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ATFX Market Outlook, 2019 Oct 10
Personal opinions today:
The US President said that the 13th round of trade talks, which starts today, could lead to a consensus and agreement. The U.S. Dow Jones industrial average rose more than 200 points in early trading. Dow futures turned from positive to negative after the trade talks to facing the deal. Besides, the chairman of the federal reserve said in the minutes of the fed's rate-setting meeting that U.S. businesses expected the fed to cut interest rates more, which was not good for the U.S. economic outlook. On the facing of the fed intends to hawkish. Dow futures turned lower after the stock spot market closed, leading Asian stocks lower. Dow futures fell, and gold and silver extended gains, which had risen as high as $1,516 before easing in Asian trading yesterday.
During today's European trading session, watch for the German August trade account and current account, the UK August trade in goods account and UK August industrial and manufacturing output. More notable was the release of minutes from the European central bank's monetary policy meeting. The Euro, the Swiss franc and the pound came downward on expectations of weak European economic data and before the release of the minutes of the ECB's monetary policy meeting.
With the release of the U.S. consumer price index for September and U.S. jobless claims last week, the dollar and dow futures are expected to face downside risks if the data is weaker than expected. More importantly, during today's great day of US-China trade deal, please keep an eye on the progress of the negotiations during the US trading hours. Investors can use Dow futures and gold prices to judge the progress. If so, in line with market estimates, there may be no progress on the agenda and a chance of a breakdown in the talks, leading to a fall in Dow futures and global stocks, a fall in crude oil prices and thus a rise in gold and silver prices, as well as the yen.
[Important financial data and events]
Note: * is the degree of importance
14:00 Germany trade account and current account ***
14:45 French industrial output in August **
16:30 UK trade account for August ***
16:30 UK industrial and manufacturing output in August **
19:30 ECB releases minutes ***
20:30 US September CPI ***
20:30 U.S. jobless claims ***
23:00 OPEC market report **
The next day 03:00 Fed Bullard speaks
Germany trade account and current account for August and France industrial output for August are expected to fall from the previous month. And the European central bank released monetary policy minutes, bearish Euro. European trading session, believe the Euro fails to test 1.0995 resistance. But the Euro is expected to find resistance again after adjusting to facing the weak U.S. inflation data today and a lack of progress in trade talks. Technically, the short-term support level for 1.0940 important support, initial resistance level 1.0995. Of course, the GBPUSD movement may indirectly affect the Euro.
In European trading yesterday, markets expected weak U.S. economic data and a possible Fed rate cut. Combined with the British prime minister's negotiations with the European Union, the pound was as high as 1.2290. But the Brexit new deal to leave the EU has been rejected by the EU. The market believes there is still no success, leading to bearish the pound again. The pound will have a chance to test the 1.21 level. Of course, any time there is a good Brexit deal or any event that causes the dollar to fall, it could be bullish the pound in the short term. Technically, the British pound is likely to find resistance again after adjusting to weak U.S. inflation data and the lack of progress in trade talks.
Australian dollar to US dollar
The 13th round of US-China trade talks today saw the market wait and see, stabilizing the Australian dollar. Besides, the expected weak U.S. inflation data today and the lack of progress in trade talks are likely to lead to a bullish AUDUSD and NZDUSD ahead of the U.S. inflation data. If the trade talks do not make any deal, it is expected to be bearish for the Australian and New Zealand dollars. Technically, if the AUDUSD failed to break 0.6770 resistance, the trend is still bearish.
Although the US-China trade talks opened today, the market still holds the optimistic attitude, and investment sentiment seems increased; unfortunately, the US President negative remarks, Dow futures and Nikkei index futures trend still have downside opportunities. If the trade talks fail today, Dow and Nikkei futures fall, the dollar will follow fall against the yen. Due to trade negotiation, the trend of China A50 also fell along with the trade talks and affected the direction of the dollar against the yen.
U.S. dollar / Canadian dollar
Recently here we pointed out that the international trade tensions, crude oil inventories increased significantly, the oil price trend is uncertain. Crude oil prices continue to fall momentum, cannot find any improvement. With the trade talks uncertainty, the USDCAD is testing 1.3275 support and 1.3355 resistance. If, however, the trade war does not improve or progress is made, the U.S. dollar could rise against the Canadian dollar and the Chinese yuan. More importantly, the Canadian dollar's slide widened on worries about falling oil prices.
US crude oil futures
U.S. economic data for September continued to be weak, and trade talks between China and the United States were on the stage, raising concerns that the negotiations could hit a snagged path that could bearish the crude oil demand and bearish oil futures prices. If the trade talks are successful, then the crude oil prices would rise.
US President speaks, and negative remarks affect the investment sentiment. Dow futures fell yesterday, following a rise in gold. If Dow futures rise, gold prices drop in trade talks today. Conversely, the price of gold rose.
U.S. Dow Jones industrial average futures US30
Dow futures fell yesterday after most of the September data were widely expected, combined with negative comments from the U.S. President and an impact on US.-China trade talks. Dow futures covered the losses and rose sharply after the U.S. President responded positively to trade talks. If there is any negative news about the trade talks, the investment sentiment will drop, Dow futures could fall. Of course, today's expected weak U.S. economic data will limit the rise in Dow futures and more likely test support.
8900/ 9200 resistance
8000 / 7885 support
Technically, the bitcoin price support at US7885 is significant. After fails to test the critical support, then the bitcoin price followed the gold price rebounded. As here mentioned, we are assuming that if the gold price rose, the bitcoin price would follow. At this moment, the bitcoin price tested 8550 resistance. Next, it would test 8900 or 9200 resistance if the US-China trade talks failure.
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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