Iranian Oil Tanker Struck by Sabotage
- 14 October 2019
CURRENCY MARKET OBSERVATIONS – 14 October 2019
Fundamental Outlook A second whistle blower has been lodged against President Trump on his open invitation to China for investigating the Biden father and son. With many interference created by Trump administration on the inquiry, House Intelligence Chairman Adam Schiff called the White House’s moves “further acts of obstruction of a coequal branch of government.”
Last week, three U.S. companies angered the Chinese Government. To appease the situation, Apple Inc has removed an apps that enables protestors to pre-empt movements of Hong Long police; Activision Blizzard is a gaming company that has suspended a virtual game that simulates the Hong Kong protestors in mask and goggles, while shouting the slogan that associates to Hong Kong street protests. Separately, NBA activities, broadcast programmes and all sponsorship from Chinese partners have been removed from public access onshore China, thus resulting of loss in Billions of dollars.
The trade talk was conducted in Washington before the weekend. President Trump says his team has come to substantial phase one deal with China with Chinese delegates led by Vice Premier Liu He. Dow market closed with 319 gains in optimism.
U.K. GDP on month based in August fell 0.1 percent and turning into negative zone for the first time in 4 months. British housing prices grew at slowest rate in 6 years by mere 1.1 percent in September from a year ago. Economists and investors anticipate the housing prices will remain sluggish after BREXIT.
Early last week, British Pound fell as market critics have lost confidence in BREXIT deal since the deadline is just less than 3 weeks away. However, Pound shot up on Friday in optimism after U.K. and EU leaders rushed for a hasty meeting to re-negotiate the deal on BREXIT.
An Iranian oil tanker has been struck by 2 rockets on red sea off coast to Saudi Arabia. Crude prices rose 2 percent on Friday after the news release. No comments have been given by Saudi Government and no one has yet claimed responsibility to the sabotage.
Technical Forecast USD/JPY traded in recovery last week but halted at 108.50 resistance area as predicted. This week, we foresee the range is still constricted from 106.50 – 108.50 region in mixed trading. However, beware of a violation above 108.50 for settlement as this might initiate a new spike up trend in October.
EUR/USD climbed last week but ranged bound in our prediction. This week, the resistance will lift slightly higher to 1.1100 level in case of further rise. Technically, we reckon the bargain-hunting will ambush at 1.0950 area and keep the price movement in tight range until we see the Dollar trend in a clear directional headway.
GBP/USD shot up 500 pips over last two days before the weekend from 1.2200 level. Rapid rise was triggered by the unexpected optimism over U.K. discussion with EU Governors in Brussels. This week, we project a strong selling pressure will emerge above 1.2700 level and some profit-taking might occur in market. Overall range is expected from 1.2500 – 1.2700 region while traders stay on fence until end October.
Gold prices have shown downturn pattern on day-chart. This week, overall range is expected to be contained from USD1460 – USD1500 /oz and prone to bear sentiment. On the contrary, the correction in yellow metal may lend buying forces to push oil prices higher. Long traders should be cautious in case the Gold prices sink below USD1460 /oz level.
WTI Crude prices regained its uptrend and traded around USD55.00 /barrel before weekend. This week, we aim for higher grounds as the trend sits well on USD52.00 /barrel support. Topside target lies at USD58.00 /barrel and should encounter some profit-taking. Syria tension and Iran’s reaction to the sabotage of oil tanker will be prime focus in oil market in coming week.
Silver prices traded in sideways and has been waiting for more fundamental signs in market. This week, we suppose the trend will be contained in tight range from USD17.30 – USD18.00 /oz. However, it may be prone to fall on the downside since precious metals could fall for technical correction. Risk control is advised in case of adversity against your position.
Crude Palm Oil (FCPO) Futures on Bursa Derivatives traded in slightly higher prices last week. Recovery in energy prices might pull the FCPO higher in coming week. December19 Futures contract closed at RM2182/MT on Friday. This week, market support will emerge at RM2160 /MT and the ability to hold the demand above this level will lift the prices higher at RM2220 /MT. In case of strong bullish strength, breaking above RM2220 /MT will aim for RM2260 /MT area.
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