CPT Markets

This article is daily technical analysis from Ray Shen.

Treasury yields and global equity markets have come under pressure, with the impact of U.S. fiscal policy expected to dissipate completely in 2020 and the U.S. economy growing below potential this year. The fed has set a high bar for policy tightening, and inflation would need to rise substantially in the U.S. for the fed to start raising rates in the opposite direction. The fed is expected to leave rates unchanged at its meeting at the end of the month, but is expected to announce a quarter-point cut at its meeting in March and then hold off for the rest of the year.

The dollar index was under pressure, with support around 96.40 below and around 97.00 above.

The UK PMI dovetails with the stagnant UK economy; The modest rebound in new jobs is another sign that business conditions should improve in the coming months, boosted by the clarity of Brexit and a more predictable political outlook. But any gains in the pound are likely to be limited ahead of Wednesday’s meeting between British Prime Minister Boris Johnson and European commission President stephane von der leyen as concerns grow about Britain leaving the European Union without a trade deal.

At one point, sterling surged more than 100 points to $1.3175, with pressure at $1.3200 above and support at $1.3000 below.

Safe-haven demand weakened after the Asian yen rose to a near three-month high as the unfolding U.S. killing of a top Iranian general spurred demand for safe-haven assets. Iran’s government said on Sunday that it no longer considered itself bound by the 2015 nuclear deal, while Iraq’s parliament voted to expel U.S. troops.

USD/JPY rebounded to above 108.00, with short-term pressure above 108.50 and then above 109.00, short-term support below 107.50 and then below 107.00.

The situation in the Middle East brought great risk aversion to the market, and the dollar index fell during the day. Intraday spot gold hit its highest level since April 2013. Rising tensions in the Middle East have pushed gold higher. As a result of the event, the uncertainty in the whole market suddenly increased, and the safe-haven asset gold became the beneficiary.

Yesterday, the gold price jumped high and went up to 1587.16 after the fall, the above short-term pressure in the vicinity of 1580, and then the pressure on the top of 1600 integer pass, support in the lower part of 1550, KD index in the overbought area of a dead cross, afternoon there are signs of decline.

A U.S. air strike in Iraq has killed Iran’s top commander QassemSoleimani. The incident has heightened fears of a widening conflict in the Middle East. The Middle East accounts for nearly half of the world’s oil production. On Sunday, President Trump threatened to impose sanctions on Iraq if U.S. troops were forced to withdraw. Iraq is OPEC’s second largest producer. Baghdad earlier called for U.S. and other foreign troops to leave Iraq. Mr. Trump also said the US would retaliate against Iran if Tehran retaliated after the assassination.

Oil prices hit a more than eight-month high of $64.72 as US President Donald trump threatened sanctions against Iraq amid rising tensions with Iran in the Middle East. But then the surge height fell back to around 63.00, the short-term support below was around 62.00, and the support below was around 60.00, the short-term pressure above was around 64.00, and the pressure above was around 65.00.

PS: Today focus

18:00 euro zone economic sentiment index for December

18:00 final euro zone consumer confidence index for December

21:15 U.S. ADP employment in December (10,000)

23:30 EIA crude oil inventory change (10,000 BPD) for the week ended jan 3

The above views are for reference only, not for ordering basis. Investment is risky, so proceed with caution.



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