ATFX Market Update - 2020.01.06

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ATFX Market Outlook, 2020 Jan 6

Personal opinions today:

Middle East Iran crisis continues to ferment, market panic mood increasing. Dow futures and Asian stocks such as the Nikkei index fell, while China A50 and Hong Kong Hang Seng HK50 index were also downward. China's A50 index opened 0.3% lower as gold started the session higher, rising above $1,580 to a near seven-year high of $1,587. The yen fell on risk aversion and equity markets, hitting as low as 107.76 to the dollar. U.S. oil and Saudi Arabia rose as crude supplies were affected by U.S. President move to impose sanctions on Iran in response to tensions in the Middle East.

In European trading today forecasts the Germany and Eurozone services PMI flat, bearish Euro and pound. With tension in the Middle East, European currencies are more likely to weaken. Investors expected the U.S. final Markit services PMI will be negative for the Euro and pound. Commodity currencies, the Australian dollar, the New Zealand dollar, and the Canadian dollar are also expected to be weak.

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

09:45 China caixin service sector PMI ***
16:55 Germany final service sector PMI ***
17:00 Eurozone services PMI final **
17:30 Eurozone Sentix investor sentiment index **
17:30 UK service sector PMI ***
18:00 Eurozone November PPI **
22:45 U.S. Markit services PMI final ***

EURUSD
1.1185/1.1195 resistance
1.1135/1.1125 support
The technical direction of the EURUSD continued to downward, having traded as low as 1.1125 on last Friday. Today, the market is focused on afternoon data on Germany and the Eurozone, and wait and see tonight the U.S. ISM PMI for December. Another important topic, it is worth watching whether the situation in the Middle East will escalate and hit European currencies. Technically, the Euro has become an important short-term resistance at 1.1195. If the trend keeps downward, the next EURUSD support is 1.1135 or 1.1125.

Pound to dollar
1.3140/1.3150 resistance
1.3050/1.3040 support
Investors are still waiting to see if the Brexit process goes smoothly at the end of January, staying cautious and continuing to adjust. From the technical analysis, the pound broke through 1.3282 resistance after the trend downward. 1.3050 and 1.3005 are the adjusted wave support bits in the hourly chart and become the reference support bits for falling waves at the present stage.

Australian dollar to dollar
0.6990/0.7010 resistance
0.6945/0.6935 support
The reserve bank of Australia has long said it will cut interest rates at its February monetary decision meeting. Interest rate futures on the investment futures market show a chance of a rate cut of more than 60% in June, a negative for the Australian dollar. Without momentum in Australia and global trade, the Australian dollar is expected to remain limited at 0.7000 and 0.7030. In the AUDUSD hourly chart, the moving average (SMV) drag is expected to extend the downtrend target to 0.6935 or see 0.6885.

Dollar to yen
108.25/108.40 resistance
107.85/107.70 support
Global stock markets fell as geopolitical risks rose, while the dollar traded at 107.76 against the yen, having hit a near two-month low in downside support. If in the mid-term, if the dollar against the yen did not break the upper limit of the range, suggest maintaining low buy high sell. Of course, there are tensions in the Middle East, and if the stock market continues to fall, the support level will push below 107.50, with 107.05 as the key support level.

USDCAD
1.3015/1.3025 resistance
1.2950/1.2940 support
Canada and the United States trade agreement to implement the launch of the Canadian dollar. In addition, crude oil prices continued to be strong, breaking through recent resistance to $64 per barrel, and the USDCAD is expected to test the 1.2940 support level. However, it must be noted that if the price of crude oil adjustment, will affect the future market adjustment, the Canadian dollar fell, the USDCAD rose.

US crude oil futures
64.35/65.00 resistance
62.60/62.25 support
Tensions in the Middle East, where the US President said sanctions against Iran have strained oil supplies, have boosted the price of crude above $64. At present, we must observe the situation in the United States and Iran, remain cautious, and pay attention to the volatility of crude oil prices.

Gold
1587/1589 resistance
1570/1568 support
U.S. and Iran tensions, the price of gold rose. The gold price reached a 7-year high, $1,587. If Dow’s future keeps falling and gold prices rising. It is recommended to keep an eye on Dow and Nikkei futures, keep an eye on the situation and watch for gold price movements. If the situation eases and related indexes rebound, gold prices may adjust to the rise.

U.S. Dow Jones industrial average futures US30
28620/28715 resistance
28468/28388 support
Dow futures fell as the U.S. and Iran tensions, undermining investor appetite and increasing risk aversion. At present, note 28468 and 28388 support, resistance 28620 and 28715. If the situation changes significantly, the relevant ranging can be broken.

BTCUSD:
7750 / 7900 resistance
7250 / 7000 support
the U.S. and Iran tensions, undermining investor appetite and increasing risk aversion. Dow future fell, bullish the bitcoin price. Keep watching the tensions and let cryptocurrency demand increasing and price up.

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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