Personal opinions today:
The ECB has announced kept the interest rates and all monetary policies unchanged. ECB no monetary easing and dovish talk, the euro rose. Unfortunately, the euro was indirectly affected by the negative news that Britain may face a hard Brexit. EURUSD met resistance at 1.1186 and reversed. In gold market, no dovish talk from the European central bank then the gold prices fell.
Markets are watching the US second-quarter real GDP, and this data will be important for FOMC meeting next week. If the first estimate of US real GDP fell and the result was less than 1.7%, the fed would have to consider cutting rates by 50 basis points, 25 basis points above market expectations. So calculate, interest rate futures market would volatility and affected the dollar. If the dollar dropped, boost to gold would also lift other major currencies against the dollar. Watch tonight the US real GDP and extend the dollar trends early next week.
[Important financial data and events]
14:00 German import price index for June
14:45 French producer price index for June
16:00 Italian consumer and manufacturing confidence in July
18:30 Russian central bank interest rate decision
20:30 U.S. real GDP in the second quarter
20:30 U.S. core PCE price index
20:30 U.S. real personal consumption expenditure
Yesterday this analysis pointed out that the market has been prepared for the ECB monetary policy easing, and the ECB did not start the monetary policy of QE. After the meeting, the euro had tested a resistance range of 1.1175 to 1.1190. Today's figures from Germany, France and Italy could be indicators of growth in the euro zone. In addition, the Russian central bank interest rate decision, believed to have an indirect impact on the euro. If Russia's central bank cuts interest rates by just 25 basis points, it could rally the euro. In the evening, the US real GDP for the second quarter showed a bigger drop than the market expected by 1.8 percent. The dollar could fall. On the contrary, GDP is higher than market expectations, which is bearish for the euro.
Now British MPS say there is some doubt that the UK can reach an agreement with the EU before the deadline, and that it is most likely that it will not sign a break agreement with the EU. The pound will under pressure if the UK attempts to reverse the previous agreement, with the pound having an opportunity to dip to support 1.2380 or below. The U.S. second-quarter real GDP also affected the pound. Technically, the pound is likely to test resistance at 1.2505. But the U.S. real GDP in the second quarter was still strong, and pound could dip to 1.2385 support.
The Australian dollar lost 0.6955 to support as the market waited to see the U.S. GDP data for the second quarter. Today's GDP results are awaited. In addition, the US-China trade talks will be held in Shanghai next week. If progress well, the US President does not make any negative comments, it is expected that AUDUSD up. Also expect that indirectly impact of the New Zealand dollar.
The Nikkei index rose, leading the USDJPY follow the trends. The market is waiting for the US second quarter real GDP to beat expectations. If the Dow is positive, the Nikkei is likely to keep rising. Technically, the Nikkei index continued to rise, leading the USDJPY to break through the resistance of 108.60 yen. The China-US trade talks next week, the stock market will rise and the USDJPY will test 109 levels.
No Canadian data were released during the week, and estimates were influenced indirectly by the dollar and crude oil prices. Weak U.S. economic data could add to the Canadian dollar gain. Otherwise, expect the Canadian dollar to fall. The current technical analysis estimates that the adjustment wave head is 1.3175 or 1.3205. Note today's U.S. second-quarter real GDP results and crude oil price reaction, indirect impact on the Canadian dollar.
US crude oil futures
Crude oil futures fell as markets were disappointed by the European central bank no start quantitative easing. Next week's US-China trade talks in Shanghai, China, are expected to a good news. Technically, crude oil prices are expected to consolidate above $54. The U.S. trade secretary's official visit to China early next week is expected to lead to progress and boost crude oil prices. Today we watching the second-quarter U.S. GDP. If it’s rise 1.9 percent above the top end of market forecasts could boost oil futures. In technical terms, U.S. crude oil futures are expected to remain above support at 54.85 and are expected to test resistance again at 57.15.
The ECB no monetary policy easing has failed to lift gold prices. Today, the market focus on the U.S. GDP for the second quarter is key to market sentiment . Gold prices could rebound if the U.S. GDP falls 1.8 % or below the expectations, undermining the dollar and giving the fed more room to cut interest rates. Otherwise, gold prices are expected to have limited upside and have the opportunity to break through the 1411 support level. The current recommendation focuses on significant support at $1411 and resistance at $1430.
U.S. Dow Jones industrial average futures US30
The Dow was bullish despite U.S. corporate earnings beating expectations. However, the Dow was weak because the market estimate of U.S. GDP fell to 1.8 percent in the second quarter. A better-than-expected reading on second-quarter U.S. GDP, it could revive the investment climate and boost stocks. Next week, U.S. and China trade talks, probably improved investment sentiment. Currently, keep an eye on technical support 27090 and 27010, and resistance levels for reference 27345 and 27420.
10150 / 10750 resistance
9650 / 9200 support
US economy growth over expected. But today, the market focus on the US real GDP result. If the number below 1.8% expected, The Fed maybe not only cut 25 basic point in this end of month then US dollar would loss. It is suppose bearish US dollar, bullish bitcoin. Now suggestion, investors should keep watching the US data in this week to compare the market sentiment. The gold price volatility also affected the bitcoin price.
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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