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Dow Falls at Deepest Range in a Decade

  • DAR Wong
  • 19 August 2019

CURRENCY MARKET OBSERVATIONS – 19 Aug 2019

 

 

Fundamental Outlook   President Trump says he will delay part of the tariffs on Chinese imports till December for the sake of consumers’ shopping seasons towards year-end. Just when the market investors begin to be relieved of this truce, the U.S. Treasury yield went into inversion for first time in more than decade on last Wednesday and dented the stock markets. Dow market plunged more than 800 points on Wednesday form previous day closing due to fear of coming recession.

The U.S. core consumer prices, excluding fresh food and energy, rose 0.3 percent in July on monthly comparison and better than forecast. Throughout last week, the Dollar Index (USDX) headed back from 97.10 to 98.00 level before weekend and put a cap on commodity prices.

On Friday, President Trump made a conference call to CEOs of JP Morgan, Citibank and Bank of America after the stock market dipped in big fall on Wednesday. The corporate heads mutually expressed the economy could be better if the U.S. – China trade war can be resolved.

U.K. consumer prices rose 2.1 percent in July on annualized rate and above forecast. Last week, the Pound traded in small recovery for 100 pips against Dollar and closed at 1.2150 on Friday. Investors are still staying cautious on U.K. dilemmatic economy due to a potential no-deal BREXIT in coming October.

 

Technical Forecast   USD/JPY bottomed 105.00 recently and will begin to trade in consolidation. This week, we foresee the trend will move in mixed sentiment while contain from 105.00 – 107.50 range. Falling beneath 105.00 level will need to be controlled with risk management.

EUR/USD has fallen to 1.1100 region while caught in sideways trend. This week, we reckon the trend will stay in whipsaw due to the swing of Dollar Index. However, strong support is identified at 1.1050 region and likely to push the trend into a sideways movement while resisted beneath 1.1200 level.

GBP/USD is currently supported at 1.2000 and likely to be contained from 1.2000 – 1.2200 range. Market traders are staying away from this market as more attention is staked at precious metals and stock index recently. However, falling beneath the aforementioned support in August month will continue the bear trend in Pound.

Gold prices edged higher to USD1525 /oz last week but in small day range. Technically, we reckon this could lead to a coming correction if the bulls couldn’t clear above USD1530 /oz this week. Generally, we expect the range to be largely contained from USD1490 – USD1530 /oz and very mixed in trading activity. However, breaking in either direction beyond this range will indicate a new headway for a short period of time.

WTI Crude prices traded in USD53.50 – USD57.50 /barrel last week. Moving forward, the market carries strong potential to rise further so long as the trend could stand above USD53.00 /barrel. Meanwhile, we forecast the range will stay unchanged in coming week but sentiment will gradually build up on the upper prices below USD58.00 /barrel. Trading above USD58.00 /barrel will indicate a new bullish recovery in market.

Silver prices have shown sign of slowdown in bullish trend. This week, the range could be contained from USD15.70 – USD16.40 /oz with potential of down move correction. In our general opinion, Silver goes alongside with Gold trend but the initial correction will be slower in reaction compared to Gold prices. Long traders should prepare to take profits and buy back at lower prices upon correction.

Crude Palm Oil (FCPO) Futures on Bursa Derivatives traded in small correction after rollover to November month. The November19 Futures closed at RM2192 /MT on Friday. This week, we reckon the trend will be resilient at RM2240 /MT due to heavy profit-taking activity. Downside support is identified at RM2160 /MT and trend is likely to move into correction within the target range.

 

 

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.