Coronavirus Spreads Fear into Market | DZHI - DZH International 
logo

Coronavirus Spreads Fear into Market

  • DAR Wong
  • 27 January 2020

MARKET OBSERVATIONS – 27 Jan 2020

                                       

Coronavirus Spreads Fear into Market

Fundamental Outlook   Both U.S. and China have signed the truce of tariff hikes and simmer the market tension, During the World Economic Forum held last week in Davos, billionaire investor Soros slammed Trump and Xi with criticism on their agreement on the trade deal and remarked on their behaviours.

The coronavirus epidemic spreads from China Wuhan and crosses borders into Asia and western territories. Till date, more than 1300 cases have been identified on regional base while almost 90 percent cases come from China. So far, 41 deaths have been reported. ON Friday, Dow benchmark fell below 29,000 level lest fear of rapid spread in the contagious disease.

European Central Bank maintains interest rate unchanged at minus 0.5 percent while commits to the continual QE program previously propelled by Mario Draghi. Under the wings of new President - Christine Lagarde, policymakers stay vigilant in purchasing EUR20 billion of bonds monthly and this program will continue progressively till further notice.

WTI Crude prices fell to 11-week low middle last week at USD55 /barrel region. Market is worried of the demand wane from the economic slowdown in China due to epidemic spread.

 

Technical Forecast   USD/JPY topped off 110.00 level after market floated for 3 days above this benchmark. This week, we forecast the trend will be prone to fall while resisted at 110.00 level. Downside support will emerge at 108.00 – 108.30 region in case of drawdown.

 

EUR/USD fell from 1.1100 major resistance as Dollar strengthened last week. This week, we project the trend will be contained in tight range but prone to weakness. Downside support will emerge at 1.0950 – 1.000 region depending on fundamental values in Dollar Index. Traders are advised to stay prudent when picking bottom in Euro.

 

GBP/USD has shown a progressive resistance line on the day chart with the recent fall off 1.3150 level. This week, the trend will likely thread in narrow range from 1.3000 – 1.3150 region while making final consolidation. In any case, the downtrend beneath 1.3000 will signal a new selling pressure due to unexpected market news.

 

Gold prices have been trading in very narrow range last week but slightly showed an initial uptrend on Friday. This week, we reckon the trend might climb and retest USD1590 /oz due to fear of market slowdown in the global epidemic attack. However, the support is identified at USD1540 /oz and should not be violated, otherwise new selling activity will occur.

 

WTI Crude prices broke beneath USD55 /barrel and showed weakness in global demand. Market signals fear of waning demand in the wake of China’s epidemic spread. This week, we foresee the bears will head down to test USD52 /barrel as our next support before market rebounds. Topside resistance will emerge at USD57.50 /barrel level. 

 

Silver prices have shown strong support at USD17.70 /oz last week. Market is beginning to turn up as fund moves into precious metal as safe haven. This week, we forecast the trend will be contained from USD17.70 – USD18.50 /oz while subject to rising prices.

 

Crude Palm Oil (FCPO) Futures on Bursa Derivatives traded in whipsaw last week as traders took profit. Market has been firmly resisted at RM2950 /MT as predicted. April20 Futures contract settled at RM2862 /MT on Friday. This week, we forecast the trend will continue to dip at RM2800 /MT level with another lower support rising at RM2750 /MT region. Topside resistance remains consistent at RM2950 /MT level.

 

DAR Wong has 30 years of trading and hedging experiences in global financial markets. The opinion is solely at his own.  He can be reached at dar@pwforex.com


About the Author
DAR Wong (Singapore)
An international speaker with 27 years of trading experience in the global financial markets, DAR is a Market Master and author of “Living Daylight in Stock Market: Monetizing Your Profits in 8 Days”.

DAR Wong is an active market trader, registered fund manager, educator and author.He began his career in 1989 as an institutional Futures trader with Bank of America. DAR Wong specializes in trading global derivatives and financial markets. He has 26 years of experience accumulated through tenure with Bankers Trust, Barclays Bank, Citigroup (Smith Barney Shearson Inc) and as an independent trader.

DAR is the author of “8 Ways to Invest in China’s Emerging Market” and contributes frequently to regional media, including financial TV/Radio programmes, newspapers and magazines for professional traders and active investors.

He is a popular and sought after international speaker who has presented to financial professionals and investors throughout the region including Singapore, Malaysia, Indonesia, Thailand, Hong Kong, China, Cambodia, Myanmar, Philippines, Sri Lanka, India, South Korea, Laos, Vietnam, United Kingdom and Middle East (UAE).

DAR is registered with NASD (now known as FINRA) series 3 and 5 as approved by National Futures Association (NFA) of USA and holds a current portfolio as Fund Strategist and Advisor with Dektos Investment registered with Monetary Authority of Singapore.

DAR is profiled as “One of the most successful traders – Market Masters” in Brent Penfold’s bestselling book “The Universal Principles of Successful Trading “. In January 2015, DAR was honored with Outstanding Award for International Financial Market Analysis granted by ASEAN Commerce (Thailand).

DAR is the author of "8 Waysto Invest in China's Emerging Market" and contributes frequently to regional media, including financial TV/Radio programmes, newspapers and magazines for professional tradersand active investors.1

He is a popular and sought after international speaker who has presented to financialprofessionals and inverstors throughout the region including Singapore, Malaysia, Indonesia, Thailand, Hong Kong, China,Cambodia, Myanmar, Philippines, Sri Lanka, India, South Korea, Laos, Vietnam, United Kingdom and Middle East(UAE).2


Year
2003 - Set up ASPRI to provide hedging advisory for corporate clients and training for financial professionals
2009 - Released first book “8 Ways to Invest in China’s Emerging Market”
2010 - Profiled as “one of the most successful traders – Market Masters” in Brent Penfold’s bestselling book “The Universal Principles of Successful Trading” along with Larry Williams, Andrea Unger, Michael Cook, and Daryl Guppy etc
2011 - Received “Spirit of Enterprise”awarded by Singapore Management University in Singapore
2012 - Honored with Individual Diamond Career (Thailand) awardedby Royal Privy Council of Kingdom of Thailand
2013 - Appointed Vice Chairman of ASEAN-China Commerce Association and led a delegationtothe annual China-Asean Expo in Guangxi Province, China
2014 - Fund Manager cum Director in Dektos Investment Corporation registered with Monetary Authority of Singapore
2015 - Released new book “Living Daylight in Stock Market - Monetizing Your Profits in 8 Days” in January
2015 - Honored with Outstanding Award in International Financial Market Analysis awarded by ASEAN Commerce (Thailand)
2016 - Honored with Medal of Integrity by Royal Councilin Palace of Palembng, Indonesia

References

1.TV programs on ChannelNewsAsia (Singapore);Radio on 95.8 Capital (Singapore); Newspapers such as The Borneo Post (Malaysia), 资汇报 (Malaysia); Regional financial magazines such as The Analyst (India), 东盟商界(ASEAN, China), 资本杂志 (Malaysia).

2.Spoke at events for CME Group, Euronext LIFFE, Tokyo Commodity Exchange, Singapore Exchange, Korea Exchange, Bursa Malaysia, Thailand Futures Exchange, Jakarta Futures Exchange, Indonesia Commodity and Derivatives Exchange, Tokyo Commodity Exchange, Interactive Brokers, Xinhu Futures, Hangzhou Money Fair, China (Shenzhen) International Finance Expo, China (Guangzhou) International Finance Expo, Euromoney, CIMB, Maybank, RHB, UOB Bank, Asia Trader & Investor Convention, Global Rubber Conference, International Rubber Conference, Malaysia Rubber Board, International Rubber Research and Development Board,Malaysia Ministry of Agriculture, Rubber Industry Smallholders Development Authority, Vietnam Rubber Association, Cambodian Rubber Association, Bureau of Agriculture Research Philippines, Myanmar Rubber Planters & Producers Association etc.