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ATFX Market Outlook, 2019 Dec 10

 

Personal opinions today: 

 

China's consumer price index rose in November, without food prices still rising nearly 0.77%. The results will reflect the fact that inflation in China is increasing again, reflecting the fact that China's economic growth is moderate and not affected by the U.S trade with China. That kept the Japanese yen and the Australian dollar in positive territory. However, China's inflation is moderate, bullish gold prices, but crude oil prices downward. This week, the FOMC and the ECB will be the focus of the market. In the short term, limit gold and crude oil price volatility. More likely to affect the investment climate, limit the Dow upward.

 

Afternoon in Europe, markets focused on U.K. trade account, industrial and manufacturing output and the ZEW economic sentiment index for Germany and the Eurozone in December. Tonight, only one U.S. financial data, it is NFIB small business confidence index for November. As the economic data impact is not high, there is not much impact on the dollar index. However, the outcome of the data can reflect the short-term investment and consumer confidence, more likely to affect the Dow futures performance, thus indirectly gold and silver prices and crude oil price volatility. Crude oil prices were affected by the data, which reflected the EIA's monthly short-term energy outlook and API crude inventory change expectations.

 

[Important financial data and events] note: * is important

 

09:30 China CPI annual rate **

15:45 French industrial output *

17:30 U.K. trade account ***

17:30 UK industrial and manufacturing output **

18:00 German and Eurozone economic sentiment index ***

19:00 U.S. NFIB small business confidence index *

The next day 01:00 EIA monthly energy outlook *

The next day 05:30 API crude oil stocks change ***

 

EURUSD

1.1075/1.1085 resistance

1.1030/1.1020 support

The market looks to the afternoon economic data in Europe, which helps to reflect the Eurozone financial performance, affecting the Euro. The Euro was stronger yesterday amid market forecasts for growth in Germany and the Eurozone. Technically, however, the Euro remains limited to $1.1075 and $1.1085 resistance. If the data does not come as expected, markets will compare the strength of the U.S. economy to that of the Eurozone in the face of interest rate decisions by the FOMC and the ECB. With dollar strength, EURUSD has a chance to try $1.1030 or $1.1020.

 

GBPUSD 

1.3170/1.3189 resistance

1.3075/1.3065 support

Before the UK parliamentary election, although the market will continue to pay attention to the performance of the UK data today, driving pound exchange rate volatility. Pound downside is likely to be higher if it takes advantage of the recent surge in U.S. job data and growth in the economy to drive dollar strength. The market is watching the UK economic data show a month-on-month increase, supporting the pound. However, if financial data is only in line with market expectations, the pound has limited room to rise and raises hopes that the Fed will hold rates steady and uncertainty over the UK parliamentary election, the pound could have more place to fall. Technically, look for short-term resistance 1.3170 and significant resistance 1.3205. If the dollar remains strong, the pound could test important support against the dollar, with targets for initial positions at $1.3075 and $1.3065.

 

AUDUSD 

0.6835/0.6845 resistance

0.6800/0.6790 support

Reserve Bank of Australia (RBA) chairman said the economy was still not growing significantly and looked ahead to 2020. The RBA is still likely to cut interest rates next year as inflation fails to match. The Australian dollar to USD was limited to 0.6850 on the RBA comments. Technically, AUDUSD resistance is 0.6840 or 0.6850. The Australian dollar has a chance to test its lows against the U.S. dollar amid uncertainty over U.S. trade tariffs.

 

Dollar to Japanese yen

108.90/109.05 resistance

108.55/108.45 support

The Japanese yen rose after Japan reported a revised annualized Q3 real GDP and a rise in October's trade account. But the U.S. jobs data could lift the dollar against the Japanese yen. Generally, if coming to the Dow futures and Nikkei index futures. Besides, if the U.S. President can express more positive on trade negotiations news, especially for the new tariffs policy on China can be extended for a more extended period, to bullish the investment climate. The Dow futures rally, the dollar against the Japanese yen is expected to the 109 level.

 

USDCAD 

1.3245/1.3255 resistance

1.3200/1.3190 support

OPEC and partner announced extended production cuts until the end of 2020, which is expected to bullish crude oil prices, bullish the Canadian dollar as well. The market is watching to see if the US President will extend the time to impose additional tariffs on China and release US crude oil inventory data reduced tomorrow. The U.S. dollar fell to the 1.31 level against the Canadian dollar if crude oil inventories fell. Technically, first phase support bit, 1.3200 or 1.3190.

 

US crude oil futures

59.60/59.80 resistance

57.70/57.50 support

The market looks ahead to release of U.S. crude oil inventory data and the U.S. plan to impose additional tariffs on China. If any good news, it could be bullish crude prices. Technically, look up to target 59.60 or 59.80 resistance. It would believe that if the market continues to lack more good news, the current price of crude oil rose to near $60 resistance, there is a chance to go lower, below the $57 or $56 level.

 

Gold

1463/1465 resistance

1458/1456 support

Gold prices were capped up and down as markets watched the FOMC set rates this week and were expected to keep them on hold. But if there is any change in U.S. trade tariffs with different countries, special China import goods tariffs.  Also,  the market waits and sees U.S. President makes any comments to the FOMC on monetary policy, let gold price volatility. It is better keeping an eye on the Dow futures, following the market reaction and the gold price movement. Technically, if the gold price doesn't break through the $1456 support level, it's still possible to test the 1465 resistance. Overall, without any stimulus from rhetoric or political contingencies, gold's gains this week are expected to be limited as the FOMC holds rates steady.

 

U.S. Dow Jones industrial average futures US30

28015/28210 resistance

27620/27540 support

Concerns about U.S. and China trade negotiations, limiting the scope for Dow futures. Also, most investors worries about the U.S. President's comments on the FOMC monetary policy caused volatility in Dow futures. Technically, 27620 is a significant support level in the first phase of a Dow futures correction. Significant resistance notes the November high 28210 resistance.

 

BTCUSD:

7750/ 7885 resistance

7150/ 7050 support 

Before the end of the year, the cryptocurrency demand still declines, bearish Bitcoin price and limited US7885 resistance. If Dow future fell, it could bullish cryptocurrency and the bitcoin price could rebound. Technically, it would be looking at US7150 or US7050 support in the short term.

 

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