ATFX Market Update - 2020.02.10

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ATFX Market Outlook, 2020 Feb 10

Personal opinions today:

U.S. non-farm payrolls rose to 225,000 in January, up from 145,000 in December but below the 290,000 ADP payrolls. Meanwhile, the U.S. average hourly earnings edged up 0.2% in January compared with December. It is believed that the improvement in China and U.S. trade relations since the end of last year, as well as China's increased imports of goods, and the U.S. government's reduction of off-quota tariffs have boosted U.S. businesses' investment confidence and created jobs and rising wages. Believe this week's U.S. CPI, retail sales for January and the Michigan consumer confidence index are also likely to rise, could bullish Dow futures and the dollar. By contrast, it is bearish for European currencies and commodity currencies such as the Australian dollar, the New Zealand dollar, and the Canadian dollar. Also, it could limit the rise in gold and silver prices. The crude oil price would be looking at OPEC production cut and manufacturing production in China.

There are no important data for Europe or the United States today. The market would be watching Dow futures and global equities to reflect investor sentiment. Note Dow futures and global equities to see where the dollar is headed against the yen and gold and silver.

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

09:30 China CPI annual rate for January ***
13:00 Japan economic observer outlook index for January *
14:45 Swiss unemployment rate for January **
15:30 Switzerland January CPI monthly rate **
17:00 Eurozone Sentix investor confidence for February ***
21:15 Canada starts new homes in January **
21:15 Federal reserve governor Paul speaks **

EURUSD
1.0975/1.0985 resistance
1.0930/1.0920 support
Last Friday, U.S. job data for January continued to be strong, average wages rose, economic expansion and monetary policy remained appropriate, and the dollar strengthened. Now investors see the Eurozone economic growth remains lower than U.S. growth, the Euro could fall further to its low of 1.0930 or 1.0880 against the dollar in the second half of last year. Technically, the EURUSD note is limited to 1.0985 resistance. Moreover, the volatility of the pound will indirectly affect the volatility of the Euro.

Pound to dollar
1.2935/1.2955 resistance
1.2885/1.2845 support
U.S. economic and job data for January were strong, the dollar rose and the pound continued its downward trend. Investors have turned cautious on the pound after a Brexit and are still negotiating a trade deal. Markets look ahead to U.K. fourth-quarter GDP results tomorrow. Technically, note that resistance to the dollar is limited to 1.2955 ahead of the UK's fourth-quarter GDP report tomorrow.

Australian dollar
0.6705/0.6715 resistance
0.6670/0.6655 support
Strong U.S. economic and job data and a rise in the U.S. dollar index have not only limited the Australian dollar's gains, but the trend also continued to decline. By expectation, Australia's economy is expected to pick up in the first quarter, and the Australian dollar could rise. Stay focused on the AUDUSD adjustment to the current 0.66 level, or consider buying as low as possible. Technically, the downside looks to be 0.6670 or 0.6655 support, and it could see 0.6755 resistance as the U.S. economy continues to grow and China's economic recovery strengthens in a short period.

Dollar to yen
109.90/110.00 resistance
109.55/109.45 support
Risk aversion in the U.S cooled after January's economic and job data showed growth. U.S. Dow futures and global stock markets are expected to have limited losses. The dollar/yen is expected to support resistance at 109, above 110. If Dow futures continue their upward trend, the dollar could test 110.20 resistance against the yen. Believe, this week the United States economic data outlook positive, led the global stock market, the dollar against the yen indirect rise.

USDCAD
1.3315/1.3325 resistance
1.3270/1.3260 support
U.S. economic and job data beat expectations, easing fears of a slowdown in demand for crude oil, which could lower crude prices and boost the Canadian dollar. If crude oil prices can break through resistance at $52.38 and rise, it could see further gains in the Canadian dollar. Technically, USDCAD watch for 1.3325 resistance. If it breaks 1.3260 support, look for 1.3180 support.

US crude oil futures
52.35/52.60 resistance
49.55/49.35 support
Strong job and economic data from the United States could potentially bullish for crude oil prices. If OPEC production cuts are confirmed, and if they are coordinated with other producers, they could stabilize prices and lead to a rebound. The resumption of manufacturing and factory construction on the mainland is now a cause for concern, which could increase demand for crude oil and possibly lead to higher crude oil prices.

Gold
1575/1577 resistance
1560/1558 support
Recent U.S. economic data has been strong, and gold could fall if Dow futures rise and risk aversion cool. Although most of Central Banks around the world continued to keep interest rates low and increase the money supply, gold prices rose. On the other hand, non-farm data in the United States show average wages rising. Expectations for inflation and consumption data out of the United States this week are rising, giving gold a chance to fall.

U.S. Dow Jones industrial average futures US30
29215/29415 resistance
28855/28695 support
U.S. payrolls and average wages rose in January, expected to add to this week's U.S. data, which could lift Dow futures. Short-term Dow futures move to adjust for gains, with a target of 28855 or 28695 support. If combined with coming U.S. data release or any good news on signs of economic recovery, Dow futures could test 29,415 resistance.

BTCUSD:
10800 / 11250 resistance
9850 / 9600 support
U.S. job data rose much more than expected, it could foresee the Dow futures rebounded, back to record high 29400 levels. Keep watching the Dow future and global stock indexes. If Dow fall, the bitcoin price could up. 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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