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American Payrolls Rise and Dampen Rate Cut

  • DAR Wong
  • 8 July 2019

CURRENCY MARKET OBSERVATIONS – 8 July 2019

 

Fundamental Outlook   The U.S. payroll rose 224,000 in June and above forecast, dampening the traders’ expectation of impending rate cut by policymakers. Dollar recovered on Friday and punted the precious metals and Crude demand. 

The U.S. President Trump accuses of Europe and China for devaluing their currencies for unfair advantage. Trump also threatens a new tariff on EUR400 billion of European goods. Meanwhile, Vietnam and European Union have signed a treaty of eradicating almost 99 percent tariff on imports made in Asian countries.

China says the trade tariffs must be removed completely if a trade deal is to be reached between U.S. and China. However, President Trump cites the current 25 percent trade tariffs on USD250 billion worth of Chinese imports will be not removed.

European Union leaders have agreed to nominate the International Monetary Fund chief Christine Lagarde as the new head of European Central Bank. Before the weekend, European stock markets cheered in rally.

OPEC allies have agreed to cut supply through March 2020 to support oil prices by maintaining 1.2 million barrels production per day.

 

Technical Forecast   USD/JPY has shown a recovery on Friday as Dollar strengthened. This week, we reckon the trend will trade slightly higher but contain from 107.50 – 109.00 range. Only breaking beyond the range will extend into a new direction in either headway.

EUR/USD has dipped before the weekend but nearing to support area. This week, the trend could be supported at 1.1150 – 1.1180 region and rebound for short-covering. Topside resistance is identified at 1.1300 area in case of pull-up retracement. Technically, the movement of Dollar Index will play an essential role in triggering an inverse relationship to Euro.

GBP/USD has come back to 1.2500 benchmark as Pound recedes in waning confidence. This week, we foresee a strong resistance will lay across 1.2600 level in case of recovery. However, the breaking beneath 1.2500 support will open a huge potential to test 1.2370 level on the downside. Uncertainty has been looming over British economy as BREXIT approaches in October.

Gold prices reversed down on Friday after following the surge in Dollar. This week, we forecast the yellow metal will trade in weaker demand but still may encounter some bargain-hunting activities at USD1380 /oz area. Overall range is expected to move from USD1380 – 1420 /oz for the time being until we see a breakthrough in either directional headway.

WTI Crude prices have been standing firm on USD56.50 /barrel level and likely to rise this week. Technically, the trend will trade in bullish sentiment from USD56 – USD60 /barrel range. However, piercing above USD60 /barrel will lift the prices to USD63 /barrel as our next target.

Silver prices dived on Friday with yellow metal as Dollar rose. This week, we presume the trend will go lower and likely to test USD15.60 /oz again before bargain-hunting emerges. Resistance is identified at USD16.20 /oz in case of upward retracement.

Crude Palm Oil (FCPO) Futures on Bursa Derivatives traded in small range last week while hovering around RM1950 /MT level. The market is supported from falling further but could not summon enough demand to drive up the prices. This week, the trend may bounce up to RM2000 /MT so long as it doesn’t penetrate beneath RM1930 /MT support. On the contrary, breaking beneath the RM1930 /MT will head down to RM1880 /MT region.

 

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.