The following article was written by ATFX Chief Analyst of Asia Pacific, Martin Lam.
Personal opinions today:
The European economy outlook and the Brexit process uncertainty, affecting the performance of European currencies. In addition, the market is waiting the development of Sino-US trade negotiations, investment sentiment is more concerned, and global stock markets are expected to remain conservative. The US Dow’s trend is still unstable, and safety funds may transfer to the gold, silver and the yen. At present, if the risk aversion continues to heat up, it is estimated that the price of gold will remain above 1,300 US dollars, and the USD/JPY may encounter obstacles at the 110 level.
Concerning the European currency performance this week. UK will announce a number of important data, which today focus on the UK’s fourth quarter GDP, then followed by the UK consumer price index and retail sales data. In addition, the Brexit situation is still unclear, and the pound still has a downside risk, even affected the euro and Swiss francs momentum.
The EU’s outlook for the economy is expected to be weak. At the beginning of this week, there was a lack of reference to the economic data of the Eurozone. The market may follow the important data of the UK to drive the Euro. Technically, the euro against the dollar resistance of 1.1380 is an important key. In addition, the important support level, 1.1285 is worth noting. The overall value of the euro is expected to be consolidated above or above this important support level. But you must pay attention to trading risks!
After the Bank of England’s interest rate decision last week, the Bank of England Governor expressed his pessimistic stance and affected the sentiment of the pound. It is worth noting the performance of a number of important data in the UK this week, with a focus on the UK’s fourth quarter domestic production GDP announced this afternoon. If the performance is better than the previous season, the exchange rate is expected to rebound, and the test level is 1.30. Of course, if the Brexit event is expected to become clearer in advance and the fundamentals are improved, the pound will be expected to further increase its gains. Technically, 1.3045 and 1.3060 are expected to be important resistance, but you must pay attention to trading risks!
The European economic data and prospects are weak, and the Swiss franc is indirectly dragged down. At the beginning of the week, the euro zone lacked economic data reference. If it is supported by important data from the UK or good news from Brexit, it is expected to help the Swiss franc. The overall Swiss franc value, the dollar against the Swiss franc is expected to consolidate at 1.0060, but must pay attention to trading risks!
Today’s Japanese holiday, the Japanese market is closed, but Japan’s Nikkei futures will still be affected by market news and atmosphere, driving the dollar against the yen. The market has been concerned about the trend of US Dow futures, driving the development of the Japanese Nikkei and the US dollar against the yen. Technically, if the relevant stock market falls, the USD/JPY can pay attention to 109.30 as an important support. On the contrary, the relevant stock market rises, you can pay attention to 110.15 as an important resistance.
Last week, the Australian Federal Reserve Bank’s monetary policy orientation was pessimistic, which caused the Australian dollar to fall. At present, the market is concerned about whether the Australian Federal Reserve Bank’s monetary policy orientation will affect the monetary policy orientation of the New Zealand Federal Reserve Bank on Wednesday morning, which will indirectly affect the decline of the Australian dollar. In addition, the next round of Sino-US ministerial trade negotiations will be held on Thursday. If the current negotiating relationship and good atmosphere between the two parties is good, it is expected to change the recent weakening trend of the Australian dollar. Technically, it is expected that the Australian dollar will be adjusted against the US dollar. At present, it will avoid falling below the 0.7020 support risk. If there is good news to break the resistance of 0.7135, the Australian dollar is expected to test the 0.72 level, but please pay attention to the short-term risks and fluctuations!
On Wednesday morning, the Reserve Bank of New Zealand announced the interest rate decision. The market will wait for the monetary policy orientation to follow the policy direction of the Reserve Bank of Australia and affect the downside risks of the New Zealand dollar. In addition, the atmosphere of the next round of Sino-US ministerial trade negotiations remains one of the key factors. If the atmosphere is good, it is expected to change the recent weakening trend of the New Zealand dollar. Technically, the 0.6805 resistance is very important. If this resistance is broken, the market sentiment will be improved and the New Zealand dollar will still have room to rise.
Crude oil prices were weak and prices fell to $52, which hindered the Canadian dollar from rising. Today you can pay attention to the performance of Canada’s national economic confidence index. In addition, pay close attention to the development of crude oil price adjustment. If crude oil prices continue to fall, the dollar will have a chance to follow the rise. The first important resistance is 1.3340, so stay tuned!
There are still uncertainties in the risk of Brexit, affecting the performance of the British pound. This afternoon, you can refer to the UK’s fourth quarter GDP GDP performance. If it beats the previous season’s performance and market expectations, it may cause the euro to fall against the pound. Technically, 0.8780 is an important resistance reference, so stay tuned!
The euro fell in response to the weak performance of the Eurozone economic data and the Dove of the European Central Bank’s monetary policy. Following last week’s analysis, the euro fell against the Swiss franc. At present, the Eurozone lacks economic data. The only reference is how the UK data affects the Euro. Please pay attention to the performance of the UK’s fourth quarter GDP in the afternoon.
The global economy predicts a slowdown and supports the rise in gold prices. If pessimism continues to heat up, it will cause the stock market to fall, stimulating the rise in gold prices. The initial technical resistance is $1316, so stay tuned! If the Sino-US ministerial meeting has a good atmosphere and the market risk aversion is cooling down, China and the US stock market will rise, and gold and silver prices are expected to adjust downward. It is recommended to pay close attention to the news and catch the market sentiment.
US crude oil futures
Sino-US trade talks will soon be held again, but the market is still worried about the slowdown in crude oil demand and crude oil prices continue to be affected. Technically, after the crude oil futures price has fallen below $54, the crude oil price continues to undergo a deep adjustment and may test for $50. Technically, if short-term crude oil prices fall below 51.75 support, the next level of support may be $50.80.
US Dow Jones Industrial Index Futures US30
The market is looking forward to the consultations between China and the United States on Thursday, and the relationship between the two sides has become the primary focus. Fortunately, the positive attitude of both sides is helping to improve the investment climate. In addition, the announcement of the performance of large US companies still affects stock market volatility and suggests careful trading. Technically, if the 24750 support is lost, the trend may further widen the decline.
3480 / 3280 support
3750 / 3950 resistance
The global economy predicts a slowdown and supports the demand of the cryptocurrency. If the cryptocurrencies keeping the demand and the dollar depreciation that will increase the demand for the cryptocurrencies, the price of bitcoin could be rebound further. The first resistance will test US3750.
Enjoy and happy trade! The content is for reference only. Please do ensure that you understand the risk. Wish Happy trading!
Information provided by ATFX, 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. Contact: [email protected] or wechat: ATFX_China
Legal: ATFX is a trading name of AT Global Markets Limited (ATGM, registration number 24226 IBC 2017). ATGM is an International Business Company in Saint Vincent and the Grenadines. Registered address is: the Financial Services Centre, Stoney Ground, Kingstown, St.Vincent & the Grenadines.