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ATFX Market Outlook, 2019 September 12

 

Personal opinions today:

 

The President of the United States and his administration announced the two important announcements yesterday. First, the U.S. eased sanctions on Iran, and the market expected an increase in crude oil supply, leading to a decline in crude oil futures prices, which indirectly hurt the Canadian dollar. Second, the U.S. government delayed by two weeks raising tariffs on $250 billion of Chinese imports. The planned extension is expected to pave the way for high-level talks in October. The investment climate improved sharply, with the Dow closing up to near its July high. Dow futures rose, gold and silver prices and the yen fell. The news boosted China's currency, the Australian and New Zealand dollars, as well as regional stock markets.

 

Two big announcements today, the European central bank's interest rate decision, ECB President Mario Draghi held a press conference and the US monthly CPI rate in August update could cause market volatility. First, before U.S. trading, the European central bank announced its decision on interest rates, with expectations that the ECB would choose to cut rates and launch a new round of TLTRO. After that, the European central bank press conference. It is believed he will quote the contents of the resolution and the monetary policy and outlook of the European central bank, and name of the next ECB President. The Euro could be boosted if the European central bank starts a plan to cut interest rates and raise funds, which would help to lift investor pessimism about the European economy and boost investment. Besides, the number of U.S. jobless claims last week and the revised U.S. CPI for August will weigh on the dollar's performance. Meanwhile, the August CPI data reflects current U.S. inflation, which could influence market expectations for the federal reserve's policy meeting next Thursday. Gold is expected to fluctuate against the Euro and other European currencies today, which is more likely to lead to volatility in Dow futures and crude oil prices.

 

[Important financial data and events]

Note: * is the degree of importance

 

14:00 German August CPI final value **

14:45 French monthly CPI for August *

16:00 IEA releases monthly Oil market report **

17:00 Eurozone industrial output for July *

19:45 European central bank interest rate decision ***

20:30 ECB President Mario Draghi holds press conference ***

20:30 U.S. jobless claims last week **

20:30 U.S. CPI rate in August ***

OPEC and non-OPEC JMMC meeting **

 

Today suggestion:

 

Eurodollar

1.1080/1.1105 resistance

1.0085/1.0060 support

The Euro fell after hitting an average of just 20 days of resistance for several days in a row as markets awaited a meeting of the European central bank in anticipation of a policy easing and interest rate cut. Today's European central bank interest rate is a crucial moment. If the ECB starts the relevant economic stimulus package, the Euro could boost the rise. Also, the market is looking to August U.S. inflation data CPI results. A stronger dollar could limit the euro's gains if the data beat expectations by 0.1% or were flat. Current technical trends are expected, the Euro fell before the European central bank's interest rate, after the results may rebound.

 

Pound against dollar

1.2365/1.2380 resistance

1.2295/1.2280 support

There was no UK data today, but the European central bank's interest rate results and the euro's volatility could indirectly affect British pound. The risk of a no-deal Brexit is cooling as Britain waits for a better deal before an October 31 deadline. Besides, the market is looking at August U.S. inflation data CPI results and the performance of the dollar. Technically, please pay attention to 1.2400 significant resistance and 1.2280 crucial support. If pound break 1.2280, the trend may fall further.

 

Australian dollar to US dollar

0.6885/0.6905 resistance

0.6845/0.6830 support

The government of the United States has extended tariffs on 250 billion dollars worth of Chinese imports, easing the trade war and bullish the Australian dollar. The market is watching U.S. August inflation data and the performance of the dollar today. If the CPI meets or beats expectations, it could support the U.S. dollar's rise, putting downward on the Australian dollar. Technical resistance levels keep an eye on 0.6885 and 0.6905. If you want to adjust the support bit, please refer to 0.6845 or 0.6830 support. It is believed that the New Zealand dollar will continue to follow the trend and pace of the Australian dollar against the US dollar.

 

Dollar to yen

108.15/108.35 resistance

107.75/107.55 support

Good news from the US President, Iran sanctions and easing of the China and US trade war, bullish Dow and Nikkei futures to rise, while the dollar strengthened against the yen. Besides, Japan's economic activity index fell broadly today, with only a rebound in Japanese machinery orders limiting the yen's decline. Technically, the resistance level is expected to rise to 108.15 to 108.35, assuming Dow and Nikkei futures continue to rise during Asian and European trading hours. Note, given the performance of CPI data for August in the United States today. If the information is estimated to be lower than the previous value, the result may be lower than the previous value and expectations, Dow and Nikkei futures may fall and believe in leading the dollar to fall against the yen.

 

US dollar to Canadian dollar

1.3200/1.3225 resistance

1.3160/1.3140 support

After the release of the OPEC and EIA monthly oil market reports, the US President said easing sanctions on Iran could boost oil supplies and prices. A rise in Canada's second-quarter capacity utilization rate and a drop in U.S. producer prices in August limited the Canadian dollar's decline, suggesting that the U.S. CPI results from today and the prospect of easing news, bullish crude oil futures.

 

US crude oil futures

57.05/57.60 resistance

55.90/55.60 support

Crude oil prices were supported by sharp declines in U.S. API and EIA inventories and positive outlooks in OPEC and EIA monthly crude market reports. But the price of crude oil has been sharply revised after the US President said easing sanctions on Iran could boost supplies. Technically, crude oil prices lost reference support of 57.05, and the 10-hour average was pulled down. The trade war easing, the United States economic data well, bullish crude oil futures. Test 57.05 resistance. Technical support bits can be referred to 55.90 and 55.60 support.

 

Gold

1500/1502 resistance

1487/1485 support

The market looked ahead to U.S. retail sales data for August and U.S. retail sales data for tomorrow, as gold prices consolidated at low levels ahead of the European central bank's interest rate hike. The European central bank's interest rate decision today, the strength of its monetary easing policy and the outcome of the US CPl. If the European central bank cuts interest rates by more than 0.2% and U.S. CPI falls over expectations, there are opportunities to rally gold. Note Dow futures, if up, gold price short term focus on $1487 and $1485 support. In contrast, Dow futures fell, and gold prices are expected to test resistance at $1,500 and $1,502. Or it could break the 1,502 to $1,510.

 

U.S. Dow Jones industrial average futures US30

27360/27520 resistance

27075/26860 support

The trade war eased, investment sentiment improved, the British parliament successfully prevented a no-deal Brexit and avoided re-election, and the United States eased sanctions on Iran. These factors are reflected in Dow futures rose. Markets are waiting for U.S. August CPI data today and retail sales data tomorrow, as well as the latest comments from the President and the Fed, to see where the Fed's monetary policy is headed next week. Dow futures are expected to have a chance to limit their gains; the key is US CPI data performance today. If Dow futures break 27075 support, there is a chance to test the lower recommendation support, 26860.

 

BTCUSD:

10350 /10550 resistance

9850 / 9600 support

The market expected the FOMC might hold monetary policy decision in September. It could keep the interest rate, the bitcoin price fell. Incoming, we have to look at the Dow future. If Dow future fell, the bitcoin price and cryptocurrencies would upward. Now, the market is looking at the first support US$9850 or next support US$9600.

 

Enjoy trading! The content is for reference only. Please do ensure that you understand the risk.