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American Government May Face Partial Shutdown

A guest post written by DAR Wong

Currency Market Observations – 22 January 2018

Fundamental Outlook

The U.S. jobless claims fall to 45-year low. American Government may face partial shutdown in operation if an impasse is not approved in Senate Congress for a new funding bill. China stays in good growth rate on national economy. Britain retail price index on overall consumers’ sentiment rises to 6-year high.

The U.S. jobless claims dropped to 220,000 in the week ended 13 January, at 45-year low record. Building permits stayed strong in January at 1.30 million while housing starts fell to 1.19 million and lower than December.

The U.S. Government faces risk of partial shutdown if the lawmakers fail to pass a bill for funding the civil services through 16 February. House has approved a funding bill but has not passed through the Senate, before representing onto President’s table for signing into law.

China grew 6.8 percent in final quarter of 2017. Industrial production including utilities and mines rose 6.2 percent in January on year basis. Another report on retail sales expanded 9.4 percent from a year ago and fell below 10.0 percent for the first time in past 10 months.

Eurozone consumer prices rose 1.4 percent on year basis in December. Core prices, excluding food and energies, grew 0.9 percent from a year ago. Another report on current surplus in the 19 nations rose EUR32.5 billion in November and higher than previous month.

British consumer prices rose 3.0 percent in December from a year ago. Retail price index rose 4.1 percent on annual basis at 6-year high. Retail sales fell to 9-month low at minus 1.5 percent after the data was revised down to 1.0 gains in November.

Technical Forecast

USD/JPY has been trading sideways for many days while waiting for Bank of Japan’s policy rate announcement on Monday. We reckon the trend will be supported at 110.00 and make possibly a rebound to 112.50 area. However, breaking beyond this range could be unexpected and need to be guarded with risk control in case your position sits on the adverse direction.

EUR/USD might be resisted temporarily as the trend has rattled in smaller range around 1.2250 area. This week, the support is identified at 1.2030 level in case of drawdown. Piercing above 1.2300 could trigger a new buying interest and aim for 1.2550 target due to unforeseen circumstances.

GBP/USD has encountered resistance at 1.3950 – 1.4000 region last week. Technically, market trend is exhausted and might drawdown this week if the trend could not pierce above 1.4000 level. Downside target may reach 1.3650 region if Dollar rebounds for correction.

Dar Wong

This post is contributed by OPF Guest Blogger, DAR Wong.

DAR Wong is a registered fund manager in Singapore with 26 years of global trading experiences. You may reach him at dar@pwforex.com

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DISCLAIMER: This post is written for general information only. The author, publisher and/or any third party involved in the distribution of this work assume no legal responsibilities and shall have no liability whatsoever for any direct or consequential losses, costs or expenses arising from the use of the information contained herein.

 





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