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Trump Wins U.S. Presidential Seat

A guest post written by DAR Wong

Currency Market Observations – 14 November 2016

Fundamental Outlook

The U.S. Presidential Election is finally over with Trump ascending to become the first man in America. On Election Day, Dow Jones market recovered from initial 1000 points decline and closed at near to historical new high at 18,847 levels. China sees gains in inflation reports through consumer and producer prices.

Donald Trump wins the election as 45th U.S. President after swooping 279 winnings out of 507 contesting seats. Dow Jones markets went through a euphoria after declined 1000 points on the Election Day but recovered all losses after the results confirmed to be Trump as winner.

Weekly Crude oil inventories in U.S. storage rose 2.4 million and weighed down on energy prices. Jobless claims for the week ended 5 November at 254,000 and lowest record over past 4 weeks.

Japan’s producer prices contracted 2.7 percent in October from a year ago and matched forecast. Current surplus grew JPY1.48 trillion in September and plunged from JPY1.98 trillion in August. Bank lending in October increased 2.4 percent from a year ago and best in 12-month record.

China’s trade balance grew CNY325 billion in October and lower from CNY378 billion in previous month. China reports the consumer prices gained 2.1 percent on annualized rate in October while producer prices also up 1.2 percent from a year ago. Both data are better than forecast.

U.K. manufacturing production rose 0.6 percent in September and best record in past 6 months. U.K. construction output rose 0.3 percent in September on monthly basis and matched forecast.

Technical Forecast

USD/JPY dropped to 101.16 lows on Election Day but reversed up 500 pips till Friday. Market closed at 106.50 for the weekend unexpectedly. This week, we reckon resistance will emerge at 107.00 – 107.30 areas in case of further surge. However, the trend might digest recent short-covering and begin to fall back to 104.00 regions.

EUR/USD declined last week in very erratic movements. Trend slid from 1.1300 highs to 1.0850 for weekend closing nearing to technical support. This week, we forecast the trend will rebound if it can stay above 1.0800 regions. Recovery is possible to rise back to 1.1050 areas till we see further fundamentals.

GBP/USD has not moved much despite Dollar swing. This week, we predict market traders will stake their attention at Pound once Euro begins to recovery. Technically, it is difficult to estimate the drawdown range though we foresee strong support rising from 1.2400 levels. On hind side, the trend needs to pierce above 1.2650 resistances before it can ascend higher to test 1.3000 benchmarks.

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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