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ATFX Market Outlook, 2019 Oct 22

 

Personal opinions today:

 

Brexit deal has been rejected by the house of Commons. If the British prime minister moves again this week, the pound is likely to rise again. However, the UK still has not approved the Brexit agreement, the risk of a fall in the pound, the expected adjustment of the euro and pound. Global stock markets could suffer. Risk aversion again and falling stock markets are likely to lift gold and silver prices again. But in the short term, the rise in gold prices has been limited by the easing of trade relations between China and US. Oil prices are expected to benefit. The market will wait and see tomorrow morning when API crude oil inventory data is released. If inventories fall, the price of crude oil will be more positive.

 

European central bank (ECB) monetary policy is widely expected to remain unchanged after its President Mario Draghi attended his last policy meeting and press conference on Thursday. But the ECB's new President, Christine, will take over on November 1, and the ECB has since formally restarted its TLTRO program in hopes of reviving the Eurozone's economy and opening up opportunities for recovery. Coming this ECB meeting, can again put forward the relevant research and release the implementation time to be watched by the market. If the ECB will come up with a plan, which is believed to be good for the future of the European economy, the euro has the support of investors. But normally, before something like this happens, the euro is expected to come downward this week before the decision. If the Fed cuts rates early, the dollar will fall, which could bullish the euro and, more likely, other currencies against the dollar and gold.

 

[Important financial data and events]

Note: * is the degree of importance

 

Tokyo stock exchange will be closed

18:00 CBI industrial orders in the UK **

20:30 Canada retail sales ***

22:00 U.S. existing homes sales **

22:00 U.S.  Richmond fed manufacturing index **

The next day 4:30 U.S.  API crude oil stocks change ***

 

Today's suggestion:

 

Euro to dollar

1.1165/1.1175 resistance

1.1100/1.1090 support

Brexit failure, bearish for euro. Yesterday, the British prime minister put a vote for Brexit again,but it was rejected, which is bearish for the euro. It is believed that the news of Brexit deal will continue to affect the pound and indirectly affect the euro. In addition, this week the European central bank monetary policy decisions, bearish sentiment, the euro may fall, adjust to 1.10 levels. If the Fed releases interest rate cut remarks, the euro will be bullish, which is likely to test 1.12.

 

Pound to dollar

1.3005/1.3055 resistance

1.2955/1.2905 support

The Brexit agreement submitted by the British prime minister to the British parliament was rejected by the speaker of the British parliament, which was bearish for the pound and failed to break through the resistance level of the rally wave 1.3005. If the British parliament again rejects the Brexit deal, British PM seeks a second referendum or the European commission does not give a delay to the Brexit deal, it may lead to bearish on the pound deeply. For references, 1.2840 is the current rebound wave support level, is concerned by the market.

 

Australian dollar to US dollar

0.6890/0.6905 resistance

0.6840/0.6825 support

Trade relations between China and the United States continue to improve. Representatives of the trade consultation announced the success of the first round of the negotiated agreement, which eased the investment sentiment and benefited the Australian and New Zealand dollars. But technically, last month's high of 0.6890 will be an important resistance level reference, currently maintain observation, beware of breakthrough failure, trend adjustment. If the Fed releases interest rate cut comments, bearish dollar, bullish Australian and New Zealand dollar.

 

Dollar to Japanese Yen

108.85/108.95 resistance

108.40/108.25 support

The Brexit deal failed to pass British parliament, the investment climate failed to increase and the dollar rose against the yen. Fortunately, improved trade relations between China and the United States led Dow and Nikkei futures to continue to rise, while the USDJPY may follow the stock market up to test 109 key resistance. But if Dow futures fall, the USDJPY will follow the trend. Technically, the USDJPY 108.95 is the current reference resistance. If the Fed makes interest rate cuts, it could be bearish for the dollar, but could bullish stocks market. It could still be bullish for the USDJPY.

 

U.S. dollar to Canadian dollar

1.3135/1.3150 resistance

1.3065/1.3050 support

The Canadian dollar rose after the Canadian election. Crude oil prices remain $52 support, crude oil prices rose, indirectly bullish Canadian dollar. The market focused on U.S. API crude oil stocks, estimated to be down from last week, bullish oil prices and the Canadian dollar. Technically, the USDCAD could return to 1.32 if crude oil futures prices fall after the USDCAD test on 1.31 supports the breakout. A Fed rate cut would be a bullish for crude oil prices and the Canadian dollar.

 

United States crude oil futures

54.10/54.40 resistance

53.15/52.80 support

News of the failure of the British parliament to vote on a deal to leave the European Union had been bearish for crude oil, and the price of the oil fell below the 52 dollar level. From fundamentals to apply the technical analysis, crude oil prices at or below 52 May be supported by investors, and the possibility of building long positions at these levels is noteworthy. The market is waiting to see if API crude oil inventories fall as expected, and crude oil prices are bullish in the short term. A Fed rate cut would help crude oil prices.

 

Gold

1490/1492 resistance

1481/1479 support

The successful trade talks and improved trade relations between China and the United States have bullish the stock market, while gold demand has dropped and gold prices have fallen. But with the Brexit deal not passed by the British parliament, the European central bank (ECB) raising interest rates and the Fed expected to cut interest rates, money could flow back into the gold market again, sending gold prices higher. Technically, it is worth paying attention to and referring to the Dow futures volatility and trend, how to drive the gold price trend and direction. If Dow futures fall, Asian stocks fall and gold falls at different times. Starting at 2 PM, watch the London gold market open, gold prices may rise in response to the above mentioned information.

 

U.S. Dow Jones industrial average futures US30

26940/27020 resistance

26720/26660 support

Dow futures failed to break through 27,000 points after Brexit failed to pass the British parliament. Also, U.S. economic data failed to meet market growth expectations. At present, the main support for the stock market, the first is the success of China and US trade negotiations. The second is that the federal reserve may cut interest rates. These two key points are likely to support the Dow futures move higher. Technically, Dow futures could still move higher if they maintain 26660 support.

 

BTCUSD:

8600/ 8850 resistance

7885 / 7655 support

As US economy slowdown, FOMC would consider cut Fed fund rate. It is supposed bullish for crypto currencies, such as  Bitcoin and other popular crypto currencies. After the weekend, the Brexit deal failed, the the crypto market could demand increasing. Technically, the bitcoin price support at US7885. Assuming the bitcoin price as followed the gold price. If FOMC and ECB would cut interest rate, bitcoin price could rise further.

 

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