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The U.S. – China Trade Deal is Signed Finally

  • DAR Wong
  • 20 January 2020

MARKET OBSERVATIONS – 20 Jan 2020

 

The U.S. – China Trade Deal is Signed Finally

Fundamental Outlook   The U.S. and China have signed the phase one trade deal while China agrees to purchase total USD200 billiongoods and services in 2 years. Analysts say the tariff will remain as a debatable topic as the china truce deal seems to be fragile.

American consumer prices grew 0.2 percent in December as projected. Excluding fresh food and energies, core prices gained only 0.1 percent and below forecast.

Impeachment procedure on President Trump has begun on Thursday as Chief Justice and Senates sworn in for impartial judgement. Hearing will commence on coming week on Trump’s abuse of power and obstruction to Congress.

China grew 6.0 percent in GDP over final quarter of last year, averaging 6.1 percent gains in 2019. Another report on industrial production rose 6.9 percent in December from a year and highest March 2019. Premier Li Keqiang says the China will continue to cut tax this year in order to boost recovery.

Pound fell last week as market traders anticipate Bank of England will cut rates in-lieu of BREXT fear. The GBP/USD rate is loitering around 1.3000 region as the trend fizzled out from 1.3200 recently.

 

Technical Forecast   USD/JPY broke above 109.70 resistance last week and will rise higher. This week, we foresee the trend will test 111.00 region if Dollar strengthens further. Support will emerge at 109.70 in case of drawdown. Small range trading is expected.

 

EUR/USD dipped after middle last week. Resistance has emerged at 1.1150 area but trend is expected to move in narrow range. Technically, we reckon the trend movement will be contained from 1.1000 - 1.1150 region while traders adjust mixed position. Literally, traders are watching the outcome for Dollar upon impeachment trial that will inversely affect Euro this week.

 

GBP/USD has shown strong resistance at 1.3100 level and we expect multiple selling pressure above this price range. This week, we predict the trend is prone to go weaker but still contain from 1.2900 – 1.3100 region. Fundamentally, traders are rising their caution ahead of BREXIT towards end January.

 

Gold prices traded in a narrow range below USD1560 /oz last week. Traders are sitting of fence while observing the fundamental outcome on U.S. – China trade deal signed in Washington and impeachment trial in coming week. Technically, we foresee the range will be contained from USD1530 – USD1560 /oz but breaking beyond this consolidated range needs to be controlled with risk management.

 

WTI Crude prices sat on USD58 /barrel support last week and traded in small movements. OPEC Secretary-General Barkindo cites oil prices carry upside potential in 2020 and hopes to lift demand. This week, we predict the trend will be compressed into small range from USD58 – USD61 /barrel with no expectation. However, beware of whatever unexpected news in market that may break beyond this consolidated range in either direction.

 

Silver prices have been loitering around USD18.00 /oz in uncertainty. Technically, we believe the market is rather versatile but waiting to move in either directional trend depending on fundamental news. This week, we reckon the range will be contained from USD17.50 – USD18.50 /oz with the potential to go in either direction.

 

Crude Palm Oil (FCPO) Futures on Bursa Derivatives dived last week due to rising Ringgit. Separately, profit sharing activity has occurred after 3 months of rising trend. April20 contract closed at RM2843 /MT on Friday. This week, the bears might fall lower to test RM2750 /MT before bargain-hunting emerges. Resistance stays at RM2950 /MT in case of recovery.

 

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.