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ATFX Market Outlook, 2020 Feb 12
Personal opinions today:
Yesterday, ECB President presented the annual report and the federal reserve chairman gave testimony. Then, the Bank of England governor appeared at the hearing. They all comment that the interest rates are appropriate and it can keep the economy grow.
However, Fed Chairman Powell predicts U.S. growth forecasts were strong and he believed the Fed would consider raising rates more than cutting them for some time to come. The U.S. President immediately commented on comments by federal reserve chairman Powell, criticizing his comments for limited U.S. economic growth and depressing the upside for U.S. stocks.
This morning, the U.S. API reported a slight increase in crude oil inventories change, and the EIA is expected to report also a slight increase in crude oil inventories change this evening.
The New Zealand dollar rose in the morning after the Reserve Bank of New Zealand's decision to keep interest rates unchanged, dispelling investor expectations of a rate cut. Believe that, the New Zealand dollar and Australian dollar have the opportunity to reverse the decline, test upward resistance. Today, investors focus on Eurozone industrial output in December. Investors were most likely to watch federal reserve chairman Powell's testimony during US trading hours. If Powell says the Fed will not consider raising rates in the first half of the year, expect Dow futures and crude oil prices to rise, as well as European and commodity currencies. Recommended that, if Dow futures rise, gold and silver price could fall. Please pay attention to the evening federal reserve chairman Powell's testimony time, the global market volatility!
[Important financial data and events]
Note: * refers to the degree of importance
OPEC releases monthly oil market report **
09:00 RBNZ interest rate decision ***
10:00 Bank of New Zealand press conference ***
18:00 Eurozone industrial output in December **
23:00 Federal reserve chairman Powell testifies ***
23:30 EIA crude oil inventory change **
The Fed’s outlook for the U.S. economy and Fed chairman Powell sounded a dovish note but looked ahead to a rate hike. In contrast, ECB President looked ahead to the monetary policy that continues to ease policy, bearish for the Euro. Technically, the EURUSD note is limited to 1.0985 resistance, short-term resistance 1.0940. Faced with fundamentals, the Euro could continue to move lower against the dollar, with a chance to test last year's low of 1.0880. In addition, pay attention to the British pound fluctuations, indirect impact on the Euro.
Pound to dollar
The UK December data surprised markets. British pound broke resistance at $1.2955, as high as $1.2966. However, Bank of England governor Carney attended the hearing on monetary policy mentioned that its loose monetary policy would remain unchanged. In contrast, the Fed monetary policy, the dollar, limit the rise in the pound. If Fed chairman Powell testifies tonight and the dollar gains, the pound could test another 1.2905 or 1.2885 support. Technically, the key resistance level is 1.3000. If not over the resistance, the pound keeps downward.
We suggested before that the Australian and New Zealand dollars would rise if the RBNZ remains interest rates, eliminating market expectations of a rate cut. The Australian and New Zealand dollars are expected to keep rising for some time to come as the fed keeps interest rates on hold. Technically, looking at the AUDUSD resistance 0.6755. If it break the resistance, it would be expected to test 0.6800. The NZ dollar is expected to follow the Australian dollar.
Dollar to yen
Dow Jones futures and global stocks fell only slightly. The USDJPY is expected to support resistance at 109, above 110. If Dow futures continue to rise, the USDJPY could test 110.20 resistance. Believe that the U.S. inflation data, bullish Dow future, indirect bullish USDJPY.
Crude oil inventories rose modestly, stabilizing crude prices. At present, the price of crude oil stopped falling and rose. The Fed has no plans to raise interest rates, limiting the rise of the dollar and the Canadian dollar. Technically, USDCAD keeps an eye on the 1.3325 resistance, looking below the 1.3260 support level.
US crude oil futures
Strong U.S. job and economic data in January, it could lead to gains in crude oil prices. OPEC planning output cuts. If OPEC convinced other producers, it could stabilize prices and lead to a rebound. It is worth watching the EIA report to see if it will lead to crude oil price volatility. Technically, keep an eye on the $49.55 and $49.35 support and key resistance levels of $50.80. If any good news from OPEC for the market, the price of crude oil could test $50.80 or up to $52.
Strong U.S. economic and job data bearish gold price. If Dow futures rise and gold falls as risk aversion cools. The U.S. will release inflation and consumption data in January, have an opportunity to be bearish on gold amid forecast growth. Technically, gold can focus on $1575 and $1577 resistance. Without a break of $1579, gold could still have a chance to test $1560 or $1558 support.
U.S. Dow Jones industrial average futures US30
Fed Chairman Powell's comments didn't boost Dow futures, which could adjust for gains in the short term. But with U.S. data expectations for tomorrow and Friday, Dow futures are expected to test the possibility of 29415 or 29,550 resistance. Short attention 28935 and 28870 support bits.
10550 / 10850 resistance
10050 / 9800 support
Dow futures rebounded, back to record high 29400 levels. Keep watching the Dow future and global stock market indexes. If Dow fell, the bitcoin price could up further. Otherwise, the bitcoin could fall.
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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