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ATFX Market Update - 2020.02.18


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ATFX Market Outlook, 2020 Feb 18

Personal opinions today:

The market looks ahead to the release of FOMC minutes on Thursday, with an eye on the 2020 committee members' speeches for their views on the Fed’s monetary policy intention. Remember last week, Fed chairman Powell said that the Fed would not raise rates for now and would continue to lean toward current rates. In addition, the federal reserve reduced the scale of bond purchases, reduced market liquidity. Fed policy, resulting in a decline in equity market funds, bearish Dow future this morning. Dow futures fell more than 100 points in early Asian trading. The Nikkei index, the Australian stock index, the China A50 index, and Hong Kong HSI opened lower as money flowed into gold and the Japanese yen. Of course, the Fed tightens its purchases, reduces its dollar balance sheet, and is bullish on the U.S. dollar.

The U.S. dollar rose and European currencies fell. Investors are waiting for the U.K. unemployment rate and jobless claims for January, Germany, and Eurozone ZEW economic sentiment index were released today. Weak data could deepen losses in the Euro, Swiss franc and British pound. In addition, in the evening, the New York Fed manufacturing index in February and federal member speech. If Dow futures and the dollar rose ahead of the news, limiting gold's gains and bullish crude oil price.

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

08:30 The RBA minutes **
17:30 UK unemployment rate and jobless claims ***
18:00 Germany and Eurozone ZEW economic sentiment ***
21:30 Canada manufacturing sales **
21:30 U.S. New York fed manufacturing index **
23:00 U.S. NAHB housing market index *

1.0860/1.0870 resistance
1.0810/1.0800 support
In European session today, ahead of the release of the ZEW economic sentiment index for February in Germany and the Eurozone, it was worth keeping an eye on expectations for a bearish for Euro. Comments by the European central bank's chief economist said that an uncertain outlook for the Eurozone economy, which was bearish for the Euro. Technically, the Euro could continue its correction against the dollar, with a 250% correction and a target of 1.0810. If the EURUSD breaks 1.0800 support, it looks down at 1.0765. At present the EURUSD indicators fell to buy level, futures contracts show institutional investors to increase their holdings of Euro, it is worth noting!

Pound to dollar
1.3080/1.3090 resistance
1.2960/1.2950 support
UK unemployment and employment data for December will be released today, while the UK consumer and retail price index for January will be released tomorrow. That was followed on Thursday by the release of the UK retail sales data for January and the PMI for the manufacturing sector for February. If the data beat market expectations, the pound, and vice versa. Technically, the pound could test a significant resistance to $1.3120. Important support for short term lower sterling refers to 1.2950.

Australian dollar
0.6720/0.6730 resistance
0.6665/0.6655 support
The RBA monetary policy statement removed expectations of a rate cut from investors, but the RBA revisited expectations of further rate cuts in the minutes of its February policy meeting. Fundamentals changed, technical analysis also changed, the key resistance lowered to 0.6730. First target support bit reference 0.6655 support. Bearish NZ dollar as well.

Dollar to yen
109.90/110.00 resistance
109.65/109.55 support
Yesterday, Japan reported Q4 GDP fell, the lowest since 2014. Dow futures fell, the Nikkei fell further and the dollar rose against the yen. Technical analysis, dollar-yen trading sideways, limited between 110.20 resistance and 109.55 support. If the global stock market falls, watch the USDJPY break 109.55 support, would test 1.0925. In addition, it is worth paying attention to Japan's fiscal year is approaching, corporate capital flows back to Japan, the capital reversal, the U.S. dollar/yen preliminary estimates below the 108 level.

1.3280/1.3290 resistance
1.3220/1.3210 support
Crude oil price was flat after rising to $52. The U.S. dollar/Canadian dollar is expected to trade in the 1.3220 to 1.3280 range based on technical analysis, given the low impact of Canadian manufacturing sales in December and the lack of investor investment.

US crude oil futures
52.35/52.60 resistance
51.55/51.35 support
The U.S. economy has performed strongly, but the economic outlook in Europe and Asia is uncertain, limiting demand growth and limiting crude oil prices. OPEC has offered to cut output and is waiting for support from other members. Oil prices are expected to stabilize for now. As this analysis estimated last week, $50 or $49 oil could see investor support if prices adjust. Technically, crude has broken through 52.60 resistance and is expected to test $54.

1590/1592 resistance
1578/1576 support
The monetary policies of the ECB and Asian central Banks are consistent in maintaining low-interest rates and easy monetary policies. The reduction of the scale of bond purchases by the federal reserve may trigger a sharp correction in the stock market. Technically, gold hit $1, 586 resistance in Asia today and could test further significant resistance at $1, 592. If gold adjusts for gains, keep an eye on the $1578 and $1576 support ranges.

U.S. Dow Jones industrial average futures US30
29550/29635 resistance
29080/28935 support
In early Asia trading hours, Dow futures fell more than 100 points after the U.S. holiday. Investors worried the federal reserve to reduce the size of the purchase of bonds, reducing the market liquidity, adverse to the continued development of financial markets. In addition, investors looked ahead to Thursday morning's meeting of the federal reserve's policy-setting committee. During this period, there are opportunities to limit Dow futures gains and possibly test lows. Technically, Dow futures focus on 29,550 and 29,635 resistance and 29,080 and 28,935 support.

9985 / 10225 resistance
9550 / 9415
support Investors worried the federal reserve to reduce the size of the purchase of bonds, reducing the market liquidity, adverse to the continued development of financial markets. If Dow future falls before FOMC minutes, the bitcoin would rebound from lower.

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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