ATFX Market Update - 2019.12.11

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ATFX Market Outlook, 2019 Dec 11

Personal opinions today:

US will release the November core CPI, followed by the federal reserve's FOMC decision and Fed chairman Powell speech at FOMC press conference. Dow futures failed to break 28,000, and the dollar index retreated to 97.4 last night. Although the Fed is widely expected to leave rates unchanged, Fed chairman Powell speech could reveal the outlook for monetary policy next year. It is believed that global stock, currency and commodity markets will fluctuate in response to the comments during Fed chairman Powell comments.

Besides, there are concerns that the United States will impose trade tariffs on Chinese imports this weekend. Meanwhile, the US Congress is set to impeach US President Donald Trump, and gold prices have risen as high as $1,469. After that, the U.S. trade representative signed a U.S.-Mexico-Canada trade agreement with Canada, and the gold price rose eased. Markets are waiting to see whether the United States will impose additional tariffs on Chinese currency imports on Dec. 15. Keep an eye out for Dow futures, gold and the Japanese yen.

[Important financial data and events] note: * is important

21:30 U.S. Core CPI ***
23:30 U.S. EIA crude oil inventories change **
The next day 03:00 FOMC monetary decision **
The next day 03:30 Federal reserve press conference ***

EURUSD
1.1105/1.1115 resistance
1.1055/1.1045 support
The U.S. releases its November consumer price index and federal reserve rate tonight. Tomorrow night, the ECB interest rates decision. The market is assuming that Fed monetary policy will hold rates steady. By contrast, if the ECB continues to extend its easing system. The dollar is expected to perform strongly, and the Euro has an opportunity to fall against the dollar. It could test 1.1105 or 1.1115 resistance, but then, it could reverse to check 1.1045 support or below.

GBPUSD
1.3195/1.3205 resistance
1.3105/1.3095 support
The Fed is expected to hold rates steady until the first quarter of next year, and the dollar will be strong. After the FOMC meeting, there will be the U.K. parliament election. The election period is subject to uncertainty, and pound may fall. Technically, look for near-term resistance to sterling at $1.3170 and $1.3180, with significant resistance at $1.3205. Pound could test a critical support level of $1.3035 if the dollar can stay strong, and the ruling conservative party fails to secure a majority to control parliament. Short-term support bit reference, 1.3105 or 1.3095 support.

AUDUSD
0.6825/0.6835 resistance
0.6780/0.6770 support
Reserve bank of Australia (RBA) chairman said the outlook for the economy in 2020 was still not improving. Australian inflation is likely to be below the central bank's target, and interest rate cuts are expected in the first quarter of next year. Also, trade tariff barriers between the U.S. and Australia's trading partners remain in place, giving the Australian dollar a chance to test its lows against the U.S. dollar. Technically, the AUD could check the 0.6800 first support level against the US dollar, and then have a chance to break through that support and try 0.6780 or 0.6770 support.

Dollar to yen
108.90/109.05 resistance
108.55/108.45 support
Fed was widely expected to leave rates unchanged. Dollar strength, risk aversion did not affect the yen, and the dollar kept a slight rise against the yen. The U.S. President said trade talks with China remain positive but did not say whether he would schedule additional tariffs on China import goods. The mood was cautious, with Dow futures showing no gains, limiting the dollar's gains against the yen. If it can be resolved, the dollar could test the 109 level against the yen.

USDCAD
1.3245/1.3255 resistance
1.3200/1.3190 support
OPEC announced the extension of a production cut agreement. Last night US, Mexico and Canada signed trade deals easing uncertainty over the Canadian dollar. If the next step is for the U.S. government to extend additional tariffs on China, crude oil prices could rise, further strengthening the Canadian dollar. The U.S. dollar is expected to test the 1.31 level against the Canadian dollar. Technically, the first phase support bits are maintained at 1.3200 and 1.3190.

US crude oil futures
59.00/59.25 resistance
58.25/58.00 support
U.S. crude oil inventories rose, and it remains unclear whether the U.S. government will hold off on imposing additional tariffs on China imports, limiting the rise in crude oil prices. For the time being, it is recommended to wait to see Fed rate and Fed chairman Powell’s outlook for the next year. Any news that could boost economic growth would help push up crude prices. In the absence of any good news, the trend will continue to adjust, with 58.00 leading the target support level.

Gold
1469/1471 resistance
1456/1454 support
Gold price caps up and down as markets watch for Fed rate and monetary policy tomorrow. It is worth keeping an eye on the dow Jones futures trend, master the market reaction, master the gold price trend. Technically, if gold doesn't break the $1454 support level, it could test US1469 or US1471 resistance. Overall, gold's gains will be limited if the Fed keeps rates on hold and has the opportunity to do so for some time.

U.S. Dow Jones industrial average futures US30
28015/28210 resistance
27620/27540 support
The lack of new progress in trade talks and looming economic concerns limit the scope for Dow futures to rebound and make correction more likely. Besides, worries about the U.S. President criticising the Fed monetary policy have led to volatility in Dow futures. Technically, 27620 is a significant support level in the first phase of a Dow futures correction. Significant resistance notes the November high 28210 resistance.

BTCUSD:
7750/ 7885 resistance
7150/ 7050 support
Before the end of the year, the cryptocurrency demand still declines, bearish Bitcoin price and limited US7885 resistance. If Dow future fell, it could bullish cryptocurrency and the bitcoin price could rebound. Technically, it would be looking at US7150 or US7050 support in the short term.

Enjoy trading! The content is for reference only. Please do ensure that you understand the risk.

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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