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ATFX Market Outlook, 2020 Feb 27
Personal opinions today:
The Coronavirus spread is not over yet. The US President has said it could affect economic growth in the United States and lead to an unexpected decline in U.S. GDP. Investor sentiment continued to spook, with US larger companies issuing profit warnings and global stock markets continuing to fall, with Dow futures down over 2,000 points. Money flowed into treasuries and the gold market, where yields on US different maturities Treasury notes fell. The gold prices remain in strength.
European currencies rose as the dollar fell amid economic uncertainty in the United States. ECB President Christine Lagarde delivered a speech today. She would mention the ECB's monetary policy and economic outlook. Then the final reading of the Eurozone industrial and economic sentiment index and consumer confidence index for February were watched. Market expectations were flat, which could limit currency gains in the Euro. In addition, the number of U.S. jobless claims last week and the revision of real GDP for the Q4 were watched by global financial markets.
[Important financial data and events]
Note: * refers to the degree of importance
17:45 ECB President Christine Lagarde speech ***
18:00 Eurozone Economic Sentiment Index **
18:00 Eurozone Consumer Confidence Index final reading ***
21:30 Canada Q4 current account **
21:30 U.S. Durable goods orders for January **
21:30 U.S. jobless claims ***
21:30 U.S. real GDP Q4 revised ***
23:00 U.S. signed home sales index for January **
The dollar fell yesterday and the euro rose against the dollar. Markets are watching the final reading of the eurozone's consumer confidence index for February. Technically, the euro is testing its previous high against the dollar at 1.0925. The euro could fall against the dollar if U.S. economic data beat market expectations today. The current technical support bits, 1.0865 and 1.0855, are worth noting.
The British government is due to formally discuss a Brexit deal with the European Union's Brexit committee next week. The pound fell as investors were unnerved by the prime minister's tough talk on the terms of the deal. Meanwhile, the new chancellor of the exchequer is due to unveil Britain's fiscal framework, and markets are waiting to see if the budget is seen to boost government spending to stimulate the economy. In the short term, assuming the pound move within 1.28 to 1.30.
The Australian dollar is expected to continue to lower against the U.S. dollar before RBA remarks and the coronavirus spread continues, also indirectly bearish New Zealand dollar. In addition, the decline in commodity exports in Australia, affecting Australia’s income. If the U.S. economic data is weak, the dollar falls, indirectly short-term interest on the Australian and New Zealand dollars.
Dollar to yen
The global economic growth slowing down, the global stock market falls, some funds into the yen. In addition, with the approaching of Japan's fiscal year settlement, enterprises repatriate capital to Japan, and the demand for yen capital slowly rises. Believe that the dollar will fall against the yen. The tentative target is for the dollar to fall to 109 against the yen, before potentially testing 108.
With the global economy weak and the U.S. President saying the U.S. economy is suffering, U.S. oil futures continued to fall and the U.S. dollar breached $1.3305 against the Canadian dollar. OPEC's meeting with energy ministers next week is expected to speed up the early announcement of production cuts and stabilize crude prices. The Canadian dollar is expected to rise if oil prices rebound. Today, Canada reported its current account for the fourth quarter, expected to show a smaller deficit.
US crude oil futures
The global economic outlook is gloomy and oil demand is falling. U.S. oil futures continued to fall as the President said the U.S. economy is suffering. Next week, OPEC and energy ministers are expected to speed up the announcement of a joint production cut to stabilize crude prices. Given the likelihood of a production cut, crude could see its $52 target unchanged.
Money flows to the gold market for hedge, long position support. The gold prices to test $1660 resistance. For the short term support at $1,635 and $1,633. If gold breaks $1,660 resistance, it could test $1,685 or close to $1,692. But watch out for an opportunity for gold prices to fall.
U.S. Dow Jones industrial average futures US30
Dow futures fell again amid uncertainty about the global economy. Technically, Dow futures absorb 38% of the overall gain for 2019, keeping an eye out for significant support at 26,500. For now, it's important to keep an eye on the coronavirus case, Fed officials' comments and U.S. economic data to see Dow's trend.
9085 / 9245 resistance
8455 / 8250 support Unexpected market demand declined, the bitcoin price fell sharply after investors worry about the coronavirus spread. Cryptocurrencies’ prices fell and transfer to the traditional hedge market. Technically, the important support at $8250. If it fails to support, the price would test $7000 or $6500.
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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