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ATFX Market Outlook, 2019 Aug 26
Personal opinions today:
The US trade department on Friday planned to raise $550 billion in additional tariffs on Chinese imports on Sep and October separately. The Dow fell, and Asian stocks also fell as the trade tensions between China and the US. The dollar index was dropping to 97. Risk aversion, gold prices and the yen have risen sharply. Over the weekend, the Jackson Hole meeting and the G7 summit appeared in which the US President has been defiant, defying opposition from central Banks and the G7 to a declaration of war on global trade.
The Jackson Hole meeting has ended, and the G7 summit continues. They are discussing the trade war on how to reduce the influence. The global focus on how to reduce global trade tensions and economic recession" Fed chairman Powell's dovish comments, prompted investors to raise the possibility of the federal deploying a rate cut. The G7 summit continues in the next two days, with markets watching to see if U.S. trade policy eases and changes sentiment. Believe it, the stock market, the gold market and currency market are very volatile until the end of the summit on Tuesday.
[Important financial data and events]
(London stock exchange closed for a summer bank holiday.)
16:00 Germany's IFO business climate index for August
20:30 US Durable goods orders in July
21:45 Bank of England governor Carney speech
22:00 US Fed Bullard gives welcome speech on BBS
22:30 US Dallas Fed business activity index for August
The group of seven (G7) summit ends tomorrow
At the annual meeting of central Banks, the focus is on the federal reserve's monetary policy. Fed chairman dovish remarks, the dollar fell. The U.S. President has raised tensions with China by imposing additional tariffs on Chinese imports. Europe has not been on the trade front this time and is standing alone. The Euro has rebounded strongly. The IFO business climate index for August in Germany and the monthly rate of durable goods orders in the United States in July are noteworthy for their performance today. The Euro is expecting to remain a strength, if drop in the monthly rate of U.S. durable goods orders in July and the Fed interest-rate cut outlook. Technically, EURUSD preliminary suggested support at 1.1125 and 1.1110, resistance at 1.1170 and 1.1195. Besides, continue to pay attention to the G7 meeting, different remarks, please strictly control trading risk.
The British prime minister has responded on EU demands and is willing to accept the European Commission proposed an amendment to the Irish border backup plan, pushing the pound above the 1.2200. Over the weekend, at the Jackson Hole meeting and the ongoing G7 summit, the British prime minister will put an interest in the pound. However, in the normal process, the British prime minister must convince the members of the British parliament who support hard Brexit, and the success rate is not high. The British pound is subject to a crisis, and it is adjusted opportunity. At present, it is recommended to pay attention to 1.2215 support, and if lost, it will explore 1.20. Technically, the pound rebounded within a week, as high as 1.2290. The resistance of the rebound wave is 1.2310. If there is no reason to rise, it is difficult to break through and pay attention to the downside risk.
The US President is striking back at the extra tariffs that China is paying to import 550 billion dollars worth of goods from China, which is hurting Australia's economic interests and hurting the Australian dollar. Technically, this analysis points out last week that the Australian dollar is concerned about the resistance of 0.6785 against us dollar. If it fails to break through, the trend will adjust, and the New Zealand dollar will follow the pattern of the Australian dollar. At present, the G7 summit is still going on. We must pay close attention to the contents and remarks of the summit and see if it can resolve the crisis. If the US President does things his way and is requisitioning China's tariffs without being boycotted globally, there is even higher downside risk to the Australian and New Zealand dollars. The current key resistance is 0.6770, and the support level is 0.6665.
U.S. federal reserve chairman's dovish comments and an escalating trade war between China and the United States sent the Dow fell and globally, while the dollar fell against the yen following the lead of the Dow and Nikkei. The dollar got a boost against the yen as it waited to see if there was good news to cool down the trade tensions before the final G7 summit. Otherwise, USDJPY may continue to fall. Technically, the dollar against the yen resistance 105.80 and 106.00 resistance. Whether the dollar can lift strength against the yen depends on the Dow and Nikkei trends.
As the trade tensions between China and the United States, crude oil prices fall, the Canadian dollar has a chance to fall. Technically, the current hold on 1.3345 resistance, if the resistance break, may test the 1.34 level. Investors are nervous, with conservative estimates of dollar support at 1.3275 and 1.3260. Wait for the G7 summit and watch the U.S. dollar against the Canadian dollar, using oil prices as an indicator of the Canadian dollar.
US crude oil futures
Oil prices fell as the trade tensions between the U.S. and China again, with U.S. President imposing a trade retaliation against China ahead of U.S. API and EIA inventories. Fortunately, the dovish remarks of the Fed chairman support crude prices. But next week, in early September, China and the United States will impose additional tariffs on each other, lowering expectations of oil demand and depressing oil prices. Fundamentals continue to limit the rise in crude oil prices; the resistance level reduced to 55.10. Hopefully, the Fed chairman Powell intensifies his dovish rhetoric to boost oil prices. Otherwise, they will see the crude oil price tests $52 or $50.
The trade tensions between China and the United States upgrading, and the stock market fell sharply. Fed chairman releases dovish comments, gold prices rose. Watch out for any good news from the G7 meeting to ease tensions, as gold prices adjust. Technically, the price of gold in recent months has repeatedly hit $1,492, breaking the failure, coupled with the news of bullish gold, gold price rise has broken through the $1,505 resistance. Now the technical resistance between 1552 and 1556, may see $1560 crucial strength. It is worth watching the future trend of the Dow.
U.S. Dow Jones industrial average futures US30
Trade tensions between China and the United States, the Dow deeply fell. While central banks around the world are intent on easing monetary policy, expanding the flow of money and stimulating the economy. But the trade tensions between China and the United States has failed to relax, making it difficult to boost stocks. If the trade tensions between the United States and China upgrading, but the U.S. and China trade talks could continue, the Dow could back. News if market sentiment change to good, technically, the Dow is likely to test resistance.
10600 /10850 resistance
11050 / 10050 support
Looking at trade tensions between the US and China upgrading, bullish the bitcoin price and followed the gold price rose. If no any intention to cool down the tensions, the bitcoin price could rise further.
Enjoy trading! The content is for reference only. Please do ensure that you understand the risk.
Information provided by AT Global Market, Chief Analyst of Asia Pacific: Martin Lam
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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