ATFX Market Update - 2020.01.14

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ATFX Market Outlook, 2020 Jan 14

Personal opinions today:

Japan today reported a trade deficit for November of 2.5 billion yen. Also, the Dow rebounded to close at a high, with the Nikkei following Dow futures higher and safe-haven money flowing out of the yen. Two factors led the Asian open today, the dollar-yen through the 110 barriers. Risk aversion cooled and money flowed out of the gold market. Gold prices fell earlier in Asia, breaking through support before $1,540.

Among European currencies, the pound was weaker. The move comes after the governor of the Bank of England president said earlier that BoE would not consider raising interest rates for some time to come. Bank of England officials said the same thing last night. In addition, industrial production and manufacturing in the United Kingdom fell sharply in November, and the merchandise trade account deficit was bearish for the pound. The pound fell as investors pared back their holdings as markets waited to see if the Brexit at the end of this month would resolve key issues related to its policy.

Markets will watch the release of the U.S. consumer price index for December tonight, limiting the dollar's performance. The dollar was weak as non-farm payrolls and average wages in the United States fell in December and the market calculated that U.S. consumer prices fell in December. But if December's consumer price index is in line with market expectations for a 0.2% gain or better, the dollar index is expected to rise. If U.S. consumer prices do well, that's good for U.S. stocks. If the Dow rises, gold falls, indirectly bearish for silver. Recently, the price of crude oil continued its downward trend, falling to $58. The market is watching the economic performance of countries, and will also care about the release of the U.S. crude oil inventory change tomorrow morning. If inventories fall, crude oil prices are expected to rebound.

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

07:50 Japan November trade account
10:50 China December trade account ***
19:00 U.S. December NFIB small business confidence index **
21:30 U.S. December consumer price index ***
22:00 Fed Williams moderates discussion **
The next day 01:00 EIA releases monthly energy outlook **
The next day 05:30 U.S. API crude oil stocks last week ***

Euro
1.1145/1.1155 resistance
1.1090/1.1080 support
The dollar fell on expectations of a drop in the Euro as markets awaited the results of U.S. consumer price data for December overnight. The market is waiting for the results of the data, if the expectations, the dollar rebound, bearish Euro. Technically, 1.1145 or 1.1155 are important resistance levels that may limit the amplitude. In contrast, U.S. data were weak and the Euro could test a 1.1155 resistance. Otherwise, Euro adjustment.

Pound to dollar
1.3035/1.3045 resistance
1.2955/1.2945 support
The Bank of England president has said it has no intention of raising interest rates after weak UK economic data in November. The pound is expected to be trading at a temporary low ahead of tomorrow's consumer price index and retail sales data. If the U.S. consumer price index is weak they release tonight, the pound could bullish. On the other hand, if U.S. crude oil inventories decline and Brent oil prices rise, it could benefit the pound. It is recommended to keep an eye on the results of the above data to catch the trend of the pound.

Australian dollar
0.6935/0.6945 resistance
0.6880/0.6870 support
China's trade representative went to the United States is preparing to sign a trade phase agreement between the United States and China tomorrow, indirectly bullish the Australian economy and lowering expectations of a rate cut by the reserve bank of Australia. In addition, China and the United States strengthen close ties and cooperation, the news boosted the basic industrial metal prices, the bullish Australian dollar. Technically, the AUDUSD first target resistance is 0.6935 and 0.6945. Expect the New Zealand dollar to have an opportunity to follow the Australian dollar.

Dollar to yen
110.20/110.30 resistance
109.75/109.65 support
Equity markets continued to rise, with the Dow and Nikkei rising and the dollar breaking through the 110 marks against the yen. Technically, the dollar has been holding off the $110 barrier against the yen for the past six months. But outside of technical analysis, the dollar could fall against the yen if U.S. economic data is weak and Dow futures adjust. Suggest keeping an eye on Dow futures to capture the dollar-yen trading direction.

USDCAD
1.3090/1.3100 resistance
1.3025/1.3015 support
Crude oil prices fell, bearish Canadian dollar. Crude oil prices are expected to settle after last week's correction against the Canadian dollar. If U.S. crude inventories decline and oil prices rise, the USDCAD could pull back to 1.3025 and 1.3015 support.

US crude oil futures
59.65/60.15 resistance
57.80/57.65 support
With political tensions easing and crude oil prices adjusted, short-term risk aversion is expected to continue for some time. The market is watching the U.S. economic data and crude oil inventory change data. Please pay attention to crude oil price volatility.

Gold
1560/1562 resistance
1533/1530 support
Tension in the Middle East cooled, coupled with a rise in investment sentiment, has seen money flowing into stocks. Dow futures rebounded, Asian and European stocks rose and money flowed out of gold and silver. For now, it is recommended to keep an eye on the Dow futures to capture gold and silver prices movement. Technically, the gold price, $1,530, is important support. If you break the support, it could test $1515 or $1505, respectively.

U.S. Dow Jones industrial average futures US30
29075/29155 resistance
28775/28645 support
China and the United States to sign the first phase of trade agreement time is approaching, positive market sentiment, driving the Dow rose. Also, Dow futures rose on expectations for U.S. corporate earnings growth. If any negative sentiment does not recur, Dow futures are expected to remain bullish. However, the key now is to see if the second phase of trade negotiations can be held shortly after the first phase of the trade agreement is concluded tomorrow. If more than a month, investment climate cooling, the Dow may adjust. Technically, the reference support levels are 28775 and 28645, respectively, when Dow futures fall further. Keep watching the important support at 28553.

BTCUSD:
8500 / 8700 resistance
7550 / 7300 support
The Middle East tensions and U.S. jobs data under expectations, US CPI now is predicated lower, bullish the bitcoin price. Technically, the bitcoin price testing US8500 which is one of the significant resistance.

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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