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President Trump Visits China while Sealing Deals

A guest post written by DAR Wong

Currency Market Observations – 13 November 2017

Fundamental Outlook

The U.S. President leads an entourage to China for state visit and signs multiple deals. China rises in inflation. Saudi Arabia is undergoing anti-corruption cleansing and seizes huge assets.

The U.S. FED chair Janet Yellen will be replaced in next February by Jerome Powell after handpicked by President Trump. Currently, market economists are reviewing the Republican tax cut plan and say it could increase USD1.7 trillion in budget deficits over 10 years. Meanwhile, the House is looking for ways to neutralize the tax cut before the announcement of implementation this month.

The U.S. jobless claims rose 239,000 for the week ended 4 October and highest in past 4 weeks. President Trump visits China with 30 CEOs from American companies and has signed 37 deals amounting more than USD250 billion.

China’s trade balance rose CNY254 billion in October, estimated at USD38.2 billion and higher than previous month. Another report on consumer prices grew 1.9 percent in October from a year ago and highest in past 9 months. Likewise, producer prices that measure manufacturers’ cost rose 6.9 percent on annual basis and highest since April.

Saudi Arabia is undergoing through a cleansing exercise of anti- corruption. Crown Prince Mohammad Bin Salman has put 11 princes, officials and ministers under house arrest for investigation. Source reveal that an estimated USD800 billion of assets have been frozen.

U.K. manufacturing production expanded 0.7 percent in September and best in past 9 months. Trade deficits narrowed to GBP11.3 billion in September and best record in 7 months.

Technical Forecast

USD/JPY has traded slightly in correction in small range. This week, the trend will stay strong if it could stand above 113.00. Range is expect to move from 113.00 – 114.50 region but piercing beneath 113.00 support will need to abandon the bullish view.

EUR/USD traded in sideways last week amid uncertain trend. This week, we reckon the trend will be resisted at 1.1700 – 1.1750 region in case of initial pull up. The prices are likely to fall after mid-week to 1.1450 bottoms. However, risk control is advised if it pierces above 1.1750 resistance.

GBP/USD is showing unclear directional trend as the Pound is still influenced by the BREXIT procedures that have yet to be ascertain. This week, we foresee the range will be supported at 1.3030 region while small recovery might be possible at 1.3300 target.

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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