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ATFX Market Update - 2019.05.10


Personal opinions today
U.S. and Chinese trade talks open in Washington, markets wait to see what happens. The dow was down nearly 400 points last night, as low as 25,514. Finally, the dow clawed back some of its losses after the U.S. and China said a deal was possible. But the negotiation result is not clear all the time. The US President even threatened to increase the requisition of extra tariffs on Chinese imports of American goods before the meeting. If the United States formally implements the new tariff policy as scheduled, the future market will be fraught with dangers. Global stock market, crude oil prices will face a new round of decline. Gold and the yen will become safe haven funds, led by the rise. On the contrary, progress has been made in sino-us trade talks, the US President has suspended the implementation of new tariffs, and the stock market is expected to reverse course, boosting crude oil prices.

The balance of Britain's merchandise trade account for march, industrial and manufacturing output and Britain's first estimate of gross domestic product at an annual rate in the first quarter were released today, with important implications for sterling. Canada then reported changes in unemployment and employment. At the same time, the U.S. core inflation rate and annual rate in April were reported, and fed officials made speeches, which made the market pay more attention to the performance of U.S. inflation, which deserves attention. If core U.S. inflation rises, that's good for the dollar. Conversely, lower-than-expected core U.S. inflation could be a negative for the dollar. During the us trading session today, the market remained focused on the outcome of the china-us trade negotiations. Any positive or negative news is expected to affect global financial markets. On a positive note, stocks rose and the dollar fell. Instead, negative news could send stocks lower and the dollar higher.

[Important financial data and events to watch]
09:30 Reserve bank of Australia monetary policy statement‬
14:00 Germany Balance of trade and current accounts‬
16:30 U.K. Balance of trade account in March‬
16:30 U.K. industrial and manufacturing output in March‬
16:30 U.K. GDP growth rate in month and annual ‬
20:30 U.S. core inflation rate in April‬
20:30 Canada unemployment rate and employment change‬
20:30 U.S. Fed Bostic speech ‬
22:00 U.S. Fed Williams speech‬
** US-China trade talks

Today's suggestion:
1.1245/1.1260 resistance
1.1180/1.1165 support
Trade Tensions between the United States and China, Asia fund move to the euro, pushed EURUSD hit recent high. But the market expect that core U.S. inflation will be higher than previously and reported today, and the dollar's strength, limited the euro's gains. In addition, the outcome of the US-China trade talks will affect the euro. Whether the euro can become a safe haven for Asian and US funds, pushing up the euro, is the key to the outcome of US-China trade talks today. Technically, the euro/dollar daily chart reference resistance of 1.1260 and reference support of 1.1165. If US-China relations break down, there is an opportunity for money to flow into the euro, which could boost the euro and the Swiss franc. Conversely, the euro and the Swiss franc fell.

1.3040/1.3075 resistance
1.2950/1.2920 support
The British prime minister has expressed that she would step down after the Brexit completed if parliament accepts her suggested Brexit deal. Political issues continue to weigh on the political climate and economic confidence in the UK, with the pound continuing to test below 1.30, having been as low as 1.2965. In addition, the market is expected that US core inflation rate is higher than the previous value, the dollar is strong, the GBPUSD continue the downtrend, below 1.3040 resistance while rebounded. If negative sentiment continues, the GBP could technically fall below $1.2950. Current reference resistance are 1.3040 and 1.3075.

0.7015/0.7035 resistance
0.6965/0.6945 support
RBA monetary policy statement shown cut core prices to 2% growth in 2020. However, the price target is still higher than the RBA interest rate of 1.5%, and the market expect that no need to cut interest rate, which is a positive for the Australian dollar. However, US-China relations remain tense, which may affect Australia's economic outlook, confidence and resource exports, and limit the AUD gains. US-China trade talks will be held again today, and the Australian dollar may fall further if the relationship eventually deteriorates. The trend of the New Zealand dollar will follow the Australian dollar. At present, the Australian dollar is focused on the support of 0.6965, while the New Zealand dollar is focused on the support of 0.6545. But any news in US-China trade talks must be noted.

110.45/110.70 resistance
109.75/109.45 support
The USDJPY rose after the bank of Japan released a summary of its policy meeting, which was negative for the JPY and a boost for the Nikkei index. Trade talks between China and the United States remain tense, with stocks likely to fall, and if the Nikkei falls, the USDJPY could test 109.45 again. On the contrary, any easing of tensions and results from the talks could boost stocks, with the USDJPY targets 110.45 and 110.70. At present, changes in market news dominate the trend of the USDJPY. If it is impossible to track the news, it is recommended to refer to the fluctuations of the U.S. Dow and Nikkei. If the stock market volatility, the USDJPY also volatility.

1.3495/1.3535 resistance
1.3435/1.3405 support
The Canadian dollar was helped yesterday by a rise in crude oil futures and a thaw in US-China trade talks could succeed and moved towards an agreement. Technical trends, the USDCAD around $1.3475, up and down. Crude oil demand is expected to fall if US-China trade talks fail, bearish for the Canadian dollar and could test 1.35 level . On the contrary, if the US-China talks to resolve the impasse, crude oil prices rebound, bullish Canadian dollar. The USDCAD could test $1.3400.

U.S. crude futures USOIL
60.85/60.05 support
62.65/63.25 resistance
Comments from US presidents have often affected US-China tensions, as well as crude oil prices. It looks like last night there was some good news in the trade talks, boosting crude oil prices. But if talks fail today, crude oil futures could fall. Technically, the key support level is $60.85, and a breakout test could be below $60.05 to $58. Please keep an eye on the US-China trade negotiations as a trend and price of the crude oil.

1287/1292 resistance
1282/1277 support
The US-China tase talks become turbulent for global stock market sentiment. Gold prices could rise if relations fail. The gold price reference resistance target $1287. A further break would be $1,292 or $1,295. If tensions between the two countries ease, gold could test support at 1,277. We must keep in mind the content and situation of the China-US negotiations. If you can't track the news, keep check the U.S. Dow and Nikkei volatility.

U.S. Dow Jones industrial average futures US
3026360/26535 resistance
25785/25215 support
Last night, the US President and Chinese officials said the goal of the meeting would be to reach an agreement. Relations between the two countries eased, and U.S. stocks eventually steadied, but that remains to be seen. If the talks fail, and the U.S. President goes ahead with his plan to impose additional tariffs on Chinese imports, the investment climate turns sour and the Dow could fall sharply. In any case, the market is waiting to see the final outcome of today's Chin-US negotiations to confirm where the trend is heading. Technically, resistance at 26360 and 26535, support at 25785 and 25215. Please must pay attention to China-US trade negotiations, and the good or bad news will affect the sharp fluctuations of Dow. It is hoped that during the China-US talks, the US President will resolve the deadlock and boost the stock market before cancelling the implementation of the tariff increase.

6265 / 6450 resistance
6050 / 5900 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 demand increasing. Technically the bitcoin price is expected to test $6265, the price reached. Now, keeps watching the China and U.S. trade talks results. Positive outlook, bearish the price of Bitcoin.

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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