ATFX Market Update - 2019.11.01

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ATFX Market Outlook, 2019 Nov 1

Personal opinions today:

The U.S. government's October nonfarm payrolls report, released today, was also weak in the wake of the ADP private payrolls report the following night. The current market estimate is just 89,000, well below the previous 136,000 and almost down to 2008 levels. In addition, the number of initial jobless claims rose last night, while the core price index and the Chicago PMI fell in October. Also, after the House of representatives held a full house vote to confirm the impeachment proceedings against U.S. President Trump, investment sentiment was affected, Dow futures fell, and gold, silver and yen rebounded. Crude oil prices fell on these bad news. The above factors, Dow futures fell, driving risk aversion, boosting gold, silver and yen rebound. And the price of crude oil is expected to fall. These all we mentioned yesterday.

In Asian trading today, the main focus of Japan unemployment rate and China Caixin manufacturing PMI results, led the Asia regional index performance. That in turn affected the prices of gold and silver. It also affects the Australian, New Zealand and Canadian dollars. The forecast for us non-farm employment data tonight is expected to be weak, and recent market movements have already been reflected. Therefore, watch out for the reversal of market price trend after the release of the results tonight if the US non-farm payroll is in line with the expected range. If unemployment rate falls and average wages rise, Dow futures and the dollar could rebound immediately. But if it remains weak, the trend could fall before recovering. Other major currencies against the dollar, gold and silver may move up and then down. Expect a rebound unless the U.S. non-farm payrolls data show a larger increase and crude oil prices do not move somuch.

[Important financial data and events]
Note: * is the degree of importance

07:30 Japan unemployment rate *
09:45 China Caixin manufacturing PMI final **
15:30 Swiss October CPI ***
17:30 UK manufacturing PMI in October **
20:30 US non-farm payrolls ***
20:30 US unemployment rate and average wage ***
21:45 US Markit manufacturing PMI final ***
22:00 US ISM manufacturing PMI **
The next day 01:00 Fed Vice Chairman speech *

Today's suggestion:

Euro/dollar
1.1175/1.1185 resistance
1.1135/1.1125 support
The dollar fell in recent days after a weak October ADP payroll and expected weak U.S. non-farm payrolls data tonight. Adding in the Eurozone preliminary CPI annualized rate in October and the Eurozone preliminary GDP annualized rate in the third quarter, the Euro was bullish . If U.S. non-farm payrolls come in below market estimates of 89,000 late tonight, expect the Euro rise after the non-farm payroll, looking at resistance of 1.1175 and 1.1185. Then looking at support levels.

British pound to US dollar
1.2960/1.2970 resistance
1.2880/1.2870 support
The dollar fell in recent days and the pound indirectly rose. If US non-farm payrolls come in below market estimates of 89,000 late tonight, the pound is expected to rise against the dollar after the release of the data, initially looking at resistance of 1.2960 or 1.2970, the most important resistance level of 1.3005. Markets could then digest the data, then raising the Brexit and next month's UK general election, which could push the pound lower.

Australian dollar to US dollar
0.6910/0.6920 resistance
0.6860/0.6850 support
The federal reserve cut interest rates and ADP employment data for October were weak. Estimated US non-farm payroll data before the bearish US dollar, more Australian and New Zealand dollar. The Australian and New Zealand dollars adjusted gains ahead of China's final Caixin manufacturing PMI in October. Bullish AUD could see headwinds if China manufacturing PMI data show growth and expected U.S. non-farm payrolls data are weak. If the above data is in line with expectations, the Australian dollar and New Zealand dollar may test support tonight.

Dollar/yen
108.40/108.50 resistance
107.80/107.70 support
Japan unemployment rate today did not affect the yen's fall, only affected the Nikkei futures fell, thus the dollar fell against the yen. The dollar fell against the Japanese yen, following Dow futures fell, believing it was related to expectations of weak U.S. non-farm payroll data. Dow futures are expected to have a chance of falling, as are the chances that the dollar will continue to follow stocks lower against the yen. Keep on eye out for 107.80 and 107.70 support. If U.S. non-farm payrolls are not as weak as expected, an increase in U.S. average wages could lead to gains in Dow and Nikkei futures, and the dollar could see resistance against the yen.

U.S. dollar to Canadian dollar
1.3180/1.3190 resistance
1.3125/1.3115 support
As the price of crude oil fell, the Canadian dollar fell. If U.S. jobs data is weak and the dollar falls, technically, watch for the dollar to test 1.3125 or 1.3115 support against the Canadian dollar. If crude oil prices rebound, the U.S. dollar could test support against the Canadian dollar.

United States crude oil futures
55.65/56.10 resistance
53.90/53.40 support
U.S. Q3 GDP was weak and crude oil prices are expected to test support before tonight's non-farm payrolls data, with a target of $53. The weak U.S. economic and employment data could then be digested, creating an opportunity for U.S. crude oil futures to rise. Improving trade relations with the U.S. and China, also OPEC production cut could bullish U.S. crude futures prices.

Gold
1518/1520 resistance
1500/1498 support
The market is already pricing in weak U.S. non-farm payroll data, with gold likely to see resistance at $1,518 or $1,520 before the release. But then, if the data meets expectations and average wages rise, gold could test $1,500 support. Believe, silver price follows gold price pace and trend.

U.S. Dow Jones industrial average futures US30
27160/27220 resistance
26890/26785 support
Dow futures fell because the U.S. economic is weak, non-farm payrolls data is not expected well, it must watch the Dow futures correction. The U.S. economy is weak at the moment, but the Fed pace of rate cuts is likely to stop, a bearish move for the Dow. As a short-term factor, Dow futures, 27160 and 27220 as important resistance.

BTCUSD:
9380/ 9950 resistance
8950 / 8750 support
Since US economy slowdown, FOMC Fed fund rate cut. The FOMC mentions the Fed rate may not cut further, bearish for crypto currencies, such as Bitcoin. The bitcoin price fell after the FOMC meeting. Technically if the bitcoin price could test the support at US7885, but the US non-farm payroll forecast and the actual could lower, could catch up the upward in Bitcoin price.

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.

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