President Trump is Impeached by House
- 23 December 2019
CURRENCY MARKET OBSERVATIONS – 23 December 2019
President Trump is Impeached by House
Fundamental Outlook The U.S. President Trump is the third President in American history to be impeached by the House. The next hearing will be tried by the Senate and decide if Trump is to be removed. Currently, the Senate is held in majority by the Republicans and needs at least 67 percent vote to overrule the removal of President.
Meanwhile, the agreement of phase one in trade deal between U.S. and China has sent the Dow markets to high record. Chinese President Xi expresses optimism and eager to sign the deal as soon as possible. China’s government confirms they will purchase USD40 – USD50 billion worth of agriculture products on annual basis for consumption.
Market traders reckon the rally in U.S. and Chinese stock indexes could rally into Q1 2020 as the trade deal is sealed on good relationship between the 2 countries. Dow market closed at 28,455 on Friday after reaching historical high 28,608.
Bank of England kept the monetary policy unchanged at 0.75 percent on last Thursday meeting. Asset purchase program will stay at GBP435 billion. The cabinet led by Prime Minister Johnson will execute BREXIT procedure before 31 January. However, Pound fell back to 1.3000 last week as no-deal BREXIT is expected from Johnson’s policy.
Last week, WTI Crude prices broke above USD60 /barrel at 3-month high record. Public trading of Saudi Aramco Company and the persistent cut in OPEC+ production through March 2020 has finally pushed the WTI prices into a new bullish sentiment.
Technical Forecast USD/JPY traded in narrow range last week and below 109.70 resistance. This week, we forecast the trend might correct and test 108.20 level. Overall prices will be contained from 108.29 – 109.70 region as Dollar trends to soften. However, beware of penetration above 109.70 resistance that needs to be accompanied with risk control.
EUR/USD has been resilient at 1.1200 level as market fizzled out last week. This week, we project the trend will be prone to weak demand but buying interest will emerge at 1.1000 – 1.1050 region. Falling beneath 1.100 level needs to exercise risk control since Euro is anticipated to bounce towards weekend.
GBP/USD has traded in bears last week. Market trend is still prone to fall in coming week with resistance building up at 1.3200 level. We reckon the first support will emerge at 1.2950 level for a while. However, beware of driving beneath this level and test 1.2750 in case of additional BREXIT fear.
Gold prices traded in very narrow range from USD1470 – USD1480 /oz last week. This week, we expect the trend to unwind as Dollar may recover slightly. Market movement is projected to move from USD1460 – USD1485 /oz amid down move. Risk control is advised in case of piercing above the aforementioned resistance.
WTI Crude prices rose to 3-month high above USD70 /barrel as demand begins to increase in oil market. This week, we predict the trend will be rangebound from USD59 – USD62 /barrel but prone to test bottom again. Generally, market traders are observant in tracking OPEC+ members for initiating the oil price trend in Q1 2020.
Silver prices traded in slight bullish trend last week. Market is prone to stay firm this week despite Gold may drop. Initial tight range is forecast to move from USD17.00 – USD17.60 /oz while threading sideways. Beware of driving beneath USD17.00 /oz in case of unfavorable sentiment that will reach USD16.40 /oz bottom.
Crude Palm Oil (FCPO) Futures on Bursa Derivatives traded in rangebound amid buyback towards last weekend. March20 contract closed at RM2914 /MT on Friday. This week, we foresee the trend is prone to climb higher towards year-end closing amid thin trading. Range is expected to be contained from RM2850 – RM3000 /MT with strong buying interest. Market tends to ascend higher in January due to market optimism.
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 firstname.lastname@example.org