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ATFX Market Outlook, 2019 September 4
Personal opinions today:
The final reading of the Markit PMI in August was up from the previous reading and expectations, reflecting growth in small and medium-sized enterprises. But the US official ISM manufacturing PMI fell sharply in August, falling below the boom-bust line to 49.1. Yesterday, we noted that if the official U.S. ISM manufacturing PMI for August came in below market expectations of 51, it would be acceptable to the market and would have little impact on the dollar. If it falls below the 50 marks, the effect is enormous. The impact on the U.S. Dow future and the dollar. Dow futures fell more than 200 points in early U.S. trading before the ISM manufacturing PMI came out last night. Hedge equity fund flows into gold and the yen again. The dollar index fell, falling back below 99, while European and commodity currencies rose.
The US ISM manufacturing PMI fell sharply, while Michigan consumer sentiment also fell sharply before. We believe that for the FOMC beige book, U.S. ADP employment change and non-farm payrolls will have a negative impact, the dollar downward. Similarly, estimates for the U.S. Dow, global stocks and crude oil prices are likely to fall. The shift could bullish the gold and the yen. European and commodity currencies are expected to hold for downward.
[Important financial data and events]
Note: * is the degree of importance
09:30 Australia Q2 GDP **
09:45 China Caixin service sector PMI for August
15:55 German services PMI final for August *
16:00 Eurozone services PMI final for August
16:30 UK services PMI for August *
17:00 Eurozone retail sales rate for July **
20:30 US trade account for July ***
22:00 Bank of Canada interest rate decision ***
The next day, 00:30 Fed Bullard spoke *
The next day, 02:00 FOMC beige book ***
The next day, 04:30 US API crude oil inventories change ***
Market expectations of a series of interest-rate cuts and easing monetary policy in ECB meeting next week are bearish for the Euro. In European trading yesterday, the Euro fell to 1.0925, in line with the upper limit of support predicted by this analysis. The Euro 's low rebound came as the U.S. ISM manufacturing PMI sharply fell in August. Technically, the Euro had fallen to a support level of 1.0925 before rebounding. Hoping to take advantage of the dollar's decline, the Euro recovered 1.1015 first resistance, looking to continue to rise. Due to today's release of the U.S. trade account for July and the beige book, the expected wave range is extensive.
US ISM manufacturing PMI fell sharply in August, below the 50-point mark, and the dollar's decline indirectly boosted the pound. While the pound has rebounded more than 100 points from its low, it has traded as high as 1.2105. Faced with the prospect of no-deal Brexit at the end of October. Downside risks remain, the pound has a chance to fall. Technically, pound breaks through rebound wave 38.2%, up to 50% rebound is 1.2135, notice above all at present. In contrast, if it breaks support level 1.2070, may look down at 1.2040 and 1.2005. Due to today's release of the U.S. trade account for July and the beige book, the expected wave range is extensive.
A fall in the dollar boosted the Australian dollar after the RBA remains interested rates. Today, U.S. trade balance for July and the beige book. If the U.S. trade deficit widely and the beige book are likely to reflect the economic recession, bearish the dollar. The Australian dollar is expected to continue rising against the U.S. dollar if the dollar's decline continues ahead of the U.S. announcement. Technically, if the Australian dollar broke 0.6745, then bearish trend again. It may believe that the pattern of the New Zealand dollar to follow the profile of the Australian dollar.
The yen rose after global stocks and bonds fell in August as the US ISM manufacturing PMI fell below the 50-point mark. Believe Dow futures and Nikkei futures trend, continue to dominate the USDJPY. Note US economic data and the fed released beige book, driving global stock market changes, indirectly affect the USDJPY. Besides, the U.S. jobs report over the next two days is likely to be bearish on the stock market, and lead the USDJPY.
The Bank of Canada interest rate decision today, although the market estimates that the BOC interest rate unchanged, the benchmark interest rate at 1.75 percent. It is noteworthy that the interest rate results before the release of Canada July trade account. Canada has recorded a trade surplus for the past two months, its first since 2017, boosting the Canadian dollar. If a trade deficit could push the USDCAD between 1.34 and 1.35. Also, investors are advised to watch the performance of crude oil prices. A fall in the price of crude oil would also be bearish for the Canadian dollar. Technically, the critical current resistance at 1.3350. If any negative news bearish Canadian dollar, this resistance has the chance to break. Please pay attention at U.S. July trade account and the federal reserve released the beige book of economic conditions, expected wave range.
US crude oil futures
A new trade tariffs between the United States and China, with the market predicting a drop in oil demand. Last week's drop in U.S. consumer confidence already foresees yesterday. The expected decline in the August ISM manufacturing PMI, which weighed on crude oil prices. Crude oil prices fell sharply yesterday, broke 53.95 support and falling as low as $52.95. Watching the U.S. trade report for July and the federal reserve's beige book tonight, then focus on U.S. API oil inventories change, could weigh on oil prices. Technically, the short-term resistance reference is 54.55 and 55.05.
Yesterday, this analysis pointed out that the Michigan consumer confidence index fell sharply in August. As a result, the ISM manufacturing PMI fell below the boom-bust line, indirectly boosting gold prices. If the U.S. trade deficit widens today, the U.S. beige book's gloomy outlook could influence August job data for the next two days. Watch for the results of a slew of big data this week, noting that stocks and rising expectations of a Fed rate cut could boost gold prices. The technical resistance is 1552 and 1558, respectively. Support bits indicate 1529.
U.S. Dow Jones industrial average futures US30
The trade tensions between China and the United States. The US President has once again stressed the terms of the trade deal, which has gradually strained the investment sentiment. The trade tariffs upgrade between China, and the United States was announced earlier in early August, followed by a sharp drop in the Michigan consumer confidence index of the in August. The U.S. ISM manufacturing PMI for August was already expected to be weak yesterday. The FOMC Beige book and US August job data will be watched by the market, which is believed to be bearish for the stock market as a whole. Technically, Dow futures resistance of 26535 can be a reference. If the Beige book sounds negative outlook and U.S. job data is weak, Dow futures could significantly fall, please pay attention to dow downside risk.
10850 /11150 resistance
10350 / 10050 support
If trade tensions, bullish the gold price and cryptocurrencies demand. The bitcoin price followed the gold price rose. Yesterday here we mentioned again, the US Michigan consumer sentiment index very bad. U.S. ISM manufacturing PMI is expected to be weak, the bitcoin price upward. That could affect the FOMC monetary policy decision, and it could cut interest rate and could let the bitcoin price rise. Please keep on eyes today, the US balance of trade and the FOMC Beige book outlook.
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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