ATFX Market Outlook, 2019 Aug 20
Personal opinions today:
The US trade department officials extended a ban on imports of telecoms equipment maker Huawei, large US companies reported reliable quarterly results and the US President called on the federal reserve to cut interest rates by 100 basis points. The above positive investment climate information, Dow closed more than 200 points higher than the previous day. The stock market sentiment is excellent; the hedge fund returns to the risk markets, the stock market rose, the debt interest rate falls. Gold and the yen fell. Crude oil prices rose as high as $56 yesterday as the US President called for the federal reserve to cut interest rates to boost demand for crude oil and OPEC called for production control. The market is waiting to see how much U.S. API crude oil stocks change, limiting the oil price rise.
This morning, the RBA released the August monetary policy meeting. European markets, Germany July PPI monthly rate and Switzerland July trade account. The UK CBI industrial order in August had a relatively low impact, mainly focusing on Brexit and UK political news and events. U.S. markets focused on new manufacturing orders and inventories in Canada and U.S. retail sales in June, but the data were less critical. The main focus is the performance of the Dow and the remarks of the US President.
[Important financial data and events]
09:30 RBA minutes for August monetary policy meeting
14:00 German PPI and Swiss trade account for July
18:00 UK CBI industrial order for August
20:30 Canada Manufacturing new orders and inventories in June
20:55 U.S. Retail Sales
Next day at 04:30 US API crude oil stocks change
Next day at 04:30 Fed Daley speaks
The Eurozone's June current account and July CPI both fell at monthly and annualised rates yesterday, increasing the chances that European central bank officials have said they plan to start easing policy in September. The Euro failed 1.1105 support after the Eurozone data released. Fortunately, the Fed may cut interest rates, offset by the ECB interest rate cut. The Euro is expected to remain stable in the short term, with support at reference 1.1075 and 1.1060 and resistance at mention 1.1105 and 1.1120.
With expectations of a U.S. recession and the possibility of an 89 % interest rate cut by the federal reserve in September, the dollar's gains were capped against the pound. But the issue of Brexit limited the rise of the pound. With the risks of a hard Brexit expected to increase and economic and political uncertainty, there is an opportunity for the pound to dip lower, suggesting a significant resistance of 1.2200 and a low of 1.2050. Short-term resistance of 1.2155 and 1.2170 is substantial. If GBPUSD breaks the resistance, it can focus on the critical resistance of 1.2200.
The RBA said it had no urgent to cut interest rates after setting a record for the start of the month, bullish the Australian dollar. Australian dollar rebound from 0.6755. Besides, the Australian and New Zealand dollars are expected to get a boost from the federal reserve's interest rate cut and the easing of trade relations between China and the United States. Technically, the Australian dollar is focused on the resistance of 0.6775 and 0.6785. If 0.6785 breaks through, it is expected to explore the critical resistance of 0.6815. Investors in the New Zealand dollar can look to the Australian dollar trend and follow.
By several positive global economic confidence news, the Dow rebounded to close. Earlier improvement in relations between China and the United States has lifted the investment mood, with the dollar rising against the yen in line with the Dow and Nikkei. It needs a more significant reason to boost the stock market, the dollar against the yen to rise. Otherwise, the dollar could fall, and the dollar could follow suit against the yen as the Fed considers rate cuts. Technically, it is estimated that USDJPY continues to trade between 105 and 106, and whether 106.65 and 106.80 resistance is still a critical point. It is recommended to observe the performance of the Dow and Nikkei and explore the dollar-yen trend and volatility.
Canada national economic confidence index has been declining continuously since mid-to-late July. Although the price of crude oil rose yesterday, it was affected by the decline of Canada national economic confidence index, which increased the risk of Canada economy and weakened the Canadian dollar. At present, it is recommended to keep waiting for the resistance of 1.3335 and 1.3350, while looking down for support of 1.3265. Please pay attention to the crude oil price, the US President and the federal reserve official speech, USD index and the crude oil price trend, how affected the Canadian dollar indirectly.
US crude oil futures
The US trade department is delaying the implementation of extra tariffs for some Chinese imports, and extend on Chinese telecommunications companies limitations. The federal reserve may cut interest rates. Watching U.S. API stocks tomorrow and FOMC minutes on Thursday, the market expects crude oil prices to be limited. Also, an increase in interest rate cuts by Fed officials could raise bullish oil prices. First target resistance could $56.55.
The prospect of a recession in the United States has led markets to expect the federal reserve to cut interest rates in September. Stock market volatility, which indirectly affects gold demand and prices, is more interesting to watch ahead of Thursday's FOMC minutes. Yesterday, the US trade department officials extended a ban on Chinese telecommunications companies after eased additional tariffs on some Chinese imports. US treasury yields back to normal, the Dow rose, and gold prices fell. Without further positive news that pushes Dow up today, which could affect bullish gold prices. Technically, $1, 492 and $1, 485 are significant support bits, respectively.
U.S. Dow Jones industrial average futures US30
Yesterday, the US trade department officials extended a ban on Chinese telecommunications companies after eased additional tariffs on some Chinese imports. U.S. Treasury yields back to normal as the Dow rose. Looking at the FOMC minutes, which cited the possibility of the Fed cutting interest rates next month, could bullish to the Dow, but a correction could come first. Any wrong messages from the US President, it could damage relations with China could move the Dow downward. Technically, the Dow is expected to test 26250 resistance. The lower support bits are 25860 and 25705, respectively.
10900 /11230 resistance
10550 / 10250 support
As the trade war between China and the US cool down. Decreasing the cryptocurrencies demands. However, markets are expecting weak U.S. economic data and global growth downtrend. US treasury yields probably upside down again, Fed may cut interest rates in September. It perhaps an excuse to purchase cryptocurrencies for against any risks and interest rate losses. If the sentiment changes, it could be bearish bitcoin and other cryptocurrencies.
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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