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ATFX Market Outlook, 2020 Jan 31

 

Personal opinions today: 

 

The Bank of England kept interest rates and monetary policy unchanged. The governor of the Bank of England said it would be difficult to raise interest rates in the face of Brexit and economic outlook uncertainty. Fortunately, the Bank of England did not explicitly signal a rate cut. Investors await tonight's official Brexit and UK prime minister Boris Johnson addresses the nation on Brexit. However, in the face of the UK's failure to fully resolve the post-Brexit process, another perspective looks like a hard Brexit, it is estimated that the pound will still be bearish.

 

In European trading, the Eurozone released its first-quarter GDP figures and its CPI in January. The above data, the market forecast to fall, bearish Euro or indirect impact on other European currencies. In the evening, the U.S. released the core PCE price index for December and the Michigan consumer confidence index for January. The market is expected to be flat as investors wait for data. The market is particularly focused on the final reading of the Michigan consumer confidence index for January. Please pay attention to the Dow futures volatility, monitor the investment sentiment.

 

[Important financial data and events]

Note: * refers to the degree of importance

 

09:00 China official manufacturing PMI ***

14:30 France GDP for the fourth quarter **

15:30 Swiss real retail sales *

15:45 France CPI monthly rate *

17:30 U.K. BoE mortgage license *

18:00 Eurozone Q4 GDP at an annual rate ***

18:00 Eurozone CPI monthly rate and annual rate **

21:30 U.S. core PCE price index **

21:30 U.S. personal expenditure *

21:30 Canada monthly rate of GDP **

22:45 U.S. Chicago PMI **

23:00 U.S.  Michigan's consumer confidence index  ***

At 06:00 the next day, the British prime minister addressed the nation on Brexit 

 

EURUSD

1.1050/1.1060 resistance

1.0105/1.0995 support

After the Bank of England rate decision, the pound rose, indirectly bullish Euro. Markets are waiting for British prime minister Boris Johnson to address the nation as Brexit begins. In Europe today, investors wait to see the first estimate of Eurozone GDP for the fourth quarter and the first estimate of CPI for January. Market forecasts are bearish on the Euro. On the other hand, the dollar could benefit from U.S. economic data tonight. As for the overall trend of the Euro, we must pay attention to how British prime minister Johnson expressed his determination to solve all problems and stabilize investor confidence after Brexit.

 

Pound to dollar

1.3100/1.3115 resistance

1.3050/1.3040 support

The Bank of England maintained interest rates and easy monetary policy, the bearish sentiment released, pound recovers short positions. Brexit start tonight, investors are focused on politics, border and trade agreements with the European Union. Tomorrow morning, prime minister Johnson will address the nation on Brexit. At that time, the British prime minister's remarks need to be considered, how to solve the problem of determination. Technically, it is believed that 1.3200 is an important resistance to pound, with short-term resistance still between 1.3100 and 1.3115.

 

Australian dollar

0.6735/0.6745 resistance

0.6695/0.6685 support

Financial institutions assessed the global economy slowdown, limited the Australian dollar growth. Technically, the current chart pattern, the AUDUSD running a head and shoulder top pattern, now below the neckline. If the 0.6785 resistance is not broken, it is still recommended to look down at the 0.6705 and 0.6685 important support bits.

 

Dollar to yen

109.20/109.30 resistance

108.75/108.65 support

Global equity markets were bearish on the dollar against the yen as financial institutions assessed first-quarter economic expectations for a decline. Fortunately, U.S. corporate earnings over investors expectation last night, boosting Dow futures and easing risk aversion, and the dollar followed stocks higher against the yen. But in Asia, China's official manufacturing PMI fell slightly in January, bearish on the dollar against the yen. The market is watching tonight's U.S. economic data, which will affect the dollar and indirectly the yen. Technically, if the USDJPY fails to break 109.35 resistance, it is estimated that it could test 108.75 or 108.65 support. Recommend keeping an eye on Dow futures trends.

 

USDCAD 

1.3220/1.3230 resistance

1.3165/1.3155 support

Recently, the U.S. President and the Canadian government signed a trade agreement, bullish for the Canadian dollar. But financial institutions assessed the slowdown in global resources in the first quarter. As one of the lifeblood of the Canadian economy, crude oil products, combined with seasonal factors, crude oil demand began to slow, indirectly bearish Canadian dollar. Current estimates for USDCAD are limited between 1.3155 support and 1.3230 resistance. It is recommended to pay close attention to oil price fluctuations to support us to trade the Canadian dollar.

 

US crude oil futures

53.85/54.15 resistance

52.35/52.05 support

Oil prices fell as financial institutions assessed signs of a slowdown in the global economy and a seasonal drop in demand for crude. The federal reserve and the Bank of England kept interest rates unchanged, which had been bearish for oil prices. Markets were already pricing in a fall in oil prices after the Bank of England's rate hike last night. Technically, U.S. crude oil moved above the moving average resistance in the hourly chart. If the trends continue to test resistance, watch for $53.85 or $54.15 resistance. Crude oil prices, also watch U.S. data tonight. Among them, the Michigan consumer confidence index in January’s final value, please pay attention.

 

Gold

1580/1583 resistance

1570/1568 support

Last night, Dow futures rebounded and gold prices fell. But China's PMI slight drop and investors expected drop in European economic data offer an opportunity to limit gold's decline. U.S. economic data is notable tonight, and gold has an opportunity to continue rising if weak data causes Dow futures to fall.

 

U.S. Dow Jones industrial average futures US30

28955/29025 resistance

28720/28645 support

The Fed kept interest rates unchanged, limiting gains in Dow futures. In addition, financial institutions forecast a global economic slowdown in the first quarter, believed to be bearish Dow futures. If U.S. economic data showed slows down tonight, Dow futures will continue to fall. Just in response to the U.S. corporate financial reporting cycle, Dow futures traded repeatedly. With the end of the financial reporting period for U.S. corporations, it is worth keeping an eye on seasonal factors, and Dow futures are in a period of adjustment, with estimates that the key support level for the 28130 targets could be tested.

 

BTCUSD:

9575 / 9800 resistance

9050 / 8800 support 

Most financial institutions forecast the global economic slowdown in the first quarter. Dow futures and Asian stock markets trading lower. Keep watching the Dow future and global stocks market indexes keeping downtrend, the bitcoin price could up.

 

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