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ATFX Market Outlook, 2019 Oct 29
Personal opinions today:
The European Union has agreed to a three-month extension for Brexit until January 31 to ease the risk of Brexit. Besides, the U.S. President said he intends to extend exemptions on nearly $34 billion in Chinese imports goods and plans to sign trade agreements with China ahead of time. Investment sentiment rose, with Dow futures closing higher, leading Asian equities higher. Stocks rose as risk aversion improved, while the Japanese yen, gold and silver rose.
Today, the federal reserve formally convened a two-day meeting to announce the results on October 31. The consensus was to cut interest rates by 25 basis points. The private ADP payroll release tomorrow, most of expected to reflect the official non-farm payroll on Friday. Separately, the first estimate of U.S. third-quarter GDP, released tomorrow, is likely to fall to 1.7%, in line with the federal reserve's interest rate cut to 1.75%. It is believed that the release of U.S. ADP private payrolls and the preliminary U.S. third-quarter GDP report could lead to market volatility, with a short-term dollar and dow futures falling until the official U.S. non-farm payrolls results are released. The strength of the U.S. data directly affects the market investment sentiment and risk aversion. Watch out the trend change for gold, silver and the Japanese yen.
[Important financial data and events]
Note: * is the degree of importance
14:45 RBA President Richard Lowe speaks **
15:00 UK Nationwide house price index *
17:30 UK Bank of England mortgage approval **
22:00 US Existing homes sale in September **
22:00 US CB consumer confidence index for October ***
To be confirm, The British House of Commons vote on early general election ***
The next day 4:30 US API crude oil stocks change***
The Euro is believed to be supported if the dollar falls on expectations of weak U.S. economic data. But the Brexit deal still hasn't been approved by the British parliament, which is bearish for the pound and bearish for the Euro amid repeated political positions. Technically, note that British pound will continue to lead the Euro. Also, technically, we focus on the 1.1055 and 1.1040 support zones. Resistance 1.1105 and 1.1120. In the next two days, the British House of Commons voted on the prime minister's motion for an early general election. Any update would affect the direction of the British pound and the Euro.
British pound to dollar
The Brexit deadline pushed to 2020, Jan 31, but divisions in the British parliament over the issue have bearish the pound. The market predicting weak U.S. economic data, the pound is expected to rise against the dollar, but the gains are expected to be limited. The current technical analysis calculates that GBPUSD between 1.2770 support and 1.2865 resistance. In the next two days, the British House of Commons voted on the prime minister's motion for an early general election. Any update, it will affect the trend of the pound.
Australian dollar to US dollar
A China and US trade deal is expected to be signed ahead of schedule, with the U.S. President planning to extend exemptions on additional tariffs on $34 billion in Chinese imports, indirectly bullish the Australian and New Zealand dollars. However, the Fed is expected to announce a rate cut before this period of bearish US dollar, will be expected to be bullish Australian and New Zealand dollar. However, we must pay attention to RBA President David Lowe's speech this afternoon and tomorrow Australia Q3 CPI results. If the RBA President makes dovish comments and data are weak, there is an opportunity to be bearish AUD.
Dollar to Japanese yen
The core consumer price index (CPI) in Tokyo held steady at an annual rate of 0.5 in October, but fell short of market expectations of 0.7%. The bank of Japan is expected to maintain negative interest rates on Thursday, or possibly increase the scale of monetary policy easing, bearish Japanese yen. If the stock market investment atmosphere is good, we can see the USDJPY test 109 level. But the Fed is expected to cut rates by a quarter basis point. Technically, the USDJPY continues to follow the stock market. Now, it may target 109.05 and 109.15 resistance.
U.S. dollar to Canadian dollar
At 4:30 a.m. tomorrow, U.S. API reported last week's crude oil inventory, which is expected to be lower than the previous week, which could boost crude prices and indirectly bullish the Canadian dollar. In addition, tomorrow night the bank of Canada interest rate, the market is unchanged. Above factors, more Canadian dollar. If the fed is expected to cut interest rates, it could still gain more Canadian dollars in the short term. Technically, usd/cad could see a dip to 1.3035 or 1.3025 support, but then the trend could reverse and rebound into the 1.3085 or 1.3095 resistance range.
US crude oil futures
At 4:30 a.m. tomorrow, U.S. API reported last week's crude oil inventory, which is expected to be lower than the previous week, which could bullish crude oil prices. A fed rate cut is also expected to support a rise in crude oil prices. Notice that the news has been reflected in the market for nearly two weeks, pay attention to the adjustment. If the price of crude oil rises to the $57 range or near $58, there could be a deep correction. Target $53.
Brexit deadline could be extended and gold prices fell, possibly breaking through 1496 support, this is our mentions yesterday. Gold prices fell, it is because Brexit extended and trade between China and US trade deal made further progress, citing plans to ease additional tariffs and the deal signed ahead of schedule. If the market expected the U.S. ADP payroll and third-quarter GDP declines and the federal reserve's expected rate cut, money could flow into the gold market, probably bullish gold prices to rise again. Initial resistance if gold breaks above $1,507.
U.S. Dow Jones industrial average futures US30
The market is watching for a possible Fed rate cut by the federal reserve this Thursday early morning, supporting Dow futures rose yesterday. Combined with the US President plan to extend additional tariffs for China import goods, Dow futures rose to 27160. Dow futures in line with technical resistance, looking up 27125 or 27220 range. In preparation for tomorrow, most of U.S. economic data weak forecast, watch Dow futures adjust to test support at 26890 or 26755.
9885/ 10250 resistance
9100 / 8950 support
As US economy slowdown, FOMC would consider cut Fed fund rate. It is supposed bullish for crypto currencies, such as Bitcoin. Technically, if the bitcoin price failed to support at US7885, it would rebound to US9885 or US10250. Keep watching the gold price, catch up the trend in Bitcoin.
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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