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ATFX Market Outlook, 2019 Oct 11
Personal opinions today:
China and US trade talks opened. China and the United States improved relations, investment sentiment improved, risk aversion cooled. Dow futures rose, testing early of the month highs. Demand for gold and the yen fell, the price of silver followed the price of gold, which also fell.
However, now we saw the trade relations improved, but failed to support the dollar appreciations. As the U.S. reported the consumer prices in September as fell, the market is thinking the Fed would cut interest rates by 25 percentage points. The chance to move up to 78%. The dollar fell, creating a rise in European currencies and commodity currencies rose. Besides, the Saudi crude oil organisation and OPEC plan to cut production to stabilise oil prices and prepare for the listing of Saudi Aramco, China and US trade negotiations are expected to progress well. Crude oil rebounded from its low last night, hit $54 after highs earlier this month.
European markets opened today, with Germany's final monthly CPI reading for September followed by the IEA's monthly oil market report. U.S. markets opened with an eye on the September import price index and the Michigan consumer confidence index for October. Prior to the release of the data, the trend of relevant currencies will be based on market expectations. In addition, as the 13th round of China and US trade talks in the second day. If trade talks going well, dow futures rose then gold prices and the yen fell.
[Important financial data and events]
Note: * is the degree of importance
14:00 Germany monthly CPI data for September ***
16:00 China M2 money supply annualized in September **
16:00 IEA releases monthly oil market report **
20:30 US import price index for September **
22:00 US Michigan consumer confidence index ***
The next day 01:15 Federal reserve chairman spoke **
The ECB minutes and German economic data did not surprise the markets, but the Euro got a boost from U.S. consumer prices drop in September and speculation that the federal reserve would cut interest rates. Today European markets opened, Germany released the final September CPI rate. If the outcome is weak and less than expected, the Euro correction could be deeply. In addition, the progress of China and US trade talks is also the key to the trend of the dollar and the Euro. On a fundamental, European economic data don't have much reason to bullish the Euro. But a stronger pound could support the Euro rise that indirectly affect the Euro.
Pound to dollar
The British prime minister has negotiated with the European Union, EU will consider a New Deal with the British government or other options for a Brexit with serious problems created. The pound rose sharply. However, the new Brexit deal has been rejected by the EU and the Brexit issue is once again serious, which may still lead to a negative pound. Any time there is a favorable Brexit deal or any event that causes the dollar to fall could bullish pound in the short term, it said yesterday. After yesterday's new UK proposals and the weak US inflation data, pound is likely to test resistance again. Investors would looking the half year earlier high in this moment.
Australian dollar to US dollar
The 13th round of China and US trade talks was formally held, and the market watched and stabilized the trend of the Australian dollar. The Australian and New Zealand dollars remain on the sidelines at a time when U.S. inflation data are weak and trade talks between the U.S. and China have yet to yield real results. If the trade talks succeed, it is expected to bullish Australian and New Zealand dollars.
China and the United States trade talks held, the market to wait and see, investors keep looking forward. While Dow and Nikkei futures rose, the dollar rose above 108 against the yen. If the talks talks fail and Dow and Nikkei futures fall, be aware that the dollar will follow suit against the yen. Assuming that the investment sentiment is good, the dollar would expected to test the early resistance 108.45.
U.S. dollar to Canadian dollar
Crude oil prices rebounded and the dollar fell against the Canadian dollar. In addition, as trade talks and negotiations progressed well. However , the US inflation fell and expected to cut interest rates. USDCAD testing 1.3275 support. If, however, the US and China trade war doesn't get off the ground, the U.S. dollar rises against the Canadian dollar. More important is to see crude oil prices fell, Canadian dollar decline widened.
United States crude oil futures
U.S. economic data for September continued to be weak, and tongshen fell. The trade war between the US and Europe is heating up and demand for crude oil is expected to slow. News that OPEC was planning to cut output and that trade talks between the U.S. and China were progressing well boosted crude futures prices. If the trade talks are successful, oil prices could rise and fall. At the moment the key resistance, 54.05 and 54.55. A breakout could extend to $56, or $52.
Although, US and China trade talks are going well, some smart money is leaving the gold market, inflowing to stock market. Dow futures rose and gold fell. But US both economy and inflation fell in September. If the Fed will cut interest rates, and the dollar would flow back into the gold market. It would believe that with the conclusion of US and China trade consultation and the return of market focus, gold may be pursued.
U.S. Dow Jones industrial average futures US30
Most of US data in the September weak, U.S. inflation also fell in September. Fortunately, trade talks between the U.S. and China going well, investment sentiment improved a bit, and Dow futures recovered losses and rose. Please keep watching, any news from trade talks. If bad news, the investment climate will drop then Dow futures could fall.
8900/ 9200 resistance
8000 / 7885 support
US CPI fell in September. FOMC would consider cut Fed fund rate. Good for crypto currencies. Technically, the bitcoin price support at US7885 is very important. Assuming the bitcoin price as followed the gold price rebounded. The bitcoin price would test 8900 or 9200 resistance
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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