The following article was written by ATFX Chief Analyst of Asia Pacific, Martin Lam.
The Trump government of the United States announced last week that it has imposed an additional 10% tariff on Chinese imports worth US$200 billion. The renminbi is bearish. The negative news has caused the US dollar to see 6.86 against the offshore renminbi. The market expects that the US government has still not lifted the threat of trade war against China and continues to be negative for the renminbi and the Chinese stock market, with reference to the target of 6.90. Last week, the UK consumer price index, retail price index and seasonally adjusted retail sales in August last year beat market expectations. GBPUSD broke the resistance of 1.32 and challenged the key resistance of 1.33. It is a pity that the British Prime Minister and the EU Brexit diplomatic officials released negative news respectively, adding pressure to the negotiations and worrying about the risk of “hard Brexit”.
At one time, the price of the European and American exchanges fell from 1.18.
In the afternoon, Germany’s September IFO business climate index and the UK’s September industrial export orders are worthy of reference. However, the Brexit negotiations and news are updated daily and investors are worth noting. In the evening, the wholesale sales data of Canada in July had a direct impact on the trend of the Canadian dollar, which deserves attention. On the morning of Thursday, the Fed negotiated interest rates. The general market believes that it will raise interest rates by 0.25%, but whether the Fed can further raise interest rates in December is the key point. On behalf of the short-term US dollar trend is not a “one-off show”. Under the absolute advantage of the US dollar, the trend has a chance to fall further. And the trend of silver also has a chance to rebound.
The Fed’s interest rate this week, the dollar’s strength is expected to remain until the eve of the interest rate announcement. On the other hand, the European Central Bank is ready to stop the long-term bond purchase program, which means stepping up monetary policy, which is expected to narrow the spread between the two sides and benefit the euro. Short-term support can refer to 1.1735 and 1.1720. If there is a chance to fall to the 1.16 level, it is recommended to avoid excessive chasing to prevent the risk.
The decline in the pound’s US is mainly due to the fact that the EU and the UK’s Brexit negotiations are still full of obstacles. The unfavorable news often makes the pound and the US fall from a high position. After the fall of the pound last Friday, investors can consider establishing a long position in the low support range, hoping to use the negotiations to make progress and boost the pound. In any case, it is recommended to pay attention to the change in the trend and happens any trading risks.
Emerging market currencies rebounded last week, creating a rebound in European currencies. However, the obstacles to the Brexit negotiations in the UK have occurred, and the European currency has once again been negative. In any case, there is no Swiss economic data in the short term, and the performance of the euro is expected to lead the development of the Swiss franc. If the US economic data improves or the emerging market currencies fall, the US dollar may have an upward trend against the Swiss franc. It is recommended to pay attention to the trading risks brought by the trend change.
The US Dow and the Nikkei index rose, and the USD/JPY trend followed. Similarly, the US Dow and the Nikkei index fell, and the USD/JPY went down again. If the Fed raises interest rates this week, the stock market has a chance to fall. The important resistance of the USD/JPY is 113.15 or may not appear. USDJPY has a downside risk, it is recommended to pay attention to the short-term downward trend.
Earlier, global risk sentiment eased, emerging market currencies rebounded, and funds flowed out of US debt, causing the dollar to fall and the Australian dollar to rise. However, the short-term trend must pay attention to the performance of the US economic data and the Fed’s interest rate this week, which will cause the Australian dollar to decline at any time. AUDUSD has downsides risk, it is recommended to pay attention to trading risks.
The performance of the US economic data and the Fed’s interest rate this week, which will make the bearish to the New Zealand dollar, it is recommended to pay attention to trading risks.
Negotiations between the United States and Canada on North American trade agreements continue, and it is widely expected that there will be a final decision this month. If the two sides agree to a win-win situation, they will be in the Canadian dollar. In addition, the rise in demand for crude oil in the fourth quarter will help oil prices rise, which is one of the reasons for the bullish Canadian dollar. Canadian economic data tonight can be used as a short-term trend reference.
The analysis last week pointed out that the Brexit negotiations were unclear, and finally the euro rebounded from the low against the pound. At present, the euro is trading against the pound, and the most important thing is the prospect of Brexit negotiations. The outlook is uncertain, bullish EURGBP. Currently worthy of attention above 0.90, the euro reversed the risk against the pound.
The Brexit negotiations ended up with a bearish euro against the Swiss franc. At present, the most important is the prospect of Brexit negotiations. The EU negotiations broke down, and the positive for Swiss Franc, on behalf of the euro against the Swiss franc, has a chance to fall. However, if you chase at 1.1225 or below, now the risk is high and we must pay attention any trading risk.
Before the Fed raises interest rates, make gold prices fall. It is expected that the downward trend will continue to fluctuate on the eve of the announcement of the Fed’s interest rate announcement on September 27. However, the main point of view remains high and low buy, while paying attention to trading risks and fund management.
US crude oil futures:
US crude oil inventories increased, but Iran was sanctioned by the United States, restricting crude oil exports until the end of the year, the supply of crude oil was tight, and oil prices climbed. In addition, as the demand for crude oil increases at the end of each year, it is expected that the oil price will be more favorable. Under the earlier production reduction agreement, it is believed that it is unlikely to increase production and lower oil prices. And at the weekend, the oil group has also reflected that in the short term, it will not consider increasing production and bullish oil prices.
6720 / 6900 resistance
6450 /6260 support
The US Fed meeting on Thursday early morning, all investors assumed the interest rate up, the cryptocurrency could be negative and the price fall. Now may reach to recommend support.
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.