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ATFX Market Outlook, 2019 June 26
Personal opinions today:
US President Trump said the federal reserve should cut interest rates by half a percent in July and total one percent in the this year to boost the U.S. economy and prevent a slowdown from a trade war. The dollar has fallen and gold prices have risen, by Trump's comments. European currencies and other commodity currencies generally posted gains. Last night, Fed chairman Powell made it clear that the Fed is independent of politics and Washington policy. More clearly explains, if the U.S. economy, employment market and inflation slowdown, it will clearly consider cutting interest rates. He said the current U.S. economy does not require a half-percent interest rate cut. Only 0.25% cut in interest rates is enough to keep US growth and stable, even US inflation below 2 %. Gold prices rallied yesterday, falling to $1,415, after comments soothed fears that the federal reserve had cut interest rates too much. The dollar rose and against all major currencies and precious metals.
In addition, U.S. durable goods orders data in May are expected to rise sharply, compare with last month. And tomorrow, the United States will release its final estimate of first-quarter real GDP, which stands at 3.1 %. Believe that in the data forecast rise, the dollar can keep rising. In line with the Fed comments, European and commodity currencies are likely to limit gains and have room to fall.
[Important financial data and events]
14:00 German Gfk consumer confidence index for July
16:00 Swiss ZEW investor confidence index for Jun
17:15 Bank of England inflation report hearing in May
20:30 US durable goods orders in May
22:30 EIA crude oil stocks change
The federal reserve's monetary policy statement hinted at interest rate cuts in the second half of the year. The US President Trump has said the fed should cut interest rates by 0.5% in July. The Fed chairman explained last night. The Fed just consider to cut 0.25% interest rates which enough to against market risks. In addition, U.S. durable goods orders and real GDP growth in the first quarter were expected to increase and stabilize respectively, with the dollar rising and the euro falling. In line with expectations of yesterday's analysis, the euro fell. Technically, the euro hour chart shows forward resistance at 1.1345, which is the first time the EURUSD adjustment has shown support. If EURUSD fall further, you can note from June 18 till yesterday high and low adjustment ratio. 38.2% was adjusted to 1.1325 support. If 50%, would adjust to 1.1295.
The Fed chairman commentary cooled US President Trump speech. The dollar rebounded and British pound fell. Meanwhile, UK faces a big risk of a hard brexit in the third round of conservative party leadership election tomorrow, with the news that hard brexit supporter Johnson is leading. The dollar has risen while the British pound has fallen sharply. It was down over 100 pips from yesterday to around 1.2680. Technically, GBPUSD continues to limit significant resistance at 1.2755 and has been tested at or below 1.2690. Further see the extension of the adjustment range, the target is 1.2640 and 1.2610 respectively. The Euro is likely to test 08970 against sterling, with further tests of 0.9000.
Comments by the Fed chairman, cool down the US President's remarks the day before. The Fed chairman said the federal reserve did not need to cut interest rates by 0.5%, the dollar rose and the Australian dollar fell. The U.S. dollar has a chance to rise and the Australian dollar has fallen on expectations of good U.S. economic data over the next two days. In addition, markets are waiting to see if China and the United States can resume trade talks at G20 leader summit this weekend. Before the results, the Australian dollar was limited against the us dollar. Technically, the AUDUSD resistance 0.6975 and 0.6990. Support bits are currently focused on 0.6940 and 0.6925. The AUDUSD trend, generally indirectly lead the NZDUSD trend. Normally, the NZDUSD follows the AUDUSD. Take note when investing in the NZ dollar.
The dollar rose against the yen as comments from the federal reserve chairman cooled the US President's comments yesterday. In addition, the market is looking forward to the resumption of China and US trade talks, but Chinese sources said that no progress has been made in the talks with the United States, which failed to boost the investment sentiment and boost the stock market. To estimate short-term fluctuations, refer to key support at 106.85 to resistance at 107.45. If the Dow and Nikkei rise, the dollar could try resistance of 107.70 and 107.85 against the yen.
U.S. crude oil prices hit a resistance of $58 as U.S. crude stocks change fell sharply. The Fed chairman said there was no need to overestimate the rate cut. The dollar rose, limiting the rise of the Canadian dollar. At present, the market is waiting to see whether the China and US trade consultation meeting. If the talks go well, boosting crude oil prices could boost CAD. Instead, trade talks have stalled, with no good news. The price of crude oil fall, bearish the Canadian dollar. Technically, USDCAD 1.3235 is an important resistance level.
Us crude oil futures USOIL
U.S. API crude stocks change have fallen sharply, with crude futures trading at $59. The China and US trade consultation is expected to start at the summit this weekend. That, combined with the fed's plan to consider a rate cut in the second half of the year, could boost oil prices. Technically, $59.70 was a one-month high. If there is no good news or negative news, oil futures could fall, with an initial target of $56.80.
As noted yesterday, the Fed is considering a rate cut, and the US President urged the Fed should cut rates by 0.5% in July. The rate cut was larger and longer than expected, boosting gold prices. Speculative entered the market yesterday, lifting the price of gold to near US1439. Comments by the federal reserve, easing interest rate cut expectations of 0.5%, gold price rise limit and deeply adjustment. In line with yesterday's expectations, it is recommended to maintain close attention during US trading session yesterday. The gold fell nearly $27 in when the Fed chairman speech in US trading hours. Current adjustment calculations, technical level reference 1421 and 1425 resistance, 1400 and 1394 support.
U.S. Dow Jones industrial average futures US30
The market waited to see the reopening of China and US trade talks and US durable goods orders data today. Besides, the bearish Dow news indicated that China could not compromise the U.S. government's negotiating demands and the Fed chairman expected rate cut limited at 0.25% only. Technically, the Dow failed to break through the resistance of 27000, reached the first expected support 26515. If the China and US trade talks fail to make any progress, or fail, the Dow could break through 26395, with a further to 26000.
11300 / 11550 resistance
10850 / 10550 support
The market expected Fed fund rate will cut in the second half year, bullish the bitcoin. However, we must keep watching the China and U.S. trade talk and meet at G20 leader summit this Friday. Now, The US-China trade talks restart, it would be bearish the Bitcoin. Now, we suggest following the gold price’s trend to catch up the market sentiment.
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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