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ATFX Market Outlook, 2020 Feb 19

 

Personal opinions today: 

 

Dow futures fell last night, the dollar rose as the Fed cut its purchases bond. A weak ZEW economic sentiment index for Germany and the Eurozone deepened the euro's slide against the dollar yesterday, below 1.08 level, bearish for the Swiss franc and pound. Dow futures fell, risk aversion rose, gold and silver rose. Crude oil prices were supported by news that Russia accepted OPEC production cut and agreed to hold a discussion meeting on March 6, bullish oil price. It is important to note that US API crude oil stocks change released tomorrow morning. Lower inventories could boost crude prices, test $52.40 resistance.

 

During the European session, the UK CPI and the retail price index for January received supportive attention, which affected the pound and was more likely to indirectly affect European currency volatility. In addition, the federal reserve released minutes of its monetary policy meeting, and investors waited for the monetary policy minutes. Monetary policy can affect financial market volatility, with particular attention to dow futures volatility, which indirectly affects gold and crude oil prices.

 

[Important financial data and events]

Note: * refers to the degree of importance

 

17:00 Eurozone current account **

17:30 UK CPI and retail price index ***

21:30 U.S. PPI ***

21:30 U.S. housing starts **

21:30 Canada CPI ***

The next day 03:00  FOMC Minutes ***

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

 

EURUSD

1.0820/1.0830 resistance

1.0785/1.0775 support

Comments by the European central bank's chief economist, an uncertain outlook for the Eurozone. Yesterday, the Eurozone ZEW economic sentiment index fell, bearish for the EUR. Technically, the trend could continue its correction wave, breaking through 250% correction support at 1.0810, looking down at 1.0775. At the moment, many institutional open long positions in EUR futures, it's worth noting the EUR rebound against the dollar. The EUR is expected to recover some of its losses against the dollar after the release of the FOMC minutes, EUR could test  1.0830 resistance.

 

Pound to dollar

1.3035/1.3045 resistance

1.2960/1.2950 support

UK employment data in December, show the jobless claim rose, bearish for the pound. Investors were also watching the UK CPI and retail price index for January. The market is waiting to see how the UK retail sales data for January and the PMI for February will release tomorrow and Friday. Britain will formally discuss a Brexit deal with the EU Brexit committee on Thursday. Although, investors are worried about the failure of the discussion, bearish the pound. According to the past, generally, the meeting and discussion were positive. If the EU accepts the Brexit deal, it could bullish the pound. Technically, the pound could test a significant resistance to $1.3120. Before the current meeting begins, keep an eye on the support at 1.2950.

 

Australian dollar

0.6700/0.6710 resistance

0.6665/0.6655 support

The RBA issued minutes of its monetary policy meeting, reiterating that it was considering further interest rate cuts as a way to stimulate the economy. Fundamental and technical analysis changes, the AUDUSD resistance lowered to 0.6730. Refer to support bit 0.6655. Believe, this period of time, indirectly bearish NZD dollar as well.

 

Dollar to yen

110.10/110.20 resistance

109.65/109.55 support

Technical analysis, the dollar continues to move against the yen. If global stocks fall, particularly Dow futures and the Nikkei, the dollar against yen could breakthrough 109.55 support. In addition, it is worth paying attention to Japan's fiscal year is approaching, capital flows back to Japan, the yen could upwards, the U.S. dollar/yen preliminary estimates below the 108 level.

 

USDCAD

1.3280/1.3290 resistance

1.3220/1.3210 support

The U.S. dollar was briefly flat against the Canadian dollar after crude oil rose to $52. Canada's CPI is expected to be released today, very important for the Canadian dollar. Investors were on the sidelines, with USDCAD trading in the $1.3220 to $1.3280 range. Believe the Canada CPI forecast growth, bullish the Canadian dollar. Besides, OPEC intends to cut production, indirect bullish on the Canadian dollar. Technically, keep an eye on trading between 1.3290 resistance and 1.3210 support.

 

US crude oil futures

52.35/52.60 resistance

51.55/51.35 support

The U.S. economy has performed strongly, but the economic outlook in Europe and Asia is uncertain, limiting demand growth and limiting crude oil prices. Besides, OPEC’s offer to cut output was accepted by member Russia, which plans to meet on March 6. Oil prices are expected to stabilize for now. A correction to $50 or $49 could see investor support. Technically, crude has broken through the $52.40 and $52.60 resistance ranges and is expected to test $54.

 

Gold

1607/1609 resistance

1592/1590 support

European central bank and Asian monetary policy, maintaining low-interest rates and easy monetary policy, the federal reserve reduced the scale of bond purchases, a sharp correction in Dow futures, capital funds into the gold market, gold prices rose above $1,600. It is worth noting that tomorrow's release of the FOMC minutes which is likely to limit gold's rise in the minutes and the gold price’ trend could reverse.

 

U.S. Dow Jones industrial average futures US30

29410/29550 resistance

29080/28935 support

After the federal reserve announced to reduce the size of the purchase of bonds, reducing the market liquidity, adverse financial markets, Dow futures fell. Besides, investors are looking ahead to the FOMC minutes tomorrow morning. During this period, there are opportunities to limit Dow futures gains and possibly test lows. In particular, Dow futures fluctuated after the release of minutes of the fed's monetary policy meeting. Dow futures could rebound if any interest rate cuts are revealed. Technically, Dow futures focus on 29,550 resistance and 29,080 support.

 

BTCUSD:

10225/ 10550 resistance

9750 / 9550

support  Investors worried the federal reserve to reduce the size of the purchase of bonds, the market liquidity reducing, affecting the financial markets and US economic growth. During the Dow future falls before FOMC minutes, the bitcoin would rebound and test higher price.