The following article was written by ATFX Chief Analyst of Asia Pacific, Martin Lam.
Personal opinions today:
Martin Lam, ATFX
The EU agreed to extend the Brexit deadline, but only if the UK must vote again this week whether the Brexit agreement was passed. If the Brexit agreement is vetoed again, the UK must formally leave the EU without an agreement on April 12. The economic, political, livelihood and the border issues will in trouble. Of course, the UK can once again apply to the EU for an extension of the Brexit deadline, but can it be accepted by the EU. First, the British Parliament and the Prime Minister must provide sufficient justifications the Article 50, otherwise the EU will start the Brexit process on the new deadline. On the other hand, if the British Parliament accepts the Brexit agreement, the time for Brexit can be extended to May 22, and resolved to the risk and crisis of hard Brexit, is expected to boost European currencies, especially GBP.
The EU’s choice the deadline on May 22, to avoid the UK’s involvement in the next EU Parliament election vote, to avoid affecting future EU policy. At present, the EU has issued a final warning that the UK will postpone the Brexit again. It is believed to be very difficult, the British pound may once market to fall. The initial test target is to look at the low level of 1.23 at the end of last year or the low of 1.20 in the previous year. On the contrary, the British Parliament accepts the Brexit agreement, which is expected to boost the pound. The initial target may be tested at 1.35.
At present, market risks are starting to rise, and this week’s Brexit risk may lead to a rise in market sentiment. If these issues happened, the gold and yen may rise again. Because which are the major safe-haven funds.
Today’s suggestion:
EURUSD
1.1315/1.1335 resistance
1.1265/1.1245 support
The Eurozone Purchasing Managers Index fell, productivity slowed and the euro fell. In addition, the Brexit issue in the UK may deteriorate, affecting the EU economic downturn expectations. Technically, if the pound falls, it may be the euro may also be fall. This week, the British Parliament should be vote again on the Brexit agreement. If it is bad news, the euro may test the 1.12 side and is more likely to extend the adjustment to the 1.10 level. Short-term focus on 1.1315 and 1.1335 resistance, 1.1265 and 1.1245 support.
GBPUSD
1.3215/1.3230 resistance
1.3130/1.3105 support
The UK applied to the EU to extend the Brexit deadline and was accepted by the EU, but the British Parliament must pass the Brexit agreement and the deadline will be postponed until May 22. Otherwise, the agreement will be rejected again, and the UK will leave the EU on April 12. From the observation, if there is good news from Brexit, the pound can be above the level of 1.30. On the contrary, it will break below 1.30, depending on the situation, and try different low support, for example, 1.28 level. Short-term recommendations pay attention to 1.3130 and 1.3105 support. If it breaks, the pound is expected to continue its decline against the dollar, looking at the 1.30 target.
0.9965/0.9985 resistance
0.9905/0.9885 support
The euro fell, indirectly negative for the Swiss franc. But earlier this analysis pointed out that the Brexit issue mainly affects the euro and the pound, and the Swiss franc has the opportunity to be a safe haven between them. If it becomes their hedging tool, the Swiss franc has a chance to appreciate. Technically, the USDCHF has reached the expected target of 0.9985, and the breakthrough, the trend is expected to remain strong. 0.9905 and 0.9885 are targeted for support. But breaking the resistance of 0.9985, the trend reversed.
USDJPY
109.55/109.35 support
110.55/110.75 resistance
Earlier, the Fed said it expected to stop raising interest rates this year and the yen strengthened. At present, because of the increased risk of Brexit, the risk aversion has warmed up, and global stock markets have fallen, which indirectly dragged the dollar against the yen. Last week, this analysis pointed out that global investment confidence may be affected by the risk of Brexit, and safe-haven funds flow into the yen. In addition, the Fed expects to stop raising interest rates during the year, stop shrinking in September this year, and plan to cut interest rates next year. The US dollar advantage is weakened, and the yen has eased its depreciation pressure and has the opportunity to rise. Technically, if the dollar does not break 112 resistance against the yen, the short-term resistance is 110.75. According to the current trend, the initial target is likely to break through 109. If the situation remains the same and the trend continues, it will be possible to test 106.
AUDUSD
0.7085/0.7100 resistance
0.7055/0.7040 support
Australia’s unemployment rate rose in February, and industrial metal prices fell, causing the Australian dollar fell, the adjustment wave has exceeded 50%, and may start the test the target 0.7055 and the next support is 0.7040. Sino-US trade talks have once again problem that have affected the short-term trend of the Australian dollar. Technically, the Australian dollar still has an adjustment to fall, and the resistance can be targeted at 0.7100. If it breaks through 0.7040, the trend may fall further.
NZDUSD
0.6895/0.6910 resistance
0.6880/0.6860 support
New Zealand’s economic fundamentals are better than the Australian economy so far, and the New Zealand dollar can still maintain 0.6860 support. At present, avoid following the decline of the Australian dollar. Technically, short-term resistance reference can be made to 0.6895 and 0.6910. But on Wednesday morning, it was the New Zealand Federal Reserve Bank’s interest rate decision. The monetary policy could negative for NZD and may affect the NZD fall against USD. If it falls below the 0.6860 support, it must be noted to further expand the downward.
USDCAD
1.3465/1.3480 resistance
1.3405/1.3385 support
The Crude oil price fell, the Canadian dollar may also be affected by the decline in crude oil prices. Technically, the USDCAD began to break through the 1.3430 resistance. If crude oil prices continue to fall, it is estimated that the USDCAD can test the 1.3465 and 1.3480 resistance levels.
XAUUSD
1311/1308 support
1318/1321 resistance
The UK has applied for an extension of the Brexit deadline, but the EU requires that the British Parliament must accept the Brexit agreement, and the Brexit deadline can be extended to May 22. Otherwise, the Brexit began on April 12 without agreement. The market expects the British parliamen will not accept the agreement, the new deadline does not necessarily propose an agreement to vote. The risk sentiment is heating up and the stock market is falling, causing the gold price to rise further. The gold prices is more volatile before deciding on Brexit and the results coming. Technically, short-term attention to 1311 and 1308 support and 1318 and 1321 resistance.
US crude oil futures
59.05/59.60 resistance
57.35/56.80 support
Although the US president did not criticize the high price of crude oil, the price of crude oil fell. Because, the risk of Brexit increased, and Sino-US trade consultations encountered obstacles. Russian crude oil supply did not decide to further reduce production, bearish crude oil prices already. Last week, here mentioned that the crude oil prices can be focus on 59 and 58 support respectively, if it breaks the support of 58 US dollars, it is expected to test to 56 US dollars. In the short term, reference resistance is 59.05 and 59.60 USD, with reference to support 57.35 and 56.80.
US Dow Jones Industrial Index Futures US30
25595/25715 resistance
25280/24975 support
The uncertainty of the British Parliament’s Brexit and the progress of Sino-US trade negotiations, risk sentiment affects the performance of the Dow. Last week pointed out that it is recommended to keep an eye on the Dow adjustments. Technically, the 25280 and 24975 support is very important. If further breakthroughs are going, there is still a possibility of further adjustment. The next level of support is 24320. The current performance of US companies may also affect the performance of the Dow.
BTCUSD
3780 / 3680 support
4050 / 4125 resistance
The Fed announced the interest rate decision, the Fed will keep interest rates this year , the dollar value fell then pushed up the price of bitcoin. The bitcoin keep supported between US3780 and US3680. The target will be set at US4050 and US 4125.
Enjoy trading! The content is for reference only. Please do ensure that you understand the risk.
Information provided by ATFX, Chief Analyst of Asia Pacific: Martin Lam
Registered Australian Accountant/ Certified Professional Manager / Certified Financial
Advisor Experienced Investor / Media Market Commentator Martin Lam has Over 17 years’ experience in global investment market. Familiar with the worldwide stock indices, precious metals such Gold and Silver, Crude oil and Forex. He operated Martin Currency Trading Company and had partnership with a number of well-known international financial corporations and institutions. Before he join ATFX, he was TeleTrade Greater China development and Sales Director. Mr. Lam attends Hong Kong Now TV and China CCTV finance channel once a week. He also had regularly invited by different media, such as DBC Digital Financial Channel, Hong Kong Economic Times, The Standard, Ming Pao to share his experience to trade in Forex, Precious metals, Crude oil and worldwide stock indices.
Contact: [email protected] or wechat: ATFX_China
Legal: ATFX is a trading name of AT Global Markets Limited (ATGM, registration number 24226 IBC 2017). ATGM is an International Business Company in Saint Vincent and the Grenadines. Registered address is : the Financial Services Centre, Stoney Ground, Kingstown, St.Vincent & the Grenadines.