ATFX Market Update - 2019.12.13

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ATFX Market Outlook, 2019 Dec 13

Personal opinions today:

Signs of easing in market risk events led to excitement in financial markets. After a meeting with us trade officials last night, US President agreed to suspend the imposition of additional tariffs on $150bn worth of China imports and to consider halving the additional tariffs already in place. The news boosted investment markets, with Dow futures hitting a recent closing high and crude oil trading above $59. Gold and the yen fell as risk aversion cooled. The China renminbi, the Australian dollar and the New Zealand dollar rose as trade sentiment eased. In addition, after the polls closed in the UK general election, a preliminary survey estimated that the conservative party won a most of seats, which will help the conservative party lead Britain to leave Europe smoothly and reduce the downside risks to the UK economy. But the European central bank's continued monetary easing measures, which are expected to slow next year, are likely to expand and limit the Euro’s gains.

European trading hours today, we are watching the results of Britain's parliamentary election today to finalise whether the conservatives will win a majority of seats. In the evening, the US President officially announced the suspension of additional tariffs and related policies on imports from China. If it holds, Dow futures could keep rising, bullish on crude oil and bearish on gold and silver. For other currencies against the dollar, the good news is expected to be followed by moderating gains and a downward. On the data front, U.S. retail sales for November were most of concern tonight. The growth is widely expected and the dollar is bullish before release.

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

Results of the UK general election to be decided ***
U.S. trade representative announces trade tariff policy ***
21:30 U.S. Retail sales ***
23:00 U.S. Business inventories **
24:00 Fed Williams remarks ***

EURUSD
1.1185/1.1195 resistance
1.1125/1.1115 support
The European central bank announced a continuation of its current easing policy, which is expected to stabilize the economy next year. In order to strengthen economic momentum, the ECB plans further easing policy, which is expected to provide opportunities for the Euro to go down against the dollar. At present, the Euro is rising, mainly because of the British general election. The conservative party is expected to win control seats and lead Britain to leave the European Union in an orderly way, which will increase the pound and benefit the Euro indirectly. It is believed that the UK and the Eurozone will face different challenges after the outcome of the election, and the Euro may adjust its recent gains. If the reference resistance 1.1195 break fails, be careful to reverse.

Pound to dollar
1.3480/1.3500 resistance
1.3385/1.3355 support
The official results of Britain's general election are expected to close this afternoon. If the conservatives win more than 358 seats, try the pound at 1.35. If the conservatives get less than 358 seats, the pound could fall sharply. Trading caution is recommended in the risk sentiment and election results drive travel. If the reference resistance 1.3500 break fails, note the trend reversal.

Australian dollar to dollar
0.6940/0.6950 resistance
0.6865/0.6855 support
The US President may suspend the imposition of additional tariffs on China imports scheduled to begin on Sunday. The Australian dollar rose on the bullish news last night. If formally implemented by the weekend, the Australian dollar is expected to maintain gains. However, it is recommended that the technical analysis, the Australian dollar downside risk, pay attention to the 0.6950 resistance. Break failed, trend reversed.

Dollar to yen
109.85/110.00 resistance
109.15/109.00 support
Dow futures rose and the dollar extended gains against the yen as the U.S. President discussed holding off on additional tariffs on China goods and the prospect of a British election helped smooth the Brexit. The technical advice is to look for U.S. Dow futures (US30) and Nikkei futures index (JPN225) as references to see if the dollar/yen can move above 110.00.

USDCAD
1.3200/1.3215 resistance
1.3130/1.3115 support
Crude oil prices rose as trade eased. Canada has a trade deal with the United States, bullish the Canadian dollar. If the U.S. government trade department formally extends the additional tariffs on China, which would help the Canadian economy and oil prices, it could further bullish the Canadian dollar. The U.S. dollar is expected to test below $1.31 against the Canadian dollar.

US crude oil futures
59.85/60.05 resistance
58.25/58.00 support
The U.S. government, trade department decision to suspend additional tariffs on China imports, as revealed by the U.S. President last night, and the federal reserve's interest rate setting outlook for the economy could help lift crude oil prices. But in the absence of good news on trade deals, crude prices could adjust. Short - term $58 led important support.

Gold
1474/1476 resistance
1456/1454 support
The UK general election is over and the result is due in the afternoon. If the conservative party becomes the party with the most seats, the UK is expected Brexit without a problem, risk off which is bearish for gold. Also, if the U.S. represent formally announces a delay in requisition tariffs on imports from China, gold prices are expected to move lower. If there are any risk events, gold prices are expected to jump up. Current reference resistance, $1474 and $1476.

U.S. Dow Jones industrial average futures US30
28450/28535 resistance
27975/27895 support
Dow futures rebounded on news that the U.S. government trade department was holding off on imposing a new round of tariffs on China. Technically, if Dow futures upward, watch for significant short-term support at 28210. If the official confirmation message appears, please note 28450 or 28535 for initial resistance.

BTCUSD:
7450/ 7685 resistance
6850/ 6650 support
The federal reserve announced the suspension of interest rate cuts, bearish for Bitcoin price. Only If Dow future fall, it could bullish cryptocurrency and the bitcoin price could rebound.

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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