ATFX Market Outlook, 2018 Oct 16

Personal opinions today:

Many bad news from the United States recently. US durable goods orders, wholesale sales and manufacturing  growth, the US New York Fed manufacturing index showed growth in October. However, in the past two weeks, the US consumer data has fell, such September consumer price index and the University of Michigan consumer confidence index. The September US retail sales data, from the original expected to grow to 0.6%, the result was only 0.1%. It shows that the US consumer market is cooling down and overproduction, the fourth quarter of the US business operations and earnings will face more challenges, so the US Dow continues to fall is also very reasonable. Moreover, the Trump’s government once again provoked political tensions. After planning to impose sanctions on Iran, it threatened to impose sanctions on Saudi Arabia.

Since the beginning of the second quarter of this year, the United States has engaged in trade wars with Europe and Asia, and then imposed sanctions on countries in the Middle East. Various factors have affected the prospects of US companies and brought operational pressure. More importantly, the US fiscal deficit has continued to expand. In 2018, it increased by 779 billion US dollars compared with the same period of last year, up 17% year-on-year, and national debt expenses increased by 14%. It is expected that before the end of the year, the US fiscal deficit will force the government to deal with raising the debt ceiling, otherwise the US will face a halt. All these disadvantages continue to be bearish.

Today China announced the September consumer price index CPl. In the afternoon, the European region announced German import and export prices, Italian industrial orders and industrial sales. Eurozone October economic sentiment index and quarterly trade account for the euro zone. Most importantly, the UK will announce the September employment report this afternoon, which may affect UK inflation data and retail sales expectations for the next two days.

In addition, on October 17 and 18, the EU summit will be held. The results of the UK and EU Brexit agreement will be announced and will bring market volatility. The pound fell as there were rumors that the Brexit agreement was still divided. The euro against the pound has once seen a high of 0.8825.

Today's suggestion:

EURUSD

1.1615/1.1630 resistance

1.1565/1.1550 support

US retail sales in September were lower than expected and other bearish US factors were bullish for the euro. The euro has remained technically above the 1.1520 support level and the performance has increased. However, it is still waiting to see the next two days, the Eurozone data and the outcome of the Brexit negotiations,  the euro's performance is highly volatile.

GBPUSD

1.3175/1.3195 resistance

1.3100/1.3085 support

On the EU summit on Thursday, there have been rumors in the market over the past weekend that the content of the negotiations is still divided, and the pound is bad. The US inflation and consumer market slowed down, and the US political outlook made the market worried about the performance of the US dollar. In the next two days, the UK has important economic and inflation data released. In addition, the market waited for the conclusion of the Brexit negotiations, the pound was watched, and any news affected the volatility of the pound exchange rate.

USDCHF

0.9885/0.9900 resistance

0.9850/0.9835 support

As analyzed yesterday, if the result makes the market unexpected, the US dollar against the Swiss franc will be affected and fluctuated. If there are any gaps in US retail sales results, note that the US dollar has increased volatility against Swiss francs. Finally, the US announced retail sales in September, which disappointed the market and the dollar fell against the Swiss franc. The short-term performance of the Eurozone economic data indirectly affects the trend of the Swiss Franc. It is recommended to pay attention to the Eurozone data in the afternoon.

USD/JPY

112.20/112.35 resistance

111.65/111.50 support

The Japanese government decided to raise the consumption tax to 10% next October, and Japanese companies and consumers expressed concern. Japan’s Nikkei index fell, dragging the dollar down against the yen. Coupled with the US retail sales data in September, the cold market is disappointing, the short-term US dollar performance is weak, and the USD/JPY is likely to continue its downward development.

AUDUSD

0.7150/0.7175 resistance

0.7115/0.7100 support

US retail sales in September disappointed the market, the dollar fell, and the Australian dollar was bullish. The performance of the Reserve Bank of Australia is optimistic about Australia's economic growth and will help boost the Australian dollar. However, short-term attention must be paid to China's data performance and copper price performance during the week. And must also pay attention to the outcome of the Brexit negotiations.

NZDUSD

0.6595/0.6610 resistance

0.6555/0.6540 support

US retail sales in September disappointed the market, the dollar fell, and the New Zealand dollar. The performance of the Reserve Bank of Australia is optimistic about Australia's economic growth, which will help boost the Australian dollar and indirectly benefit the New Zealand dollar. And must also pay attention to the outcome of the Brexit negotiations.

USD/CAD

1.3045/1.3060 resistance

1.2990/1.2975 support

The oil price trend is still optimistic, rising from the level of 70 US dollars to 71 US dollars, and the Lido dollar. In addition, a number of Canadian economic data released this week, the market expects to continue the recent growth of Canadian economic data, Lido Canadian dollar. In the short-term trend, we must pay attention to the development of oil prices or the outcome of the Brexit negotiations, which also affects the performance of the Canadian dollar.

EUR/GBP

0.8825/0.8840 resistance

0.8785/0.8770 support

The euro is trading better than the pound, with a bullish euro against the pound. The reason is that the market rumors that the Brexit negotiations are still divided, the pound fell and the euro remained strong, making the euro develop against the pound. In the next two days, the UK and Eurozone economic and inflation data, the euro against the pound may move.

EURCHF

1.1450/1.1475 resistance

1.1415/1.1400 support

The market is concerned about the euro zone consumer price data this week, the market is expected to win last month, the bullish euro, the euro against the Swiss franc. Technically, the euro against the Swiss franc short-term adjustment to 1.1415 support after the stability, will have a chance to rebound, test the recent high.

XAUUSD

1234/1236 resistance

1226/1224 support

A number of bad news have stimulated gold to rise. The political relations between the United States and Saudi Arabia are tense, the market’s timid warfare is on the verge, and safe-haven capital flows in, boosting gold. In addition, the US retail sales data for September has not improved, inflation expectations have cooled, and bullish gold. Technically, gold broke through the resistance of $1226 and the trend turned stronger. Short-term factors should be noted to prevent changes in the trend, and the outcome of the Brexit negotiations is also worth considering. Before the results are announced, it is estimated that gold will continue to support. But if good news is announced, gold may fall. In addition, the performance of the US Dow also affected the gold. Keep watching the market update.

US crude oil futures:

72.05/72.50 resistance

71.05/70.75 support

Earlier, US politics and Sino-US trade uncertainty and crude oil inventories increased sharply, and oil prices fell from last week. Recently, political factors have changed, and the market is worried that the supply of crude oil will be affected and boost the price of oil. In addition, seasonal demand is expected to increase, and crude oil prices have the opportunity to test high.

BTCUSD:

6680 / 6750 resistance

6280 /6060 support

The performance of the US economy and fiscal deficits concerns. Also, the US CPI under the market expectations, the bitcoin rebound.  If any bad news from US, it will support bitcoin and may go high.

Hope you enjoy and have happy trade!  The content is for reference only. Please do ensure that you understand the risk.

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: cs.gm@atfx.com 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.