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ATFX Market Outlook, 2020 Feb 14

 

Personal opinions today: 

 

Germany CPI was flat in January, in line with market expectations, but failed to boost investor confidence. In Europe trading hours today, investors focused on Germany and the Eurozone Q4 GDP. The Eurozone was flat on expectations, German GDP would fall in Q4. The Euro and the Swiss franc have fallen on expectations from yesterday. Assuming that, the Euro and the Swiss franc could recover if the data come in line with expectations. It is because investors expected the U.S. retail sales in January and the Michigan consumer confidence index due out tonight, market forecasts are likely to be lower than last month's growth and more likely to slow. The dollar index has a chance to adjust, with the Euro expected to hold at the key $1.08 level.

 

Ahead of the release of U.S. retail sales and Michigan consumer confidence index for January, the weak pound had risen, gold price and commodity currencies such AUD and NZD had rallied and crude oil had been held back. Investors await tonight's results from U.S. retail sales and the Michigan consumer confidence index. In terms of trading techniques, investors are advised to look ahead to U.S. retail sales data at 21:30 p.m. to gauge the Michigan consumer confidence index. The dollar index and Dow futures are expected to have started to move after the U.S. retail sales data. In addition, next Monday is a U.S. and Canadian holiday, and U.S. markets could be volatile tonight, Dow futures and the dollar index have a chance to adjust the recent gains.

 

[Important financial data and events]

Note: * refers to the degree of importance

 

15:00 Germany GDP Q4 ***

18:00 Eurozone GDP Q4 **

18:00 Eurozone employment rate Q4 ***

21:30 U.S. retail sales monthly rate for January ***

22:15 U.S. industrial output in January **

23:00 U.S. business inventory rate for December *

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

 

Euro to dollar 

1.0880/1.0890 resistance

1.0820/1.0810 support

The Euro continued its downward trend against the dollar by the weak Eurozone economic data, even Eurozone data release today. The Euro fell further after breaking 1.0880 against the dollar, heading into a 250% correction in 1.0810 support. It is worth noting, however, that the dollar index is expected to correct after the U.S. retail sales data released tonight which could see the Euro recoup some of its losses.

 

Pound to dollar

1.3080/1.3090 resistance

1.2960/1.2950 support

After the pound fell to a three-month low of $1.2870 at the start of the week, the pound rebounded on comments from the Fed chairman. Yesterday, the pound over the key resistance level of 1.3000, the trend began to follow the 10-day average support and keeping up. Technically, the pound can test 1.3080 or 1.3090 resistance in a short rally. Assuming the pound could test $1.3120 against the dollar if U.S. data under expectations tonight. Conversely, if dollar strength returns, the pound could test support at $1.2950.

 

Australian dollar

0.6745/0.6755 resistance

0.6710/0.6700 support

The RBA and RBNZ keep the interest rates and their comments dispelled investors' expectations of a rate cut. In addition, believing the Australian and New Zealand dollars could continue to rise. In the meantime, however, investors should focus on U.S. economic data, indirectly affecting the Australian and New Zealand dollar gains. Technically, the AUDUSD key resistance 0.6755, 0.6800 as important resistance. Short-term significant support would be 0.6700.

 

Dollar to yen

110.10/110.20 resistance

109.75/109.65 support

U.S. CPI fell in January, but new claims for jobless benefits fell last week. Investors focused on U.S. retail sales data tonight, with the USDJPY hovering between 109.65 support and 110.20 resistance. If strong U.S. data reading tonight, Dow futures higher, the USDJPY could test 110.20 resistance. But after the U.S. data tonight, the dollar could adjust a bit.

 

USDCAD 

1.3280/1.3290 resistance

1.3220/1.3210 support

U.S. inflation data was lower than market expectations in January and assuming the U.S. retail sales data could be weak, indirectly affected the Canadian dollar. Technically, USDCAD could be limited to 1.3220 support. It is recommended to keep a close eye on U.S. retail sales data and crude oil price movements tonight, see how they affect the Canadian dollar. USDCAD is believed to be hovering between 1.3220 and 1.3290.

 

US crude oil futures

52.35/52.60 resistance

49.55/49.35 support

OPEC intends to propose the production cuts, waiting for the support of other members’ support to the reduction. Oil prices are expected stable now, but the EIA report did not provide a positive boost to prices, which are expected to be capped at $52. Please stay on the sidelines and wait for a breakout to rise. If oil prices adjust to $50 or $49, it could have a good price to buy.

 

Gold

1580/1582 resistance

1570/1568 support

U.S. CPI rose less than expected in January and U.S. retail sales were expected to be weak, sending gold prices upward. Technically, gold price breaks through the $1575 resistance but limits the $1579 resistance. Gold prices were volatile tonight following U.S. retail sales data and the Michigan consumer confidence index. If U.S. data meets market expectations tonight, it could limit the gold price upward.

 

U.S. Dow Jones industrial average futures US30

29550/29635 resistance

29080/28935 support

U.S. inflation data under investor’s expectations and assuming the U.S. retail sales data likely to be weak. Dow futures could be limited to 29,550 resistance. If U.S. retail sales come in below market expectations, Dow futures would lower and test the key support at 28935.

 

BTCUSD:

10550 / 10850 resistance

10050 / 9800 support 

Dow futures rebounded, testing 29550 resistance. Keep watching the Dow future and global stocks market indexes after the U.S. retail sales data tonight. If Dow fell after the data, the bitcoin price could keep up further. Otherwise, the bitcoin could fall.