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ATFX Market Update - 2019.07.01


Personal opinions today:

The leaders of China and the United States met at the G20 summit in Japan last weekend. The leaders confirmed arrange the next round of China and US trade consultation. The US President has asked to suspend the extra tariffs for the remaining goods that are going to be imported to the market, so as to ease the tension between the two countries and improve the investment sentiment. U.S. Dow futures, Chinese and Japanese stocks opened higher, indirectly pushing down gold prices and the yen. Since the trade war between China and the United States trade talks, the bullish the price of the yuan, commodity currencies and commodity prices, such as industrial metals and crude oil.

Today release the Europe and the United States their final manufacturing PMI, while the Eurozone and Germany report unemployment rate. The Australian federal reserve bank of Australia (RBA) will cut interest rates by a quarter of a percentage point tomorrow, with the market betting against the Australian dollar. After that, the next focus on U.S. job data this week. The U.S. ADP payrolls as important on Wednesday.

[Important financial data and events]

09:45 China Caixin manufacturing PMI for June
14:30 Switzerland actual retail sales rate for May
15:50 French manufacturing PMI for June
15:55 German manufacturing PMI for June
15:55 German unemployment rate for June
16:00 Eurozone manufacturing PMI for June
16:30 UK Bank of England mortgage lending permit for May
16:30 UK manufacturing PMI for June
17:00 Eurozone unemployment rate for May
20:00 opening ceremony of the 176th OPEC
21:45 U.S. Markit manufacturing PMI for June
22:00 U.S. ISM manufacturing PMI for June
23:00 press conference of the 176th Opec general assembly

Today suggestion:

1.1385/1.1405 resistance
1.1345/1.1325 support
The Eurozone manufacturing PMI for June and the unemployment rate are likely to be negative for the euro ahead of expected slower growth than the previous reading. Then, looking at the U.S. manufacturing PMI data in June, the market expected a slowdown, estimated before the release, bearish dollar, bullish euro. Technically, the euro short-term support is expected at 1.1345 and 1.1325. If U.S. economic data is weak, the euro could test resistance to 1.1385 or 1.1405.

1.2700/1.2720 resistance
1.2675/1.2655 support
U.K. faces a huge risk of a hard brexit without a deal, with British pound weak. The UK manufacturing PMI for June and the US manufacturing PMI for June, release today. The market expects the manufacturing PMI to be weak in both countries, with the U.S. manufacturing PMI showing weakness than the UK's, so there are opportunities to gain British pound. Technically, short-term GBPUSD technical resistance recommendations 1.2700 and 1.2720. Short-term support at 1.2675 and 1.2655. The euro is currently trading between 0.8920 and 0.8975 against British pound. Should the pound fall further, the EURGBP could test 0.9000.

0.7020/0.7050 resistance
0.6985/0.6960 support
At the G20 summit over the weekend, the leaders of China and the United States met and confirmed the formal resumption of trade talks and the suspension of the rest of the plans to impose tariffs on imports from China. However, the RBA interest rate decision tomorrow, the market is expected to cut 0.25%, change the Australian dollar investment sentiment, the Australian dollar fall. Technically, the Australian dollar has failed to break through 0.7050 and 0.7070 after rising to a high of 0.7020 in early June. By the RBA interest rate cut opportunity, AUDUSD short term adjustment. The proposed support bit is 0.6985 or 0.6960. Generally, the trend of the NZDUSD to follow the direction of the AUDUSD, is worth watching.

108.00/107.75 support
108.50/108.75 resistance
At the end of the weekend, the leaders of the G20, China and the United States agreed to cooperate and resume trade negotiations. The US President suspended tariffs on the rest of China's imports, and the Nikkei and China A50 index opened higher amid strong investment sentiment. The dollar rose against the yen, trading as high as 108.50 in early Asia trading hours today. At present, the USDJPY trend, continue to follow the performance of the stock market and safe-haven flows. The dollar could rise further against the yen if estimates of a month-on-month rise in U.S. jobs data this week boost the dow and Asian stocks. Technically, the dollar is expected to follow the Dow and Nikkei. Currently the expected support bits are first referenced at 108.00 and 107.75.

1.3070/1.3055 support
1.3135/1.3150 resistance
U.S. crude oil prices are near $60, bullish the Canadian dollars. After the meeting between Chinese leader and US presidents, the relations improved, they planned to restart the trade consultation meeting, and agreed to promote the economy and suspend the imposition of new additional tariffs, which increased the price of crude oil and indirectly increased the Canadian dollar. If crude oil prices further boost, bullish the Canadian dollar. Technically, the USDCAD may break through 1.3055 support. On the contrary, a fall in crude oil prices would likely be negative for the Canadian dollar, with the first target of 1.3150 resistance.

Us crude oil futures USOIL
59.70/60.50 resistance
57.75/56.85 support
Before the U.S. market closed on Friday, crude oil futures adjusted 23.6% to $57.76 on concerns about the resumption of trade talks between the United States and China, as well as concerns about oil demand and oversupply. Finally, crude oil prices got a boost from the weekend's positive news on China and US trade relations. Furthermore, the OPEC released the cut production plan, boost the crude oil price. Technically, $59.70 is near a one-month high, a current resistance. Crude oil futures could fall if there is no further good news or negative news from the trade talks. Crude oils prices could also fall as the U.S. and Iran tensions cool down. If crude oil price go down, the initial target is $57.75 or $56.85.

1401/1411 resistance
1384/1374 support
Federal reserve chairman Powell said the Fed rate cut was not as high as expected by the market, the first wave of gold price adjustment. The second wave hit the adjustment of gold price after Chinese and US leaders decided to resume negotiations and risk aversion cooled. With the the good news of China and US trade relationship, the gold price broke 1400 support in the Asian market today, having seen US1384, US27 gaps from last week's closing price. At present, the market is waiting to see the European market trading attitude, suggest first observe and then look forward to market sentiment. A weak expected the U.S. manufacturing PMI for June, release today. If weaker than expected, boost gold prices. On the contrary, gold prices fall.

U.S. Dow Jones industrial average futures US30
26905/27150 resistance
26680/26635 support
China-US trade consultations reopening and the US suspended new tariffs on China. Good news, to boost the investment climate. Dow futures were up in Asian trading. Driven by good news, the Dow broke through technical resistance 26759. If the trade talks can make better progress, bullish Dow and test 26905 or 27150 resistance. But today, the U.S. release the manufacturing PMI in Jun which is expected to be weak, and the Dow is likely to test lower, references support 26680 and 26635. On the contrary, 26905 or 27150 resistance.

11600 / 12350 resistance
10350 / 10050 support
China and U.S. trade talk planned reopening soon. Bullish US dollar, bearish bitcoin. Technically, the bitcoin sentiment following the gold price. If the gold price go down further, the bitcoin price probably go down as well.

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.

Legal: 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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