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U.K. Prime Minister Announces Shutdown of Parliament

  • DAR Wong
  • 2 September 2019

CURRENCY MARKET OBSERVATIONS – 2 September 2019

 

Fundamental Outlook   The G7 summit ended last week with no highly expected outcome between the leaders. Before leaving the summit, the U.S. President Trump announces an increment in tariff in USD250 billion worth of Chinese imports on 1 September from 10 percent to 15 percent; another USD300 billion Chinese goods from 25 percent to 30 percent starting from 1 October.

China trade representative replies by willing to participate in a calm negotiation if U.S. counterparts reciprocate in same manner. On the other hand, the mainland’s manufacturing index rose 49.5 in August and submerged below 5.0 benchmark for fourth consecutive month.

Last Tuesday, China sent fresh troops to Hong Kong as military force pledges to protect the sovereign right. Chinese Yuan has fallen to 11-year low against Dollar as some analysts reckon the act by central bank to protect the trade exports.

U.K. Prime Minister Johnson has announced the Parliament will be suspended from 9 September to 14 October with the approval of the British Queen. Protest arises from millions of British citizens as they perceive a likely no-deal BREXIT will be outcome as Parliament will have insufficient time to respond before the end October.  

Italian Government faces meltdown as the coalition parties has declared unworkable. Prime Minister Guiseppe Conte suffers no-confidence vote from citizens and could be calling for a snap election. As a double impact to BREXIT, investors are taking a close watch at European economy with the concurrent trade war with U.S. Government.

 

Technical Forecast   USD/JPY has a pull-up due to Dollar recovery. Technically, the trend is temporarily supported at 104.50 level while topside is resilient at 107.00 area. Overall trend is likely to thread inside this range till it makes a breakout. Traders are advised to adopt swing trading with risk control.

EUR/USD broke below 1.1050 support and settled at 1.0990 on Friday. This week, the trend could be contained in tight range from 1.0850 – 1.1050 with a tendency to test the aforementioned support. Market is subject to many uncertain risk as Italian politics looms higher risk.

GBP/USD topped off 1.2300 and starts to behave in weak demand after news of Parliament shutdown. This week, we foresee the trend will be strongly resisted at 1.2230 in case of pull-up. However, the bears carry higher potential to engulf the market with a target set at 1.2030 bottoms. Investors are losing confidence in the acts of PM Johnson as spark to meltdown in U.K. economy.

Gold prices reversed down from USD1550 /oz as Dollar challenged 2-year high at almost 99.00 level. This week, we forecast a high chance to see the trend falling to USD1500 /oz with bargain-hunting emerging at USD1490 /oz region. For the time being, the yellow metal might be facing some liquidation as traders will move fund into energy sectors in coming weeks.

WTI Crude prices retraced after hitting USD57 /barrel top last week. Apparently, the trend is rather uncertain while threading sideways. This week, the trend will likely remain unchanged inside the constriction of USD53 – USD57 /barrel. In our opinion, Dollar needs to retrace lower in order to lend a buying force into Crude market.

Silver prices has tested the resistance at USD18.50 /oz and has reduced its trading activity at this high region. This week, we reckon the market will probably begin to reverse lower with 2 supports laying at USD18.00 /oz and USD17.50 /oz region. September could be a month for consolidation as profit-taking emerges. Traders are advised to remain patient and re-pick bottom when the prices end its sideways trend.

Crude Palm Oil (FCPO) Futures on Bursa Derivatives traded lower due to profit-taking after weeks of bullish trends. Market opened higher at RM2312 /MT and fell throughout the week. November19 Futures contract closed at RM2235 /MT on Friday. This week, we foresee the trend will trade in narrow range from RM2200 – RM2260 /MT in mixed sentiment. Market needs to digest the market bulls before finding anew directional trend.  

 

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.