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ATFX Market Outlook, 2019 Aug 28
Personal opinions today:
Starting next week, US trade department will extra charge tariffs on $550 billion worth of China import goods. The market is assuming global economies, exclusive at the two countries are facing a recession. Economic growth slowed in the Q3 to Q4, as businesses faced cash constraints. US two-year and 10-year Treasury yields were again upside down yesterday, USDCNH rose, hit the highest back. More importantly, US long and short term treasury yields have once again fallen, and the Dow future has fallen again. Yesterday the Dow opened higher and closed lower. Then gold prices rose back to $1,543. Nikkei futures closed lower as well, while the USDJPY also traded below 106. U.S. crude oil prices rebounded, helped by a sharp drop in API crude oil stocks, while crude oil futures recovered to the $55 level.
Today, European market attention, Germany Gfk consumer confidence index and the Eurozone money supply M3, observe the impact of the Euro. Swiss ZEW economic status index and investor confidence index, for reference only, believe the impact on the Swiss franc is not significant. The market is more concerned about the German unemployment rate and CPl. It will release tomorrow, and it is a strong impact on the EURUSD. Later, the revised US real GDP was even more important tomorrow. The results will affect expectations for U.S. nonfarm payrolls and could affect the Fed monetary policy decision in September, more directly affecting U.S. two-year and 10-year Treasury yields instantly.
[Important financial data and events]
14:00 German Gfk consumer confidence index
16:00 Eurozone money supply M3
16:00 Swiss ZEW economic status and investor confidence
22:30 EIA crude oil inventories change
German GDP was flat in the Q2. The key problem is that German GDP remained negative in the Q2 and Q1, Euro weakness. The only reason to support the EURUSD, respectively, is the imminent escalation of the trade tensions between China and the United States, part of the money into the Euro. The US long and short term treasury yields are upside down, and the Fed has released dovish remarks from the FOMC chairman and US President. And markets are waiting for relevant German economic data and revised US Q2 real GDP figures tomorrow. Technically, the EURUSD suggested support level of 1.1110 breakthroughs, looking at going down 1.1060 support. The technical suggestion resistance could see 1.1110 and 1.1135.
The markets found that the British prime minister has been actively working after the G7 summit on a revised backup plan for the Irish border and finding ways to prevent a Brexit by the end of the month. Investors now believe that under standard procedures, the U.K. prime minister must successfully convince most members in British Parliament. But estimates of the current success rate is not high, bearish British pound anytime. The first resistance at 1.23 level, could be 1.2310.
The AUDUSD has rebounded on trade talks between the United States and China resuming in mid-September, easing the investment climate. But after the rally, the market is concerned about how upgraded tariffs between the U.S. and China, which began on Sunday, will boost the impact of the recession. Only now will we see if the Fed's monetary policy and further comments from US President Donald Trump can change, it can be bullish the Australian dollar. At this moment, we will wait and see the U.S. Q2 real GDP revision, limiting the volatility of the Australian dollar. Technically, the AUDUSD first focus on 0.6775 resistance, if not a breakthrough, the trend may be adjusted. Believe that the New Zealand dollar will continue to follow the pattern of the Australian dollar.
Coming up, the tariffs between China and the United States made trade tensions. The US long and short term Treasury bonds yields was upside down. Negative comments from US President Donald Trump, sending global stock markets go lower. It is recommended to keep watching the Dow and Nikkei to determine the direction of USDJPY trading.
A sharp drop in U.S. API crude oil inventories boosted crude oil prices, while the U.S. dollar rose against the Canadian dollar, representing a decline in the Canadian dollar. It could believe that the market is watching the US Q2 real GDP results, the dollar stronger against the Canadian dollar. But if crude oil prices can keep rising, it could be bullish Canadian dollar. Technically, the USDCAD support levels are conservatively estimated at 1.3275 and 1.3260. If the crude oil price rises and the trade tensions ease, the USDCAD breaks through the original support target and has the opportunity to test the 1.3230 support.
US crude oil futures
U.S. API stocks fell sharply, with EIA stocks expected to fall as well, and crude oil prices rebounded. Fed chairman dovish remarks, China and US trade talks continue in September, stimulate oil demand. But the US President willing to negotiate with Iran could defuse sanctions and boost oil supplies, giving it a chance to limit the crude oil price increases. Technically, crude oil prices broke through resistance at 55.10. However, $56.50 and $57 as Important resistance, worries crude oil prices downward adjustment.
U.S. long and short term Treasury yields upside down, the Dow closed lower. As always, gold prices rose as the stock market fell. Besides, the dovish comments of the Fed chairman have also spurred gold prices. If any good news in the market, it will ease trade tensions. US Treasury yields are back in healthy, the Dow futures rebounded, and gold would adjust. Please check out the Dow futures to catch up the gold prices.
U.S. Dow Jones industrial average futures US30
The upgraded tariffs between China and the United States is coming, with markets watching for the U.S. revised Q2 real GDP figures released tomorrow. Dow fell over a hundred points yesterday. If the trade tensions between China and the United States can be further eased, the US Treasury bond yields in 2 years and 10 years back to normal, expected to bullish the Dow. On the upside, the Dow could test 25,980 or 26,060 resistance. However, if the support breaks through 25635, the next support will look to 25400.
10400 /10650 resistance
9950 / 9650 support
Trade tensions between the US and China, could bullish the bitcoin price and followed the gold price rose. However, it seems cool down, and the bitcoin price could fall a bit. Technically, it supports may looking at 9950 and 9650. The markets watching for the U.S. release tomorrow of revised Q2 real GDP figures.
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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