The following article was written by ATFX Chief Analyst of Asia Pacific, Martin Lam.
Personal opinions today:
The British Prime Minister will submit a draft of the Brexit to the Congress on January 29. It is expected that the new draft will be partially revised and it is expected that Congress will accept it. The pound rose against the dollar and was tested at 1.29. In theory, if the new draft passes the opportunity, the pound against the dollar will likely test more than 1.30. If the European Parliament accepts the draft and leaves the EU as scheduled, it is estimated that the exchange rate of the British pound will rise even higher. And in this case, it is expected to boost the European currency because reduced the risk of Brexit, the gold will have a chance to fall and the stock market will rise.
In the short-term, the market is concerned about the European Central Bank’s interest rate meeting on Thursday, on the future monetary policy orientation. At that time, the speech of the ECB president will become the focus of the market, and the fluctuation of the euro will arise. In addition, the main data today include: UK job data, Germany and the Eurozone economic sentiment index, Canadian wholesale inventories, manufacturing new orders and US existing home sales. As always, UK job data and US existing home sales are more noticeable.
Due to the US holiday relationship yesterday, the US crude oil inventory report will be released on this Thursday, not tomorrow!
During the US holiday yesterday, the euro steady. Today’s European economic data is more concerned by the market. Looking back at the recent weak performance of the Eurozone economic data, the euro has accumulated a decline against the US dollar. And on Thursday, the European Central Bank announced interest rate monetary policy, the market is concerned about whether the European Central Bank is more biased towards doves, so that the euro continues to fall against the dollar. At present, the trend of the euro remains on the sidelines, and the exchange rate is expected to remain within the 1.13 level. However, if the exchange rate of the pound rises significantly, the euro will likely test the level of 1.14, please pay attention to trading risks.
The British Prime Minister will submit a new draft of the Brexit to the British parliamentarians to discuss next Tuesday, the market is expecting new direction, support the rise in the pound exchange rate. Technically, the important resistance of the pound remained at 1.30 and the important support at 1.2805. If the short-term break through 1.28 support, the next look may be 1.26. In addition, if the issue of Brexit remains unfinished, it is probably more difficult for the pound to break through the 1.30 too much.
The European economic data is weak, the euro is falling, and the Swiss franc is indirectly negative. Technically, the US dollar against the Swiss franc is now likely to test 1.00. Before the challenge of 1.0015, the technical need to see the resistance of 0.9985. In addition, it is necessary to pay attention to whether the trend of the euro will change and drive the Swiss franc.
Yesterday the US Dow closed, the Nikkei index steady, and the USD/JPY performed steadily. Today, if the US Dow and the Nikkei continue to rise, it is estimated that the dollar will rise against the yen. Technically, USD/JPY will have the opportunity to maintain above 109.30. If the market risk continues to cool down, the stock market will rise, and the USD/JPY is expected to test 110.
Yesterday, China announced its fourth quarter GDP data. Before the data was released, the Australian dollar fell and fell to around 0.7145. At present, China’s data is still in line with market expectations and determines the market sentiment. However, the technical analysis remains unchanged. If the Australian dollar remains above 0.7145, the Australian dollar can still perform well, but if it falls below 0.7145, it must pay attention to further adjustments to the important support such as 0.7115 and 0.7080.
The New Zealand dollar fell following the Australian dollar. It is recommended to continue to pay attention to the US dollar and Australian dollar trend reference without the current New Zealand data reference. After the release of China’s economic data yesterday, we can pay more attention to the progress of the Sino-US trade agreement and grasp the New Zealand dollar trading strategy.
Crude oil futures prices continue to make good, offsetting the negative growth of the Canadian economy, but still can not improve the bearish Canadian dollar. At present, the technical breakthrough of 1.3295 resistance, it is possible to continue to extend to 1.3330, and even rebounded 38%, to 1.3365 resistance. But if the crude oil price breaks through the $55 resistance, there will be a chance to pull the dollar against the Canadian dollar to 1.3235/1.3215.
Britain’s Brexit needs to make progress, ease market tensions and boost the pound. On the contrary, the Eurozone data is still weak, the monetary policy tends to be dovish, and the euro falls against the pound against the euro. Technically expected 0.8850 resistance, if it can break through, look up 0.8880 and possibly extend to 8925. If the support level breaks 0.8795, it will probably test 0.8735. It is recommended to keep an eye out for big changes!
The euro was slowed down against the Swiss franc and continued to rebound last week. Technically, focus on the important resistance of 1.1345. If it continues to rise, it may challenge 1.14. Please keep an eye on the European Central Bank’s monetary policy this Thursday night, whether it will bring the euro to a weak position and change the trend of the euro against the Swiss franc.
At present, the risk of Brexit has cooled down, and the market is waiting for the British Parliament to discuss again next Tuesday, the gold price adjustment. Technically, if the price of gold exceeds $1,280, the price of gold may fall further. Today, the US stock market reopened after the holiday. If the stock market rises, gold will go down further. The key is that if the support level before 1277 falls, it is possible that gold will test 1274 or 1270 dollars.
US crude oil futures
Sino-US trade consultations are progressing well. Earlier US crude oil inventories fell and OPEC could reduce production capacity, causing crude oil prices to continue to rise. Yesterday, Russia also said that it cut production, once again boosting crude oil prices. Only the market is worried about the lack of motivation in Europe and China’s economy. When investing, it must be noted that crude oil prices may limit the increase and have the opportunity to adjust the decline.
US Dow Jones Industrial Index Futures US30
Seems good progress has been made in Sino-US trade consultations. The Fed may suspend interest rate hikes, which will benefit the investment climate and keep the stock market rising. China’s GDP is in line with expectations, and the market sentiment is expected to support the rise of the US Dow. However, it must be noted that the performance of US corporations is announced, the stock market is subject to large fluctuations, and please careful when trading.
3470 / 3380 support
3750 / 3950 resistance
Under the Fed monetary policy forecasts for the cryptocurrencies. If the US Dow index keeping up, which is negative for the crypto market. If the Dow go down, it maybe support the crypto currencies rebound. Technically, the bitcoin price will testing the support at 3470. If rebound, the first target maybe set at 3750.
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.