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ATFX Market Outlook, 2019 Oct 23
Personal opinions today:
Yesterday, British prime minister Boris Johnson pushed through procedural legislation to save the Brexit deal, which was rejected by the house of Commons, believing the deadline for Brexit at the end of this month would have to be extended. The British parliament is unable to pass the Brexit agreement before the deadline, so it is estimated that there is a great risk that the pound exchange rate will fall. The recent analysis highlighted the UK divorce with EU and expected adjustments in the Euro and pound. Gold and silver prices have rebounded from low levels amid renewed risk aversion caused by the brexit issue and falling stock markets. Gold's rise was capped at $1, 500 by a thaw in trade relations with China. Crude oil prices rose in a number of factors, mainly the United States API crude oil inventory data fell, bullish oil prices.
European central bank (ECB) monetary policy is widely expected to remain unchanged after its President Mario draghi attended his last policy meeting and press conference on Thursday. But the ECB's new President, she will take over on November 1, before the central bank formally restarts its TLTRO . It is looking into the possibility of a big rate cut. Market forecast, this European central bank interest rate meeting, may again put forward the relevant research report. If the European central bank will introduce further interest rate cuts, It would believe that good for the future economy. But as things stand, the euro is expected to come downward before the ECB's rate decision.
[Important financial data and events]
Note: * is the degree of importance
20:30 Canada wholesale sales in August *
21:00 U.S. August FHFA housing price index *
22:30 U.S. EIA crude oil inventory last week **
To be confirm British Parliament discussion for extending Brexit deadline and a second referendum
Brexit failure, bearish for euro. The British prime minister put forward a motion to amend the Brexit legislation to the British parliament, but it was rejected again, which was bearish for the euro. It is believed that the news of Brexit negotiations will continue to affect the pound and indirectly affect the euro. In addition, this week the European central bank monetary policy decisions, bearish sentiment effect, the euro may fall, adjust to 1.10 levels. If the Fed releases interest rate cut remarks, the euro will be bullish, which is likely to try 1.12.
Pound to dollar
The Brexit agreement submitted by the British prime minister to the British parliament has been rejected by the British parliament, which is bearish for the pound and temporarily unable to break through the resistance level of the rally wave 1.3005. If the British parliament again rejects the Brexit deal, seeks a second referendum or the European commission does not give a delay to the Brexit deal, it may lead to a bearish effect on the pound. We suggest you watch pound fluctuations. 1.2840 is the current rebound wave support level, is concerned by the market.
Australian dollar to US dollar
The failure of the Brexit deal by parliament affected investment sentiment, with the US dollar, Australian dollar and New Zealand dollar adjusting gains. Technically, last month's high of 0.6890 will be an important resistance level reference, currently maintain observation, if confirmed breakthrough failure, trend adjustment. On the contrary, if the Fed makes interest rate cut remarks, it will be bearish for the US dollar and bullish for the Australian and New Zealand dollars.
Dollar to yen
The failure of the British parliament to pass a Brexit deal to leave the European Union dampened investment sentiment, limiting the dollar's gains against the yen and also following declines in Dow and Nikkei futures. Technically, the dollar against the yen continues to follow the stock market. USDJPY, 108.90 is the current reference resistance.
U.S. dollar to Canadian dollar
After the Canadian election, the Canadian dollar rose before a day. But the news is pricing in a correction. If the price of crude oil rose, indirectly bullish Canadian dollar. Technically, the U.S. dollar could test 1.32 against the Canadian dollar if crude oil prices fall. Unless, Fed rate cut would be bullish for oil prices and the Canadian dollar. It's worth keeping an eye on.
United States crude oil futures
Saudi crude oil exporters has proposed a joint production cut with other OPEC members. U.S. API crude oil inventories fell as expected, bullish crude oil prices. Crude oil prices posted their biggest gain in two weeks. But the Brexit deal failed to get a vote in the British parliament, which bearish the crude oil prices. Current technical analysis estimates that crude oil prices at $55 initial resistance, watch out for downside risk.
The European central bank (ECB) and the federal reserve (Fed) are due to meet soon after the Brexit deal failed to pass parliament. In the interest rate cut is also expected to rise, venture capital may flow back into the gold market again, let the gold price rise. Technically, it is worth paying attention to and referring to the Dow futures volatility and trend, how to drive the gold price trend and direction. If Dow futures fall, Asian stocks fall and gold falls at different times. Note that after the London market opened, the gold prices may again test resistance in light of the above mentioned data.
U.S. Dow Jones industrial average futures US30
Dow Jones industrial average futures failed to break through 27,000 points after U.S. economic data failed to grow as expected. At present, the main support for the stock market rise, the first is the success of China and US trade negotiations. The second is that the federal reserve may cut interest rates. These two key points are likely to support the Dow futures move higher. Technically, if Dow futures maintain 26660 support, keep bullish Dow futures.
8600/ 8850 resistance
7885 / 7655 support
As US economy slowdown, FOMC would consider cut Fed fund rate. It is supposed bullish for crypto currencies, such as Bitcoin and other popular crypto currencies. After the weekend, the Brexit deal failed, the the crypto market could demand increasing. Technically, the bitcoin price support at US7885. Assuming the bitcoin price as followed the gold price. If FOMC and ECB would cut interest rate, bitcoin price could rise further.
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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