Personal opinions today:
Markets watched the PMI for the U.S. manufacturing and services sectors, which were expected to show a slight increase from the previous month, and expected new home sales rise. If the results are better than expected, the outlook for the durable goods orders and the U.S. second-quarter GDP is stronger. The Fed could delay its rate cut in this end of the month, boosting the dollar. Currently, interest rate futures in the financial market are pricing in a chance of a quarter-point cut at the end of the month at about 78%. Dollar investors generally accept moderate rate cuts, the dollar was supported.
U.K. new prime minister, Johnson finally success took over as prime minister. The new prime minister said that he would officially leave the European Union by the end of October, and the market speculated that it would only be Brexit without an agreement at that time. The British economy would be in trouble. The European central bank (ECB) announced the results of its interest rate meeting on Thursday, and the market estimated that the ECB will resume monetary easing policy in the future, which will be bearish for the euro. The weakness of European currencies has indirectly boosted the dollar. The dollar's rise against other currencies also hit the gold. The lower global economic outlook failed to produce a big rebound in oil prices even as crude stocks unexpectedly fell sharply. Crude oil futures were held back by $57.4 after APl crude oil inventory data was released.
[Important financial data and events]
15:15 French manufacturing PMI for July
15:30 German manufacturing PMI for July
16:00 Eurozone manufacturing PMI for July
21:45 U.S. Markit manufacturing PMI for July
21:45 U.S. Markit service sector PMI for July
22:00 U.S. new homes sale in June
22:30 EIA crude oil inventories change
To be confirm U.K. new prime minister speech
U.S. economic and inflation data were higher than market expectations, with the market pricing in a rate cut of less than 50 basis points, the dollar gains. In addition, the European central bank will announce the monetary policy on Thursday. The market widely believe that the ECB start QE policy again, bearish euro. In addition, the new British prime minister speech, increase the risk of hard Brexit, damage to European economic growth and development, sterling indirectly affected the decline of the euro. At present the euro performance is weak, believes that the short term continues to indirectly affect the Swiss franc trend. Technical institute, after the euro broke through 1.1155, down 1.1125 or 1.1105 support. Or wait for the European central bank to raise interest rates after the euro began to stabilize. Until then, watch the strength of U.S. economic data in this week, indirectly affecting the euro.
The pound is likely to come bearish after Britain announced its new prime minister, Johnson, who supports a hard Brexit. The pound has an opportunity to test the 1.2380 support. The new prime minister will make a formal speech during the European or US trading hours today. The pound could dip to 1.2380 or lower if the new prime minister stresses a no-deal Brexit with the EU after the deadline. If any good statement shown, it’s may looking at 1.2505 resistance.
The dollar rose ahead of U.S. economic data this week. Trade talks between the US and China failed to make progress, risks of a global slowdown increased and industrial metals prices fell, bearish on the Australian dollar. If there is still no progress in the US-China trade talks, the US President will continue his negative comments and technically advise to watch for the downward trend in AUDUSD. Expect the same impact on the trend of the NZ dollar.
The dollar held on to gains as market estimates narrowed the fed's rate cut at the end of the month. Markets are pricing in future rate cuts by the ECB and the Bank of England, and money is flowing to the dollar. US corporate earnings were strong, the Dow rose, Nikkei index rose and the dollar rose against the yen. Technically, it's worth keeping an eye on the Dow and Nikkei. If the index continues to rise, it will lead the dollar to rise against the yen. It is recommended to pay attention to whether 108.45 and 108.60 resistance can break through.
A number of major Canadian economic data have disappointed the market recently, and the outlook for economic growth has slowed, which is bearish for the Canadian dollar. In addition, crude oil futures prices extended the weak trend. Canada has no data this week, and estimates are passive by US data performance. If crude oil prices rise, there are opportunities to boost the Canadian dollar. Weak U.S. economic data could add to the Canadian dollar gain. Refers to the technical, the current estimate on the test wave adjustment 38.2%, the first target 1.3175. Note today's U.S. economic data performance, indirect impact on the Canadian dollar.
US crude oil futures
The lack of progress in US-China trade talks, coupled with often negative criticism from U.S. presidents, is still weighing on oil demand expectations. Crude oil prices are expected to consolidate above $54 if tensions between the US and Iran fail to ease or if supplies fail to be replenished in time. Early next week, the US trade secretary will visit China, and the progress of trade talks will be of great significance to the global economic recovery. If the talks with deal and formally resumed, the price of crude oil is expected to rise. Current technical trend, U.S. crude oil futures 54.90 support above, the trend is expected to test 57.40 or 58.25 resistance.
With the Fed now expected to cut interest rates by only 25 basis points at the end of July, COMEX gold contracts tumbled. Interest-rate futures are pricing in a roughly 78% chance of a quarter-point cut by the fed at the end of the month. The price of gold had fallen to around $1,414. If this week's U.S. economic data is strong and the dollar rises further, gold prices may have more room to adjust. The current recommendation focuses on significant support at $1411 and resistance at $1430.
U.S. Dow Jones industrial average futures US30
US consumer confidence growths, inflation data rose, US corporate earnings beat expectations, bullish Dow. These two weeks, continue to have important corporate earnings release, the stock market would be volatility. Fortunately, the Fed may cut rate next week, which should be consistent with strong corporate earnings and bullish Dow. A stagnant U.S. - China relationship and uncertainty in US-Iran tensions could dampen sentiment and limit Dow gains. US trade secretary could visit China early next week if the trade talks make a good progress. Investment sentiment good and boost global stocks. Now, Dow keep an eye on resistance 27420 and 27610.
10050 / 10150 resistance
9350 / 9000 support
Recently here mentioning, US economy growth over expected. The Fed maybe only cut 25 basic point in this end of month, recover US dollar loss. It is suppose bullish US dollar, bearish bitcoin. Crypto currencies demand declined. If its noise continued, the Fed will cut only 25 basic point as expected in this end of month. US data shown stronger in this week. Yesterday, here assuming the bitcoin probably test US9500. Now, investors should keep watching the US data in this week to compare the market sentiment.
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.
Legal: AT Global Markets Limited (ATGM, registration number 24226 IBC 2017). ATGM is an International Business Company in Saint Vincent and the Grenadines. Registered address is : the Financial Services Centre, Stoney Ground, Kingstown, St.Vincent & the Grenadines.