The following guest post is courtesy of ATFX Chief Analyst of Asia Pacific, Martin Lam.
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Personal opinions today:
The Sino-US Trade Ministerial Meeting was reconvened today, continuing the Sino-US trade negotiations between the G20 summit last year. The market expects the Sino-US trade truce and reached a complete truce, cancelled the trade to impose additional tariff policies, and promoted the dawn of global economic recovery. If the initial negotiations bring constructiveness, global stock markets and Asia Pacific currencies are expected to continue last week's gains, gold and silver may continue to adjust downwards, while crude oil prices are expected to rise. Of course, trading risks exist, keeping in mind the position and control of funds, strictly maintaining stop losses and avoiding excessive losses.
Looking back last week, the US officially announced that in December last year, non-farm payroll were reported to be 312,000, which was much faster than market expectations, but the unemployment rate rose to 3.9%. The US Department of Labor explained that because of the peak season and holidays, the demand for jobs has increased, and more people are looking for jobs and pushing up employment, leading to an increase in unemployment rate. Of course, the market more focus on the average hourly wage performance. The average hourly wage rose to 0.4% in December, and the annual rate also found a slight increase. It reflects that the United States will likely continue inflation, but Federal Reserve Chairman Powell released the "doves" speech, which cooled the dollar.
This week, the US released CPI inflation data for December, and the market attaches great importance to it. In addition, today the US announced November durable goods orders, factory orders and the December service sector purchasing managers index. These figures are expected to reflect US US economic growth and inflation expectations, and investors may refer to relevant data to anticipate the short-term movement of the US dollar.
The US average wage rose in December, and the euro fell. However, the Fed's "doves" remarks caused the dollar to fall and the euro to rise against the dollar. This afternoon's Eurozone investor confidence index and retail sales data performance is worthy of attention. In addition, the Italian central bank will announce the balance sheet tomorrow. A number of important news above may put the current euro downside risk. Technically, the euro resistance of 1.1425 and 1.1445 against the dollar. 1.1355 is important to support.
The risk of Brexit has not yet been lifted. The British Prime Minister intends to postpone the draft of Brexit and submit it to Congress to temporarily ease the risk of falling pounds. However, the risk of Brexit remains unresolved and attention must be paid to the resistance of 1.2770. If any problems created, the pound may fall back at any time. When investing in pounds or related crosses, we must pay attention to the risks!
The Fed chairman released the dovish remarks, and the dollar fell, indirectly causing the Swiss franc to rise. According to recent technical analysis, the US dollar against the Swiss franc may stop before the 0.9800 support level, and currently can pay attention to 0.9830 important support.
US job data has improved, making the dollar rise against the yen. But the Fed chairman released the dovish speech, limiting the dollar to the yen. The Sino-US trade negotiations began in the day. If progress is made and the stock market in the Asia-Pacific region rises, it is expected that the US dollar will continue to rise against the yen. The short-term USD/JPY is concerned about 109 resistance.
Last week, the Federal Reserve Chairman released the dovish speech, the dollar fell, indirectly boosting the Australian dollar, and broke through multiple resistances in one breath, rising to above 0.71. But don't forget that there have been expectations in the Sino-US trade war negotiations, which has caused the Australian dollar to rebound at a low level. If today's meeting
between China and the United States makes clear progress, the Australian dollar will have a chance to test 0.72 against the US dollar. Otherwise, we must pay attention to adjustments and be careful not to test below 0.71.
On Friday night, the Fed chairman released the dovish remarks, and the dollar fell, indirectly boosting the New Zealand dollar. The New Zealand dollar followed the Australian dollar against the US dollar to break through multiple resistances and rose above the resistance of 0.67. If the Sino-US meeting today has made clear progress, the New Zealand dollar will have a chance to test 0.6785 against the US dollar, otherwise it will be adjusted to below 0.67.
Strong growth in US job data means that production and consumer demand is expected to increase. The Sino-US trade war has once again resumed, and it is expected to promote the normalization of international trade, increase the demand for crude oil, boost the crude oil prices, and bring benefits to the Canadian economy. On Wednesday, the Bank of Canada raised interest rates and the market expects a rate hike of 0.25%, which has caused the Canadian dollar to continue to rise in the near term. Note that Canada's interest rate hike is already reflected in the price. If there is no further breakthrough in oil prices, the Sino-US trade negotiations will continue in place, which may lead to the near-completion of the US dollar against the Canadian dollar,
paying attention to reversing the risk.
The risk of Brexit is expected to cool, and the pound is rising against the dollar, which is greater than the euro against the dollar, causing the euro to fall against the pound. But keep in mind that this week, the euro zone announced a number of important economic data, if the euro zone economy is strong, the euro will be expected to rise against the pound. Technically, if the euro can maintain above the 0.8965 support level against the pound, it is estimated that the euro has a chance to rise against the pound.
The movement of the euro and the Swiss franc followed the performance of the US dollar, and the trend was similar. Without significant differences, the euro remained in a narrow range against the Swiss franc. However, this week, the euro zone announced a number of important economic data. If the euro zone economy is strong, the euro will be expected to widen against the Swiss franc and have the opportunity to bullish the euro against to the Swiss franc. However, please keep in mind that the data results bring trading risks.
US job data much higher expectations in December, once led to the dollar and the US Dow rose, the price of gold fell nearly USD15. But the Fed chairman released the dovish speech and indirectly boosted gold. At present, we continue to pay attention to the comments of many Fed officials during this week. If we continue to make dovish speech, we will have the opportunity to drive up the price of gold. On the other hand, the market is concerned about the resumption of Sino-US trade negotiations. If progress is made, it will help the stock market to rise, which indirectly will bring the risk of falling gold. It is currently recommended to focus on 1280 as an important support.
US crude oil futures
OPEC began to cut production this month, and the Sino-US trade war is easing. It is expected that the negotiations will have a chance to succeed, bring up demand for crude oil, and have the opportunity to brew a rebound in oil prices. The market is waiting to see if the current ministerial-level meeting between China and the United States will bring any news, and it is believed that it may affect the price of crude oil.
US Dow Jones Industrial Index Futures US30
Some departments of the US government continue to stop operating. In addition, US public companies are forecasting pessimistic outlook. Under the US corporate results announcement in the January period, psychologically may affect the investment climate. It is estimated that the US Dow still has downward. In the market, the current Sino-US trade war has eased, and at the same time, it is expected that initial progress will be made and investment sentiment will heat up, causing the US Dow to rebound. Technically, if the US Dow fails to test the resistance at 24025,
the stock market has a chance to fall.
4110 / 4200 resistance
3750 / 3650 support
US dollar weaker since the market seems increasing the market risk. It could be positive for the crypto currencies. Early market opened today, the Bitcoin hit US4100. Under the market risk, the Bitcoin probably test US4100 or US4200 resistance. Keep watching the range of the momentum, and looking any breakthrough.
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.