Trump Cancels Trip to Meet Chinese Xi
- 11 February 2019
Fundamental Outlook On 1 February, the U.S. suspended its participation in the decades-old Intermediate-Range Nuclear Forces (INF) treaty that bans ground-launched medium-range missiles with a range of 310-3,400 miles. The treaty was signed in 1987 with the then Soviet Union. Analysts reckon the U.S. military may have plan to set nuclear missiles aiming at Iran, China and North Korea.
The U.S. President Trump addressed at State of the Union and mentioned that he will meet North Korea leader Kim on 28 February in Vietnam. On following day, President Trump says will not be meeting Chinese leader Xi before the deadline 2 March for the trade talk.
On Friday, Trump administration passed a new act called NOPEC, meaning “No Oil Producing and Exporting Cartels Act”, to get supporting vote from the full House of Representatives. The purpose of the bill is to prevent oil producing countries including the 14 countries in OPEC from manipulating oil prices.
Venezuelan crisis has reached boiling point under Maduro’s Government. The country is oil rich but cash poor though Maduro signed into second term as President in January. Till now, 11 out of 14 LIMA countries have officially recognized the new leader Juan Guaido as the newly interim President despite yet to take control of the state function.
Bank of England predicts worst year in U.K. economy since 2008 due to uncertainty of BREXIT. Policymakers keep the interest rate unchanged while observing the tension in coming end April for the BREXIT execution.
Technical Forecast USD/JPY traded in small range while capped under 110.00 level last week. Technically, we foresee strong resistance at 110.50 region in case of moving higher. Overall range is expected to be contained from 109.50 – 110.50 region while waiting to break beyond the constriction in due time.
EUR/USD is approaching the 1.1300 support again after falling for few days. This week, we reckon the movement will be caught in tight range from 1.1300 – 1.1400 initially. Breaking in either directional headway will lead a new trend for coming weeks. Traders are reminded to control their risk efficiently.
GBP/USD traded in mild bearish trend and closed at 1.2950 level on Friday. Market may recover and trade sideways from 1.2900 – 1.3100 in coming week. However, breaking in either direction beyond the aforementioned range will initiate a new headway in near future.
Gold prices traded in narrow sideways as we predicted last week. Range is constricted within USD1305 – USD1325 /oz in mixed trading sentiment. In our opinion, market is prone bias to fall if the prices pierce beneath USD1300 /oz due to profit-taking increases. Our next support lies at USD1280 /oz in case of drawdown and this is considered a healthy correction from the recent price jump.
WTI Crude prices have pulled back from the recent high USD56 /barrel after firm Dollar surfaced last week. Technically, we do not see the trend going in wild volatility. This week, overall range is expected to move from USD52 – USD56 /barrel until we see a breakout in either direction. Nevertheless, the catalyst to move U.S. Crude prices will largely depend on Dollar direction beside other fundamental news.
Silver prices have been moving in our prediction made last week. Overall range is still contained within USD15.65 – USD16.20 /oz until we see a breakthrough in due time. Technically, we project the trend may fall for further correction but supported at USD15.20 /oz before bargain-hunting emerges again.
Crude Palm Oil (FCPO) Futures on Bursa Derivatives traded in short-week due to Lunar New Year season. Market opened on Thursday amid light trading and climbed to RM2344 /MT after news of shrinking inventories in major producing countries. April contract settled at RM2289 /MT on Friday after profit-taking occurred. This week, we forecast the trend will continue to trade in liquidation while supported at RM2240 /MT with strong bargain-hunitng. Topside resistance lies at RM2340 /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 www.pwforex.com