The U.S. Grows 3.2 percent in Q1 Seasons
- 29 April 2019
Fundamental Outlook The U.S. Trump administration tightens sanction on Iran’s oil exports and order all counterpart buyers to stop transaction by 1 May or face sanction. India and China are two largest buyers of Iranian oil and get caught in the situation.
President Trump vows to reciprocate the EU tariffs after Harley repots 27 percent drop in profits. Germany is worried of recession from the arising threats of U.S. increased tariffs on EU automobiles.
American order for durable goods grew at biggest gains over past 8 months by 0.4 percent. Another report on U.S. GDP grew 3.2 percent in Q1 seasons and exceled forecast.
The USD Index (USDX) surges to 98.00 level and put a lid across ASEAN currencies. On Friday, Crude prices fell 4 percent after President Trump said he orders OPEC to lower market prices. Gold prices have recovered from recent bottom made at USD1266 /oz.
Technical Forecast USD/JPY has been strongly resisted at 112.50 level and begin to fall. This week, we foresee the bears will continue to move lower at 110.50 region with increasing pressure. Market is prone to soften for time being since the Dollar Index has heightened at 98.00 benchmark.
EUR/USD has broken below 1.1200 level last week and loitered near to 1.1100 on Friday. This week, we expect the trend to rebound but trade narrowly from 1.1100 – 1.1250 region. Technically, there should be some room for recovery as Dollar is prone to correct.
GBP/USD bottomed out at 1.2866 last week. This week, we forecast some recovery will follow through but constricted from 1.2850 – 1.3100 region. Concurrently, we also identified the aforementioned resistance is confluent to the EMA200 line. Traders are still remaining observant to the BREXIT matter in coming weeks.
Gold prices bounced off USD1266 /oz last week. Moving forward, we foresee the trend will reach out to USD1300 /oz as our first target. In overall, yellow metal is still held back from strong rise due to the recent strong Dollar. We reckon there will be sideways consolidation within USD1265 – USD1300 /oz before breaking beyond this trend.
WTI Crude prices topped off recently from USD66.60 /barrel and fell on Friday after Trump’s remark. This week, we expect some continual weakening in oil demand while Dollar may fall too. Technically, we foresee a possibility to land at USD60 /barrel before bargain-hunting activity emerges. Overall trend is expected to be contained from USD60 – USD66 /barrel for time being until we move into May.
Silver prices bottomed out at USD14.75 /oz before moving back to USD15.00 /oz on Friday. This week, we reckon the trend will trade higher while capped beneath USD15.40 /oz level. Trade activity is subject to swing trading for a while before it may break beyond the range of USD14.75 – USD15.40 /oz region.
Crude Palm Oil (FCPO) Futures on Bursa Derivatives traded lower last week after news of slower decline in U.S. output. The USD/MYR is trading in tight range from 4.12 – 4.14 region. July Futures contract closed at RM2119 /MT and still shows bearish sentiment. This week, the trend will test first support at RM2100 /MT and upon piercing beneath this level, it will land at RM2050 /MT area. Topside selling activity is strong at RM2160 /MT level.
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