ATFX Market Update - 2020.02.13

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ATFX Market Outlook, 2020 Feb 13

Personal opinions today:

Federal reserve chairman Powell said the Fed would not consider raising interest rates in the first half of the year, also U.S. economic growth. Dow futures, the U.S. dollar, and oil prices rose, while European and commodity currencies fell as Powell's comments boosted investor sentiment. But the Fed has no plans to raise rates, most of Central Banks around the world continue to keep their lower monetary policy, about the monetary easing. Gold and silver prices were hit by rising risk aversion, with gold at $1,565 and silver supported at $17.45.

Investors forecast the Germany Q4 GDP was flat, more likely to slow, bearish for the Euro and Swiss franc, and limited the rise in the pound. Separately, U.S. non-farm payrolls rose in January last week, with average hourly earnings rising. Investors expect the U.S. CPI to rise in January. At present, Dow futures and the dollar index to undertake investor expectations rose. Investors note that if the U.S. CPI comes in line tonight with expectations for just a 0.2%, claims for jobless benefits topped market expectations by 210,000 last week. Dow futures and the dollar should watch out for adjustments in case investors lose confidence to keep the U.S. retail sales for January and the Michigan consumer confidence index growth.

[Important financial data and events]
Note: * refers to the degree of importance

14:30 French Q4 unemployment rate **
15:00 German final CPI rate for January ***
17:00 IEA releases monthly oil market report **
21:30 U.S. CPI monthly rate for January ***
21:30 U.S. jobless claims change***
The next day 01:45 Fed Kaplan speaks **

Euro
1.0910/1.0920 resistance
1.0845/1.0835 support
The federal reserve chairman has a good outlook for U.S. economic growth. In contrast, the ECB's monetary policy continues to ease. Investors' lack of confidence in German and Eurozone economic data bearish for the Euro. Technically, the Euro is currently limited to 1.0940 resistance to the dollar. The Euro is likely to continue its downward trend against the dollar in the face of weak economic performance in the Germany Inflation and GDP declined. The Euro fell and broke the last year's low of 1.0880 and is headed further downward, with a 250% dip and 1.0810 support. However, the Euro could recoup losses if U.S. CPI only inlines or under with expectations. Also, the U.S. jobless claims beat market expectations last week, Euro would test 1.09 level.

Pound to dollar
1.2975/1.2985 resistance
1.2905/1.2895 support
Investors are watching British and the European Union discuss a Brexit deal. Technically, after falling to a three-month low at the start of the week, the pound rebounded on comments from the Fed chairman that there was no interest rate hike, and the pound tested a key resistance level of 1.3000 to limit gains after approaching the 10-day average. Fundamental analysis, the U.S. CPI growth expectations, dollar strength, bearish the pound.

Australian dollar
0.6745/0.6755 resistance
0.6710/0.6700 support
The Reserve Bank of New Zealand left interest rates unchanged, dispelling market expectations of a rate cut. Recall that the Reserve Bank of Australia held interest rates unchanged earlier this month. The Australian dollar and the New Zealand dollar have rebounded recently. The Australian and New Zealand dollars are expected to continue to rise on the belief that the federal reserve will keep interest rates unchanged for the first half of the year. But pay attention to the U.S. inflation data tonight, indirectly bearish the Australian dollar and New Zealand dollar.

Dollar to yen
110.10/110.20 resistance
109.75/109.65 support
Japanese domestic commodity prices rose in January, more than market expectations, bullish yen. After the data, the yen was supported and the dollar fell from the 110 level against the yen. But the dollar is likely to remain at 110 against the yen, with U.S. CPI for January and jobless claims for last week on investors' minds, bullish the dollar index and Dow futures, bearish the yen. If Dow futures continue to rise, the dollar/yen could test 110.20 resistance. Investors are waiting for the U.S.CPI tonight.

USDCAD
1.3260/1.3270 resistance
1.3220/1.3210 support
Crude oil inventories rose modestly, stabilizing oil prices. Moreover, the Fed chairman said the Fed had no plans to raise rates in the first half of the year, and the Canadian dollar was in line with recent estimates in this analysis. USDCAD back to 1.3240 from 1.33 level. Technically, the USDCAD broke the 1.3260 support, which is now the reference for the resistance level. The U.S. dollar/Canadian dollar could trade in the 1.3165 support range if crude breaks $52.

US crude oil futures
52.35/52.60 resistance
49.55/49.35 support
More recently, OPEC has offered to cut production, which could stabilize prices and lead to a rebound if it gets support from other producers. Crude oil prices were already up before today's EIA report. If the EIA energy report indicates a sharp increase in crude oil demand forecasts, it is believed to boost oil prices. Otherwise, the price of crude oil falls. Stay on the sidelines until the $52 breakout.

Gold
1573/1575 resistance
1565/1563 support
U.S. economic data strength, Dow futures rose, gold as risk aversion cooled, limiting the price of gold, even more bearish. Expectations for U.S. inflation and consumption growth forecasts over the next two days, especially the U.S. CPI for January tonight and limited gold price upward. Technically, the gold price can focus on $1573 and $1575 resistance. Without a break above $1579, the gold price could still test $1560 support.

U.S. Dow Jones industrial average futures US30
29550/29720 resistance
28935/28870 support
Fed Chairman Powell's comments boosted Dow futures. Tonight, U.S.release inflation and retail sales figures, which are expected to show growth. Before the data release, Dow futures upward and it was testing the 29,550 resistance successfully. But if U.S. inflation and retail sales data below market expectations finally, Dow futures could correction the uptrend. Technically, Dow future important support bits, 28935 or 28870.

BTCUSD:
10550 / 10850 resistance
10050 / 9800 support
Dow futures rebounded, testing 29550 resistance. Keep watching the Dow future and global stock market indexes after the U.S. inflation data. If Dow fell after the data, the bitcoin price could keep 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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