcoin price. Now the bitcoin price break US8350 support, looking at US7885 support. However, US President and Fed officials comments, it could cut interest rate. That is good news for crypto currency, the bitcoin price could reverse and uptrend.
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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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