ATFX Market Update - 2020.01.16

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ATFX Market Outlook, 2020 Jan 16

Personal opinions today:

Markets took note of the Fed beige book report the moderate performance of the U.S. regional economy, which could face downside risks in the face of a trade war and U.S. tariffs. Investors are thinking FOMC would keep interest rates unchanged and keep a low-interest policy.

The first phase of the trade agreement between China and the United States was formally signed. The US President said that they will move forward to the second phase and end the trade gap between the two countries. The news was positive for stocks, with Dow futures rising, leading Asian markets to open higher. If the stock market continues to rise, it is believed that will bullish crude oil prices, bearish gold, and silver.

In European trading today, the European currency will be looking at Germany’s December CPI final reading and the minutes of the ECB monetary policy. Now, on the basis of previous Eurozone economic inflation data, it is expected to be bearish for the euro. Tonight's focus will include U.S. retail sales for December, jobless claims for last week and U.S. business inventories for November. Then, at 02:00 a.m., watch for comments from ECB President, looking for clues to next week's ECB policy meeting and setting the trends of the Euro.

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

15:00 Germany December CPI final reading **
17:00 IEA releases its monthly oil market report **
19:30 ECB monetary policy minutes **
21:30 U.S. December retail sales ***
21:30 U.S. jobless claims for last week ***
23:00 U.S. November business inventories ***
23:00 U.S. January housing market index NAHB **
23:30 U.S. EIA gas inventory last week **
At 02:00 the next day, ECB President speech ***

Euro
1.1165/1.1175 resistance
1.1130/1.1125 support
Germany’s GDP and the Eurozone November trade account were weak in 2019, which is bearish for the Euro. But the Fed beige book reported on economic conditions, which showed moderate growth. Depending on the report, the dollar could fall, followed by the bullish Euro, which hit $1.1162, in line with the analysis's expectations. But we focus today is Germany December CPI final reading and the ECB minutes. These earlier announcements, it is possible to digest, but still can be bearish for the Euro. It is recommended to keep an eye on the Euro limit gains between 1.1165 or 1.1175 resistance.

Pound to dollar
1.3075/1.3085 resistance
1.3015/1.3005 support
Reported CPI fell in December and a flat reading in retail prices, the pound is expected to be affected by a wait to see how the Eurozone and U.S. economies perform. The rise in the pound could be limited ahead of the release tomorrow of December retail sales data. It is recommended to keep an eye on the trend of the pound, the rise may be adjusted.

Australian dollar
0.6935/0.6945 resistance
0.6885/0.6875 support
The United States and China have signed a first-phase trade agreement, and the two countries have made progress in economic and trade relations, which the market believes will indirectly boost Australia's economic growth and lower the expectation of a rate cut by the RBA. It is believed that with the help of closer ties and cooperation between China and the U.S., the prices of basic industrial metals will be boosted.

Dollar to yen
110.05/110.15 resistance
109.75/109.65 support
Dow futures rose as trade sentiment eased and investment sentiment picked up. 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 dollar-yen trading direction.

USDCAD
1.3075/1.3085 resistance
1.3025/1.3015 support
China and the United States signed the first phase of the agreement, crude oil prices rose, the Canadian dollar, the United States dollar against the Canadian dollar fell. Crude oil prices are expected to continue to rise, the USDCAD adjustment widened, is expected to first test 1.3025 and 1.3015 support.

U.S. crude oil futures
59.65/60.15 resistance
57.80/57.65 support
Before China and the United States signed the trade agreement, short interest. The official confirmation of the signing and the President of the United States said the two sides are working together to increase the price of crude oil. In addition, tensions in the Middle East have an opportunity to affect crude oil supplies. If risk aversion rises, bullish crude oil prices. Technically, refer to 57.80 and 57.65 support, up to 59.65 and 60.15 resistance.

Gold
1559/1561 resistance
1547/1545 support
U.S. CPI fell, Dow futures and the dollar limited gains, and gold prices were supported by lows. The Fed beige book reported moderate economic growth, a gloomy outlook for investors, sent money into gold, which rose. Investors continued to watch Dow futures, using market sentiment to capture gold. If Dow futures rise, gold and silver price fall.

U.S. Dow Jones industrial average futures US30
29155/29220 resistance
29020/28930 support
China and the United States signed the first phase of trade agreement, good market investment climate. U.S. companies began reporting corporate earnings and the Dow could continue to rise in line with investor expectations. But it must be noted that corporate earnings may be lower than market forecasts, leading to a correction in the stock market. Technically, the first phase of the dow futures correction focuses on 29020 or 28930 support.

BTCUSD:
9025 / 9175 resistance
8250 / 8000 support US December CPI lower then last month and the Fed Beige Book reported moderate economic growth, a gloomy outlook for investors and bullish the bitcoin price. Technically, the next target would looking at US9175. Keep watching the Dow. If Dow fell, the bitcoin price could up. It is same trend with 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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