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ATFX Market Update - 2019.05.08


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ATFX Market Outlook, 2019 May 8

Personal opinions today

Markets are worried the U.S. government will raise tariffs to 25% on imports from China to U.S. goods on Friday. Dow and global stock fell, money flowed into gold and JPY, which all rose. In addition, the United States is expected to impose tariffs on Chinese imports of U.S. goods in anticipation of the collapse of trade talks between China and the United States this week, and global productivity is expected to decline. Also, crude oil price fell back to $61 again.

While trade talks between the United States and China are set to begin tomorrow, market fears are rising amid threats from the US President. Any news that eased tensions during the talks would boost global stocks and restore the investment climate. On the other hand, if the talks fail and the United States imposes tariffs on Chinese goods on Friday, the market will be tough, with the possibility of a repeat of December last year, global stock market decline. In addition, the price of crude oil is likely to fall, money flow into gold and the JPY. The Chinese RMB, Australian dollar and New Zealand dollar are again facing declines.

[Important financial data and events to watch]
10:00 Reserve Bank of New Zealand monetary decision
10:00 China trade account in April
10:50 China's trade books were denominated in dollars in April
13:45 Swiss unemployment rate in April
14:00 Germany industrial output in March
15:30 UK Halifax house price index in April
19:30 ECB President Mario draghi speaks
20:30 Fed governor, Ben speaks
22:30 U.S. EIA crude oil inventories for the week ended May 3

Today's suggestion:

1.1210/1.1225 resistance
1.1170/1.1155 support
European central bank President Mario draghi speech today Brexit and uncertainties in the trade talks and the failure of the European central bank to ease monetary policy. The euro could fall if Draghi delivers bearish comments and an economic outlook. Conversely, the euro has a chance to break through the near-term resistance of 1.1225. Technically, the EURUSD daily chart reference resistance of 1.1210 and 1.1225. Support are target at 1.1170 and 1.1155. During this period, investors need to keep an eye on the development of China and US trade relations, which could affect the trigger for the fall in the Euro and Swiss franc if it becomes serious.

1.3095/1.3125 resistance
1.3050/1.3020 support
The British prime minister joined with other parties to discuss Brexit, but still keep on the steps, negative impact of Brexit. The GBP fell from 1.31. The Chin and US trade negotiations uncertainty, the dollar rose, the GBO fall. Keep an eye on the trade relations and judge the situation. Technically, the reference resistance level was lowered to 1.3095 and 1.3125. The reference supports keep on eyes to 1.3050 and 1.3020.

0.7025/0.7040 resistance
0.6980/0.6965 support
The Reserve Bank of Australia (RBA) left interest rates unchanged yesterday, in line with market expectations. As the central bank kept interest rates unchanged, AUDUSD rose, as high as 0.7045. But tensions over trade between the United States and China ultimately dragged AUDUSD down. If the Sino-US trade relationship fails, AUDUSD focused on the first support of 0.6965.

110.45/110.70 resistance
110.05/109.80 support
The U.S. Dow and Nikkei fell, respectively, and the dollar fell against the yen after comments from the U.S. President and threats to raise tariffs on Chinese imports. If tensions between China and the US increase and stocks continue to fall, the USDJPY will follow the decline of Dow and Nikkei expands. If the stock market rises, the reference resistance of USDJPY is 110.70. It is suggested to refer to the fluctuation of the Dow and follow the synchronous development. It is estimated that the larger the stock market fluctuation range, the higher the fluctuation range of the USDJPY.

1.3470/1.3495 resistance
1.3405/1.3375 support
Crude oil inventories rose, trade tensions between China and the United States increased, and the dollar rose, against the Canadian dollar. Technical trend, the USDCAD to try resistance level 1.3475. If crude prices fall further, the USDCAD could test near the $1.35 level. If crude oil prices rebound, bullish for the Canadian dollar. USDCAD may test $1.3400 and $1.33 level.

U.S. crude futures USOIL
61.35/60.85 support
62.45/63.25 resistance
Crude oil prices fell as U.S. President's comments weighed on tensions with China. But crude oil prices rebounded after a U.S. oil embargo on Iran tightened supplies. Technically, the key support level is $60.85, and a breakout could test below $59 to $58. On the contrary, any good news from the trade talks could boost crude oil prices. Please keep an eye on the Sino-US trade negotiations and judge the situation.

1287/1295 resistance
1282/1277 support
Sino-US relations tensions, global stock market volatility, money flowing into gold, pushing up the price of the gold. If relations is bad this week, gold prices could rise. Technical reference resistance target 1287. If further up, it may test $1,295. If tensions release, gold could test support at 1,277. But in the end, we must pay attention to the content and situation of the China and US negotiations tomorrow.

U.S. Dow Jones industrial average futures US30
26360/26535 resistance
25785/25215 support
China is scheduled to attend the trade talks tomorrow. But the U.S. President threatened to impose additional tariffs on Chinese imports. The market continues to wait and see the development of Sino-China negotiations. It is expected that, technically, 26360 and 26535 are the important resistance levels at present, with reference to the support levels of 25785 and 25215. The current trend of the Dow, all rely on the trade talks, please pay attention.

5920 / 6100 resistance
5650 / 5500 support
The FOMC keeps the interest rates unchanged. China and U.S. tension, global stock markets fell; Dow still has a chance to decline. The bitcoin price could stay well and rise. Technically the bitcoin price is expected to test $6100, but keeps watching the China and U.S. trade talks.

Enjoy trading! The content is for reference only. Please do ensure that you understand the risk.

Information provided by ATFX, 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.
Contact: cs.gm@atfx.com or wechat: ATFX_China

Legal: ATFX is a trading name of AT Global Markets Limited (ATGM, registration number 24226 IBC 2017). ATGM is an International Business Company in Saint Vincent and the Grenadines. Registered address is : the Financial Services Centre, Stoney Ground, Kingstown, St.Vincent & the Grenadines.

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