Britain to Announce New Prime Minister Soon
- 22 July 2019
CURRENCY MARKET OBSERVATIONS – 22 June 2019
Fundamental Outlook TheU.S. FED chair Powell emphasizes of global uncertainty that may need to introduce rate cut when necessary. On the other hand, President Trump threatens he could increase more trade tariffs on Chinese imports if needed.
Last Thursday, President Trump claimed a U.S. warship has shot down an Iranian drone near Straits of Hormuz. On following day, Iranian denied that no drone has been downed and said U.S. might have destroyed their own instrument.
Billionaire investor Peter Thiel accuses Google for working with China for benefitting the military intelligence. President Trump replies on conducting a check on Google who has denied the allegation.
China’s trade surplus increased USD51 billion in June and higher than previous month. Exports fell 1.3 percent from a year ago while imports dropped 7.3 percent in the same period. China’s GDP for second quarter grew 6.2 percent from a year ago and at lowest growth rate for past 27 years.
More than 50 large companies are moving out of China for relocation of manufacturing due to U.S. – China trade war. However, market analysts doubt that China will use the holding of U.S. Treasury as weapon for trade war retaliation.
This week, Britain will finalize the candidate of new Prime Minister and decide the inclusion of using Huawei’s 5G network. The U.S. Government has warned Britain from abstaining from using Huawei technology lest spying operations.
International Energy Agency (IEA) expects the return of an oversupplied oil market next year, despite the recent rollover of an OPEC-led pact designed to restrain any glut.
Technical Forecast USD/JPY has been trading in slight bearish trend last week. This week, we expect the prices to thread sideways due to possibility of weaker Dollar. Tight range will be contained from 107.00 – 108.00 region but breaking on the downside will initiate a new selling sentiment.
EUR/USD has been constricted from 1.1200 – 1.1300 range last week without clear direction. This week, we reckon there is higher probability in market ascension once the 1.1300 resistance is violated. Our next higher resistance will meet at 1.1400 level while confluent to the EMA200 line.
GBP/USD bounced off 1.2400 ground last week but still limits beneath 1.2600 level. This week, we presume the announcement of whoever be the new Prime Minister will inject some bullish factor into market. Driving above 1.2600 will aim for 1.2750 area in-line with potential Dollar weakens. Risk control is advised in case of falling beneath 1.2400 level.
Gold prices have hit new 6-year high again at USD1453 /oz last week. This week, it will be crucial to observe the Dollar trend in gauging the inverse direction of yellow metal. Technically, we forecast the range will be contained from USD1420 – USD1460 /oz but breaking above the aforementioned resistance will drive up the prices to USD1490 /oz level. On the other hand, beware of sinking below USD1420 /oz level unexpectedly.
WTI Crude prices took a dip to USD55 /barrel as fund has stayed in precious metal. This week, we predict the market will thread sideways but still supported at USD54 /barrel level. Overall range is expected to trade from USD54 – USD59 /barrel in mixed sentiment. We presume trading activity is still more focused in Gold and Silver while interest will ebb in Crude prices.
Silver prices has a solid run up last week and almost reached USD16.60 /oz. This week, we reckon the market will begin to digest the sentiment and move into mild correction. Technically, the trend will be well supported at USD16.00 /oz level and constricted in narrow range beneath USD16.60 /oz. Profit-taking will be expected to emerge in market amid sideways trend.
Crude Palm Oil (FCPO) Futures on Bursa Derivatives has been trading in narrow range while Ringgit stays inactive. October19 Futures closed at RM1974 /MT on Friday and slightly higher on weekly closing. This week, the trend is likely to rise higher with support at RM1950 /MT. Breaking above RM2000 /MT will aim higher at RM2040 /MT area.
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 email@example.com