ATFX Market Update - 2020.01.15

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ATFX Market Outlook, 2020 Jan 15

Personal opinions today:

The U.S. CPI rose 0.2% in December, down slightly from 0.3% but in line with expectations. The dollar had already fallen before yesterday's data. The Euro rose on the news, tried a 1.1145 resistance. Commodity currencies the Australian dollar, the New Zealand dollar and the Canadian dollar followed suit. Dow futures fell and gold prices rose since the US consumer price index was forecast to fall. Markets are focused today on the December U.S. PPI and the Fed Beige Book. Generally, the Fed releases its Beige Book, a snapshot of regional U.S. economic performance, with markets paying particular attention to the report for clues on the interest rate policy at the end of the month, which is more likely to lead the dollar in the right direction.

In European trading today, European currencies will be led lower by Germany's full-year 2019 GDP, U.K. December CPI, and the Eurozone November trade account forecast. The dollar will then move in response to a range of U.S. economic data expectations and results. On top of that, the U.S. manufacturing and services sector PMI slowed in December, while U.S. nonfarm payrolls, average wages, and CPI fell in December. The outlook for the Fed Beige book report was bearish Dow and US dollars, while the gold, silver price and the yen were on the strong side.

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

15:45 France December CPI **
17:00 Germany Annual GDP growth in 2019 ***
17:30 UK December retail price index **
17:30 UK December CPI **
18:00 Eurozone November industrial output **
18:00 Eurozone November trade account ***
21:30 U.S. December PPI ***
21:30 New York Fed manufacturing index **
23:30 US EIA crude oil inventories change **
OPEC releases monthly oil market report ***
the next day 03:00, Fed Beige Book

Euro
1.1145/1.1155 resistance
1.1105/1.1095 support
U.S. CPI data for December fell as expected, pushing the Euro higher. The market is watching today's European data, especially Germany's 2019 GDP and the Eurozone November trade account, for the most attention. If it beats expectations, the Euro could rebound. Technically, around 1.1145 or 1.1155, there are EURUSD important resistance levels. In addition, the U.S. Fed Beige Book on economic conditions is being watched, and the dollar could fall and the Euro’s gain if the report does not signal expansion.

Pound to dollar
1.3075/1.3085 resistance
1.2955/1.2945 support
Earlier, the Bank of England chairman said it had no intention of raising interest rates after weak UK economic data for November. The market is waiting for the results of the UK CPI and retail sales data in December, which are expected to temporarily lower the pound. If the U.S. economic data release is weak tonight and the Fed beige book outlook is downbeat, the pound could upward.

Australian dollar
0.6935/0.6945 resistance
0.6885/0.6875 support
The US and China signed a first-phase trade deal today that markets believe will indirectly boost Australia's economic growth, lowering expectations for 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 industrial metal prices, 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
Dow futures rose and the dollar briefly broke through the 110 marks against the yen as trade sentiment eased, expectations for global corporate earnings growth and investment sentiment picked up. But the yen strengthened as US December CPI fell and the dollar failed to rise further. If U.S. economic data continues to disappoint markets this week, Dow futures will fall. Believe that the dollar against the yen may start to decline. Suggest keeping an eye on Dow futures performance to capture the dollar-yen trading direction.

USDCAD
1.3090/1.3100 resistance
1.3025/1.3015 support
U.S. crude oil inventories rose as expected and crude prices were already priced in ahead of the announcement. As usual, after the results were announced, short interest, crude oil prices rose, the indirect bullish Canadian dollar. On top of that, U.S. CPI fell in December and the outlook for the Fed Beige book report was not expected to produce growth forecasts, and the dollar retreated against the Canadian dollar. Technically, USDCAD expects to test 1.3025 and 1.3015 support.

US crude oil futures
59.65/60.15 resistance
57.80/57.65 support
After the crude oil inventory data, closed the short position, crude oil prices rose, the situation in the United States and Iran is expected to continue to disrupt the supply of crude oil investors, risk aversion is likely to continue for some time, supporting crude prices. Technically, refer to $57.80 and $57.65 support, up to $59.65 and $60.15 resistance.

Gold
1555/1557 resistance
1543/1541 support
U.S. CPI fell, Dow futures and the dollar limited gains, and gold prices were supported by lows. Markets awaited the Fed Beige book report, but investors were downbeat on the outlook, sending money into gold. If the report is neutral and does not explicitly signal weakness in the U.S. economy, gold is expected to adjust. Investors continued to watch Dow futures, recommended choose the Dow futures to forecast the market sentiment and capture gold price trends. If Dow futures rise, gold and silver price fall.

U.S. Dow Jones industrial average futures US30
29075/29155 resistance
28775/28645 support
Today, China and the United States signed the first phase of the trade agreement. However, the US government had no intention of lowering tariffs after the first phase of the trade deal. As a result, the market is betting that the second phase of trade talks could stall ahead of the U.S. president elected in November, with the investment climate cooling and the Dow likely to continue to adjust. Technically, if Dow futures adjust and Dow futures resistance level 29075 becomes the key resistance, testing lower support likely 28645.

BTCUSD:
9025 / 9175 resistance
8250 / 8000 support US December CPI lowers than last month and the Fed Beige Book outlook would not good, bullish the bitcoin price. Technically, the bitcoin price over US8500 which is one of significant resistance. The next target would be looking at US9175. Keep watching the Dow. If Dow fell, the bitcoin price could up. It is the same trend with the gold price.

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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