The EUR/USD currency pair continues to show a steady downtrend. The trading instrument has updated its two-year lows. EUR remains under pressure amid weak economic releases, as well as fears about the impact of the epidemic in China. At the moment EUR/USD quotes are consolidating. Local support and resistance levels are at 1.08250 and 1.08650, respectively. We recommend opening positions from these markers.
The Economic News Feed for 14.02.2020:
– GDP Report (EU) – 12:00 (GMT+2:00);
– Retail Sales Report (US) – 15:30 (GMT+2:00);
The indicators signal the sellers’ strength: the price has fixed below 50 MA and 100 MA.
The MACD histogram is in the negative zone, which indicates a bearish sentiment.
The Stochastic Oscillator is in the neutral zone, the %K line has crossed the %D line. There are no signals at the moment.
Trading recommendations
Support levels: 1.08250, 1.08000
Resistance levels: 1.08650, 1.09000, 1.09400
If the price fixes below 1.08250, expect further decline toward 1.08000-1.07700.
Alternatively, the quotes could grow toward 1.09000-1.09200.
The GBP/USD currency pair
Technical indicators of the currency pair:
Prev Open: 1.29597
Open: 1.30422
% chg. over the last day: +0.65
Day’s range: 1.30368 – 1.30555
52 wk range: 1.1959 – 1.3516
GBP/USD quotes have moved up. Yesterday, GBP added more than 80 points in the price against USD. The trading instrument has updated the local highs. At the moment GBP/USD currency pair is consolidating. The key range is 1.30100-1.30650. The technical patterb signals the further recovery of GBP/USD quotes. We expect important economic reports from the USA. Positions should be opened from key levels.
The news background on the UK economy is calm.
The indicators point to the strength of buyers: the price has fixed above 50 MA and 100 MA.
MACD histogram is in the positive zone, but below the signal line, which gives a weak signal to buy GBP/USD.
The Stochastic Oscillator is located in the neutral zone, the %K line crossed the %D line. There are no signals at the moment.
Trading recommendations
Support levels: 1.30100, 1.29850, 1.29400
Resistance levels: 1.30650, 1.31000, 1.31400
If the price fixes above 1.30650, expect further growth toward 1.31000-1.31400.
Alternatively, the quotes could descend toward 1.29700-1.29500.
The USD/CAD currency pair
Technical indicators of the currency pair:
Prev Open: 1.32516
Open: 1.32665
% chg. over the last day: +0.10
Day’s range: 1.32541 – 1.32690
52 wk range: 1.2949 – 1.3566
The USD/CAD currency pair is moving sideways. There is no defined trend. The investors are waiting for additional drivers. The trading instrument tests local support and resistance levels at 1.32400 and 1.32700, respectively. USD/CAD quotes can decline further. Today we recommend paying attention to the economic releases from the USA, as well as the dynamics of oil prices. Positions should be opened from key levels.
The publication of important statistical data from Canada is not planned.
Indicators do not give accurate signals: the price has crossed 50 MA.
MACD histogram is near the 0 mark.
The Stochastic Oscillator is located in the neutral zone, the %K line has crossed the %D line. There are no signals at the moment.
Trading recommendations
Support levels: 1.32400, 1.32200, 1.31900
Resistance levels: 1.32700, 1.33000, 1.33250
If the price fixes below 1.32400, expect further correction toward 1.32000.
Alternatively, the quotes could grow toward 1.32900-1.33100.
The USD/JPY currency pair
Technical indicators of the currency pair:
Prev Open: 110.071
Open: 109.813
% chg. over the last day: -0.28
Day’s range: 109.730 – 109.912
52 wk range: 104.45 – 113.53
USD/JPY currency pair continues to trade in a flat. The technical pattern is ambiguous. The trading instrument tests the local supply and demand zones at 109.550-109.700 and 110.000-110.150, respectively. Investors are still concerned about the further spread of coronavirus from China, which supports the demand for safe haven currencies. Today the focus is on the US economy statistics. We recommend opening positions from key levels.
The news background on the Japanese economy is calm.
Indicators do not give an accurate signal: 50 MA crossed 100 MA.
MACD histogram is near the 0 mark. No signals at the moment.
The Stochastic Oscillator is in the neutral zone, the %K line has crossed the %D line. There are no signals at the moment.
Trading recommendations
Support levels: 109.700, 109.550, 109.300
Resistance levels: 110.150, 110.400
If the price fixes below 109.700, consider selling USD/JPY, the price will be moving toward 109.400-109.200.
Alternatively, the quotes could grow toward 110.250-110.400.
As we approach the weekly close, forex traders around the globe will certainly keep an eye on today’s US Retail Sales numbers at 1330 GMT.
Particularly interesting will the data set be for the USD/JPY, which has shown some interesting developments over the last days.
Not only were the US yields unable to profit from solid US economic data last week, but the subdued reaction to Fed chairman Powell’s neutral (and thus in our opinion, USD-bullish) comments at his semi-annual testimony does not bode well for the USD/JPY.
Certainly, the USD/JPY went for another stint up to 110 the last days, mainly driven by rising risk appetite among market participants, particularly in Equity markets, thus driving the Carry trade funding currency JPY lower.
But the fact that the comments from Powell fell on deaf ears among market participants who still expect, with a likelihood of around 80%, the Fed to cut rates at least once by 25 basis points in 2020 (according to the Fed Watch Tool and as of last Thursday), means: if US Retail Sales disappoint today, a sharper drop lower and bounce against 110.00 in the USD/JPY seems likely.
On the other hand, even a better than expected print should be carefully reviewed, any push above 110.00 in the USD/JPY may be short-lived with the USD/JPY finding a stronger zone of resistance around 110.30/70:
Source: Admiral Markets MT5 with MT5-SE Add-on USD/JPY Daily chart (between December 4, 2018, to February 13, 2020). Accessed: February 13, 2020, at 10:00pm GMT – Please note: Past performance is not a reliable indicator of future results, or future performance.
In 2015, the value of the USD/JPY increased by 0.5%, in 2016, it fell by 2.8%, in 2017, it fell by 3.6%, in 2018, it fell by 2.7%, in 2019, it fell by 0.85%, meaning that after five years, it was down by 9.2%.
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China has a monopoly on one of the most strategic metals on the planet, and Washington is anxious to change that.
Global dominance at this point in the game means control of the rare earths elements that form the backbone of existing technology and the future of technology, and while everyone is busy playing at war with oil and gas, Beijing is busy sitting on a monopoly of our most precious strategic metals.
There are 16 metals in total that form the world’s strategically critical rare-earth elements–and China controls the supply of every single one because it controls 96% of production.
One of these crucial metals is Cesium.
It’s worth up to twice the price of gold, ounce for ounce, there are only three producing mines in the world, and all of them are controlled by China.
The only question in this game now is whether there is any chance for North America to get its hands-on new cesium of its own to get out from under a Chinese monopoly.
But while there are only three cesium mines in the world, the potential is in new supply. Of five cesium occurrences in Canada’s Ontario province, a small-cap Canadian explorer called Power Metals owns 100% of three of them (West Joe, Tot Lake and Marko).
The company discovered the pegmatites at West Joe Dyke in August 2018, intersecting high-grade cesium mineralization in six drill holes when it was targeting lithium instead.
So, the focus now is not on what has been lost to China, but the promise of new North American critical cesium.
Exactly How Strategic Is Cesium?
Cesium is extremely rare globally. In May 2018, the United States Department of the Interior included lithium, cesium and tantalum on its list of Critical Minerals.
The supreme technological war of global dominance can’t be won without these metals, so whoever controls them has the upper hand.
Cesium is described by the German Institute for Strategic Metals (ISE) as “the most electropositive of all stable elements in the periodic table”, and the heaviest of the stable metals. Cesium is “extremely pyrophoric, ignites spontaneously when in contact with air, and explodes violently in water or ice at any temperature above -116 ° C”.
Laboratories use cesium compounds for strategic organic chemistry, including in x-ray radiation for cancer treatments.
The list of commercial and industrial applications is long and varied, from catalyst promoters, glass amplifiers and photoelectric cell components, to crystals in scintillation counters, and getters in vacuum tubes.
Much cesium demand also comes from the oil and gas industry, which uses cesium formate brines in drilling fluids to prevent blow-outs in high-temperature, over-pressurized wells.
In terms of world dominance, the “cesium standard” is the key. This is the standard by which the accurate commercially available atomic clocks measure time, and it’s vital for the data transmission infrastructure of mobile networks, GPS and the internet.
That means it has serious defense applications as well, including in infrared detectors, optics, night vision goggles and much, much more.
At high purity levels, using the 2018 price for 99.98% pure cesium metal, it’s worth about $79 per gram–twice the price of a gram of gold, according to renowned geologist Mickey Fulp. Most uses required 98% pure cesium, which was set at about $39 for 25 grams in 2018. Otherwise, it’s hard to get a world market price on cesium because there is no trading of this strategic metal.
But imagine China being able to starve manufacturers of something like cesium, which would seriously disrupt U.S. industry and hinder the development of critical military equipment. That’s exactly why this rare metal was left off Washington’s tariff lists in the trade war back-and-forth.
But Dr. Julie Selway, a key geologist for the Ontario Geological Survey during the tantalum boom of the early 2000s, and now VP of exploration for Power Metals, says the three properties the company is drilling are hoped to have similar finds as the strategically important Sinclair mine in Australia.
“They are shipping their resource, which they say is higher than 10% cesium-oxide, and ours have some that are between 12% and 14% of cesium-oxide,” Selway–one of the world’s most renowned experts on pegmatites–told Oilprice.com.
China has dominated rare-earths since the 1990s with power in this sector that rivals OPEC for oil–even if it doesn’t make the headlines like oil and gas does.
In 2010, China cut back on exports, triggering major price spikes all over the world because of the critical nature of these metals to the tech industry.
That woke Washington from its slumber, but only slightly.
Beijing’s next move, according to the Wall Street Journal, was to manipulate the market so that rare earth elements (RREs) were cheaper in China than outside the country. What this did was prompt some major manufacturers and tech industries to set up shop in China, where they could get supplies at a lower cost.
In the entire world, there are only three pegmatite mines that can produce cesium: one is the Tanco mine in Manitoba, the second is the Bitika mine in Zimbabwe, and the third is the Sinclair mine in Australia.
Where does China fit into this picture? It controls them all, beyond its own borders, with few players like Power Metals and its three-play Cesium venue which could challenge that total control.
Washington’s emergence from its cesium slumber, however, was short-lived.
According to Fulp, speaking to Kitco, a United States company essentially sold off its control of cesium to Sinomine Resources of China last summer–even after the U.S. placing the metal on the critical list. Prior to this June 2019 deal, cesium production was largely controlled by Boston-based Cabot Corporation, which owned the Tanco mine in Manitoba, but which also has operations in China. This mine was shut down in 2015, with demand met from stockpiles.
Now, Tanco and Bitiki are no longer producing, but Sinomine Resources Group holds all the cesium ore stockpiles.
What that means is that this playing field isn’t just of strategic proportions–but it’s locked up.
The only company in the cesium supply chain right now is Chinese, and one of the only companies on the radar for potential commercial cesium supplies in North America is Canadian junior Power Metals, which is hoping to prove that it’s sitting on the world’s fourth minable deposit of the critical metal.
That’s why, finally, in December 2019, the United States and Canada agreed on a strategy to reduce the need for rare-earth metals mined or controlled by China.
Other companies shaking up China’s rare-earth dominance:
Teck Resources (NYSE:TECK, TSX:TECK)
Teck could be one of the best-diversified miners out there, with a broad portfolio of Copper, Zinc, Energy, Gold, Silver and Molybdenum assets. Its free cash flow and a lower volatility outlook for base metals in combination with a potential trade war breakthrough could send the stock higher in H2 of this year.
Teck’s share price stabilized last year and many investment banks now see the stock as undervalued. Low prices for Canadian crude and disappointing base metals prices weighed on Q4 earnings.
Despite its struggles, however, Teck Resources recently received a favorable investment rating from Fitch and Moody’s, and will likely benefit from its upgraded score. “Having investment grade ratings is very important to us and confirms the strong financial position of the company,” said Don Lindsay, President and CEO. “We are very pleased to receive this second credit rating upgrade.”
Turquoise Hill Resources (NYSE:TRQ ,TSX:TRQ)
Turquoise is a mid-cap Canadian mineral exploration and development company headquartered in Vancouver, British Columbia. Its focus is on the Pacific Rim where it is in the process of developing several large mines.
The company mines a diversified set of metals/minerals including Coal, Gold, Copper, Molybdenum, Silver, Rhenium, Uranium, Lead and Zinc. One of the fortes of Turquoise hill is its good relationship with mining giant Rio Tinto.
Turquoise has seen its share price languish last year, and the successful development of its world-class Oyu Tolgoi project in Mongolia is of utmost important to the future of this miner.
Pretium Resources (NYSE:PVG, TSX:PVG)
This impressive Canadian company is engaged in the acquisition, exploration and development of precious metal resource properties in the Americas. Pretium has an impressive portfolio and if you can catch the stock while the price is right, there could be huge opportunity for upside. Additionally, construction and engineering activities at its top location continue to advance, and commercial production is targeted for this year.
With Pretium’s variety of assets, this mining giant is a key figure in Canada’s resource realm. Investors know a good thing when they see it, and have definitely taken note of this company’s ambitious and forward-looking drive.
Magna International (NYSE:MGA, TSX:MG)
Based in Aurora, Ontario, Magna is a global automotive supplier is gutsy and innovative–and definitely tuned to the obvious future–clean transportation. A great catalyst is its development of a combo electric/hydrogen vehicle–a fuel cell range-extended EV (FCREEV). It’s not going to produce them (for now, at least) but plans to use the model to show off its engineering and design prowess and produce elements of the electric drivetrain and contract manufacturing. It’s insightful, forward-thinking and smart value/low cost for shareholders.
Agnico Eagle Mines Ltd (NYSE:AEM, TSX:AEM)
Canadian based gold producer, Agnico Eagle Mines is an especially noteworthy company for investors. Why? Between 1991-2010, the company paid out dividends every year. With operations in Quebec, Mexico, and Finland, the company also is taking place in exploration activities in Europe, Latin America, and the United States.
While Agnico primarily focuses on gold, it made this list because it’s a prime example of sustainability and environmental consciousness, and that means everything in a world rapidly shifting away from traditional mining.
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Forward-Looking Statements
This news release contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this release include that prices for cesium will retain value in future as currently expected; that PWM can fulfill all its obligations to maintain its properties; that PWM’s property can successfully mine commercial quantities of cesium; that the three properties the company is drilling are hoped to have similar finds as the strategically important Sinclair mine in Australia; that occurrences and indications of a commercially sized deposit become reality; that high grades found in samples are indicative of a high grade deposit; and that PWM will be able to carry out its business plans. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include that aspects or all of the properties’ development may not be successful, mining of the cesium may not be cost effective, the price of cesium may not stay high and it may never be profitable to mine cesium; PWM may not raise sufficient funds to carry out its plans, changing costs for mining and processing; increased capital costs; the timing and content of upcoming work programs; geological interpretations and technological results based on current data that may change with more detailed information or testing; potential process methods and mineral recoveries assumptions based on limited test work with further test work may not be viable; competitors may offer cheaper cesium; more production of Cesium could reduce its price; alternatives could be found for cesium; the availability of labour, equipment and markets for the products produced; and despite the current expected viability of its projects, that the minerals cannot be economically mined on its properties, or that the required permits to build and operate the envisaged mines cannot be obtained. The forward-looking information contained herein is given as of the date hereof and the Company assumes no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.
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By TheTechnicalTraders – Our Adaptive Dynamic Learning predictive modeling system is suggesting Gold will rally above $1650 within the next 2 to 4 weeks, then settle into a narrow price range above $1600. If you’ve followed our analysis of Gold over the past few months and years, you already know we expect Gold to rally above $1750 this year and to continue to move higher attempting to breach the $2100 level. It is just a matter of time as far as we are concerned where Metals begin a massive upside rally as the global debt markets become an issue throughout the world.
Right now, there is a very clear opportunity for Gold to rally nearly $100 over the next few weeks. Our ADL predictive modeling system is suggesting this really should begin very soon and will likely propel the price of Gold to levels above $1640 before March 15. Of course, as we’ve seen before if price stays below the $1600 level for another few weeks, this will set up a “price anomaly” where the price will, at some point, attempt to rally very aggressively to the upside to make up the difference.
Weekly Gold ADL Chart
This Weekly Gold ADL chart highlights the predicted price movement higher, above $1640, then sideways afterward – setting up a new momentum base. You can see how Gold enters rally phases, then bases for 5 to 10+ weeks. We believe this next move higher will be a continued advancement leg in Gold that may prompt a short momentum base before another rally sets up near April/May 2020.
Monthly Gold ADL Chart
This Monthly Gold ADL chart highlights our overall trend expectations for Gold going out 8+ months into the future. We believe this upside price rally is ultimately targeting levels above $1800. It will likely attempt this move in multiple upside price legs containing various pause/momentum basing events. Yet we believe the ultimate upside objective in Gold is really $1800 to $1850 before a new downside leg will setup. That downside leg will end fairly quickly, then the next wave of buying will push the price above $2100 and ultimately much higher.
If you have not yet seen our silver and silver miner charts and predictions see this article.
Concluding Thoughts:
This is an excellent opportunity for skilled traders to attempt to buy Gold or Silver near current levels before the upside breakout pattern drives prices 4% to 6% higher ($75 to $100). Pay attention to our research and be prepared for these bigger sector swings. 2020 is going to be a great year for technical traders.
Learn how we can help you find and execute better trades and turn the extreme volatility into solid profits. Read our research and see what our research team has been predicting over the past few months. We dedicate our efforts to helping you find great trades and helping you protect your assets.
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The virus outbreak is showing possible signs of steadying, although the number of accumulated cases will continue to rise. The economic impact on the ASEAN depends on the outbreak’s duration and severity.
With the new coronavirus – the 2019 novel coronavirus acute respiratory disease (2019-nCoV ARD) – there are now (2 pm Wuhan time, Feb 11) more than 42,600 confirmed cases worldwide. If the current pace prevails, that figure will exceed 50,000 in the coming days.
And yet, there may be something else going on behind the reported figures.
Toward possible turnaround?
On the one hand, the number of confirmed cases outside China is less than 500, and there have been only two deaths, which both are associated with the virus epicenter Wuhan. While these numbers are likely to increase in the near future, the low starting-point suggests that China’s costly and draconian measures may have saved many lives within and particularly outside China.
More importantly, the pace of the contagion may be decelerating in China. In international media, the spotlight is mainly on the absolute numbers of accumulated cases and deaths, which are likely to increase. And yet, the relative increase of these accumulated cases has decreased ever since mid-January.
Even more importantly, the relative daily increase of new cases, which have critical impact on the longer-term duration and severity of the outbreak, may be amid a crossroads.
The confirmed new cases increased steadily from mid-January soaring to almost 3,900 on February 4. Since then the numbers have fallen below 2,700. In relative terms, the change has been almost progressive, having plunged from almost 350% to negative (Figure).
FigureIs the virus outbreak at a crossroads?
Confirmed New Cases, Jan 1 to Feb 8, 2020
Source: DifferenceGroup. Data from China’s National Health Commission;
The big question is, will the trend prevail. While the data could indicate a possible turnaround in the virus outbreak, there is no assurance that the deceleration will prevail. It is well known that virus trend lines can zigzag. Consequently, complacency in the struggle against the outbreak is no option.
Also, all projections rely on data accuracy and presume the absence of adverse mutations within and outside China. Furthermore, the trend lines are predicated on the idea that there will be no new, major outbreaks as people in China are now returning to their homes after the holiday period. Finally, the trend is predicated on the idea that containment will succeed outside China, where precautions have been lagging in many countries, including high-income nations.
As WHO chief Tedros Adhanom Ghebreyesus has warned, confirmed cases of coronavirus being transmitted by people who have never traveled to China could be the “tip of the iceberg.”
Economic impact on Southeast Asia
Since mid-2018, ASEAN countries have suffered collateral damage associated with the US-Sino trade friction, slowing world trade and eroding global growth. Even before the outbreak, regional growth prospects were downgraded by 0.3-0.4 percentage points for 2019-2020. Now, Southeast Asian economies may face new downgrades associated with the outbreak’s likely economic impact (on the basic scenarios, see my previous TMT column of Feb 3, 2020).
Last December, the Asian Development Bank (ADB) revised its forecast down to 4.4% for 2019 but maintained at 4.7% for 2020. The latter was predicated on the anticipated mild recovery in China and the US. It will be downgraded.
Prior to the virus outbreak, growth forecasts were downgraded for Singapore and Thailand, but upgraded for Brunei and Vietnam, with the remaining ASEAN economies on track to meet forecasts, despite export declines and weaker investment weighing on growth prospects.
In early 2020, downgrades are likely to deepen in Singapore and Thailand, while positive prospects in Vietnam will not prevail. Growth forecasts in Taiwan and East Asia – South Korea and Taiwan – will be penalized, due to anticipated supply chain disruptions, particularly in electronics, machinery and textiles.
Growth prospects in Singapore have eroded significantly and will be compounded by the outbreak. The 2020 real GDP forecast could be downgraded to less than 1%. In Hong Kong, political volatility coupled with the outbreak will extend the technical recession into the 1st quarter.
The rest of Southeast Asia – Malaysia, Indonesia, Lao, Cambodia, Myanmar, and the Philippines – will find it hard to stay on track with forecasts. In the past year, softening domestic investment exacerbated export woes in most larger economies—Indonesia, Malaysia, Philippines, Singapore, and Thailand—but domestic consumption held up to cushion the slowdown.
Since household spending is the first victim of the virus outbreak, larger economies will not be immune to it. But in each case, the specific country impact will depend on the duration and severity of the virus spread.
About the Author:
Dr. Dan Steinbock is an internationally recognized strategist of the multipolar world and the founder of Difference Group. He has served at the India, China and America Institute (USA), Shanghai Institutes for International Studies (China) and the EU Center (Singapore). For more, see https://www.differencegroup.net
The original commentary was released by The Manila News on Feb. 10, 2020. The data has been updated (Feb 11, 2020)
AUDUSD is trading at 0.6715; the instrument is moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test the cloud’s upside border at 0.6725 and then resume moving downwards to reach 0.6575. Another signal to confirm further descending movement is the price’s rebounding from the descending channel’s upside border. However, the scenario that implies further decline may be canceled if the price breaks the cloud’s upside border and fixes above 0.6775. In this case, the pair may continue growing towards 0.6845 and form a Double Bottom reversal pattern. After breaking the support area and fixing below 0.6645, the price may resume moving downwards.
NZDUSD, “New Zealand Dollar vs US Dollar”
NZDUSD is trading at 0.6446; the instrument is moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test the cloud’s upside border at 0.6455 and then resume moving downwards to reach 0.6295. Another signal to confirm further descending movement is the price’s rebounding from the descending channel’s upside border. However, the scenario that implies further decline may be canceled if the price breaks the cloud’s upside border and fixes above 0.6525. In this case, the pair may continue growing towards 0.6605.
USDCAD, “US Dollar vs Canadian Dollar”
USDCAD is trading at 1.3251; bulls still haven’t been able to fix the price above 1.3365. The instrument is moving inside Ichimoku Cloud, thus indicating a sideways tendency. The markets could indicate that the price may test the cloud’s downside border at 1.3235 and then resume moving upwards to reach 1.3435. Another signal to confirm further ascending movement is the price’s rebounding from the rising channel’s downside border. However, the scenario that implies further growth may be canceled if the price breaks the cloud’s downside border and fixes below 1.3205. If the instrument breaks 1.3325 close to the cloud’s upside border, the price may resume moving upwards.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
As we can see in the H4 chart, the descending tendency continues. After breaking the channel’s downside border, EURUSD has completed several reversal candlestick patterns, such as Hammer. Right now, the pair may start reversing. We may assume that later the price may test the channel’s downside border and then resume its decline to reach the support level at 1.0849. However, one shouldn’t exclude a possibility that the price may return inside the channel and grow towards 1.0991.
USDJPY, “US Dollar vs. Japanese Yen”
As we can see in the H4 chart, USDJPY is still moving inside the rising channel. After forming another Hanging Man pattern, the pair is reversing. The current situation implies that the pair may finish the correction and resume growing to reach the resistance level at 110.20. At the same time, the pair may choose another scenario, according to which it is expected to return to 109.00 without testing the resistance level.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
The single currency keeps losing positions against USD. Yesterday the drop in quotations exceeded 40 points. At the moment the trading instrument is consolidating near the local support at 1.08650. The round level 1.09000 is already a mirror resistance. In the nearest future the technical correction after the prolonged fall is not ruled out. Today investors will evaluate economic reports from the USA. We recommend opening positions from key levels.
The Economic News Feed for 13.02.2020:
– US inflation data (US) – 15:30 (GMT+2:00);
– Initial Jobless Claims (US) – 15:30 (GMT+2:00);
The indicators signal the sellers’ strength: the price has fixed below 50 MA and 100 MA.
The MACD histogram is in the negative zone, which indicates a bearish sentiment.
The Stochastic Oscillator is in the neutral zone, the %K line is above the %D line, which gives a signal to buy EUR/USD.
Trading recommendations
Support levels: 1.08650, 1.08300
Resistance levels: 1.09000, 1.09400, 1.09700
If the price fixes below 1.08650, expect the quotes to descend toward 1.08300-1.08100.
Alternatively, the quotes could grow toward 1.09300-1.09500.
The GBP/USD currency pair
Technical indicators of the currency pair:
Prev Open: 1.29518
Open: 1.29597
% chg. over the last day: +0.04
Day’s range: 1.29441 – 1.29647
52 wk range: 1.1959 – 1.3516
The technical picture on the GBP/USD currency pair is ambiguous. At the moment the sterling is consolidating. Financial markets participants are waiting for additional drivers. The local support and resistance levels are 1.29400 and 1.29800, respectively. The trading instrument has potential for recovery. We recommend to pay attention to the US economic news background. Positions should be opened from key levels.
Publication of important economic reports from the UK is not planned.
Indicators do not give accurate signals: 50 MA crossed 100 MA.
MACD histogram is near the 0 mark.
The Stochastic Oscillator is located in the neutral zone, the %K line is above the %D line, which indicates a bullish mood. .
Trading recommendations
Support levels: 1.29400, 1.28750
Resistance levels: 1.29800, 1.30100, 1.30450
If the price fixes above 1.29800, expect the quotes to rise toward 1.30200-1.30500.
Alternatively, the quotes could descend toward 1.29000-1.28800.
The USD/CAD currency pair
Technical indicators of the currency pair:
Prev Open: 1.32870
Open: 1.32516
% chg. over the last day: -0.23
Day’s range: 1.32406 – 1.32646
52 wk range: 1.2949 – 1.3566
Bearish sentiment prevails on the USD/CAD currency pair. The trading instrument has set new local lows. At the moment the CAD is consolidating. The key range is 1.32400-1.32700. The technical pattern signals further correction of USD/CAD quotes. Additional support for the Canadian dollar is provided by the oil price recovery. Positions should be opened from key levels.
The Economic News Feed for 13.02.2020:
Indicators point to the strength of sellers: the price has fixed below 50 MA and 100 MA.
Histogram of MACD is in the negative zone, which indicates a bearish sentiment.
The Stochastic Oscillator is in the neutral zone, the %K line is above the %D line, which gives a signal to buy USD/CAD.
Trading recommendations
Support levels: 1.32400, 1.32200, 1.31900
Resistance levels: 1.32700, 1.33000, 1.33250
If the price fixes below 1.32400, expect further movement toward 1.32000.
Alternatively, the quotes could grow toward 1.32900-1.33100.
The USD/JPY currency pair
Technical indicators of the currency pair:
Prev Open: 109.783
Open: 110.071
% chg. over the last day: +0.13
Day’s range: 109.748 – 110.090
52 wk range: 104.45 – 113.53
The USD/JPY currency pair is consolidating near the two-month highs. The technical picture is ambiguous. At the moment local support and resistance levels are at 109.700 and 110.150, respectively. Technical correction is not ruled out in the nearest future. Today we recommend to pay attention to the economic releases, as well as the dynamics of the US government securities yield. Positions should be opened from key levels.
The news background on Japanese economy is calm.
Indicators do not give an accurate signal: 50 MA crossed 100 MA.
MACD histogram is near the 0 mark. No signals at the moment.
The Stochastic Oscillator is located in the oversold area, the %K line has crossed the %D line. There are no signals at the moment.
Trading recommendations
Support levels: 109.700, 109.550, 109.300
Resistance levels: 110.150, 110.400
If the price fixes above 110.150, consider buying USD/JPY. The movement will tend toward 110.400-110.600.
Alternatively, the quotes could correct toward 109.400-109.200.
The US dollar has become stable against a basket of major currencies. The dollar index (#DX) is consolidating near local highs. Yesterday, Fed Chairman Powell gave a speech for Congress again. The official said that the Fed had little reason to cut rates, as the country’s economy was in good condition despite the spread of coronavirus.
Today, markets are under pressure after China’s Hubei province reported nearly 15,000 new cases of the disease, as the method of counting infected people has changed. At the same time, the number of deaths in the province increased by a record 242 to 1.310. These events support the “safe haven” currencies. The single currency has reached two-year lows.
The “black gold” prices are moving in different directions. Currently, futures for the WTI crude oil are testing the $50.85 mark per barrel.
Market Indicators
Yesterday, there was the bullish sentiment in the US stock market: #SPY (+0.64%), #DIA (+0.95%), #QQQ (+0.97%).
The 10-year US government bonds declined. At the moment, the indicator is at the level of 1.58-1.59%.
The Economic News Feed for 13.02.2020:
– Data on inflation in the US at 15:30 (GMT+2:00);
– Initial jobless claims in the US at 15:30 (GMT+2:00).
The Philippines is well-positioned to cope with the economic impact of the virus outbreak, but is not immune to its human costs.
Since the Philippines is exceptionally prone to both extreme climate and geological events, Senator “Bong” Go’s bill for the creation of a Department of Disaster Resilience should be taken seriously. As the outbreak has shown, new calamities are just a matter of time. Proactive preparation matters.
The human costs of the virus have so far been negligible in the Philippines. While the number of patients under investigation has climbed to almost 320, of which two-thirds are Filipinos and a third Chinese nationals. As of yet, there remain only three positive cases in the Philippines and all are linked with Wuhan, the epicenter of the crisis.
But even if human costs can be kept to the minimum, economic impact will be tangible.
Expected economic impact
In 2020, Philippine growth prospects were initially seen as more favorable, In particular, the ramped-up government spending related to the “Build, Build, Build” program was seen to buttress growth. To degree, structural growth potential and Duterte government’s economic policies can offset some of the adverse forces associated with the trade wars, the Taal eruption, even the virus outbreak. Yet, new political policy mistakes, such as the 2019 budget debacle, could change the picture.
After the set of rate cuts to support growth, lower borrowing costs and liquidity from reserve-rate-requirement (RRR) reductions can still support domestic demand. As elsewhere in Southeast Asia, the outbreak has already affected travel and tourism.
Since China is the second-largest source of tourists in the country, the travel ban from the Chinese mainland coupled with the expected 10% reduction in visitors from other countries will penalize economic output. The decline is estimated at $215 million within a month, by the National Economic and Development Authority.
If the outbreak persists with its current impact level until June, the GDP reduction is anticipated to climb to 0.3%, according to NEDA’s chief Ernesto Pernia. If it will prevail until December, the reduction would more than double to 0.7% ($2.6 billion).
Growth scenarios
In view of the current outbreak data, the estimate based on shorter duration still seems more likely. Yet, its economic impact could prove more significant than anticipated. If, however, the outbreak persists until the end of summer, its adverse impact would prove greater than anticipated (on the basic scenarios, see my previous TMT column of Feb 3, 2020).
Before the outbreak, the International Monetary Fund (IMF) projected Philippine GDP growth to rise to 6.3% in 2020, underpinned by government spending acceleration and recent monetary policy easing. Meanwhile, above-consensus forecasts hovered at 6.7%. S
ince the domestic drivers of the Philippine growth remain solid, a benign virus impact scenario might not undermine such horizons.
Yet, the critical caveat remains. These scenarios depend on the duration and severity of the outbreak – and how smoothly it can be managed in the Philippines.
About the Author:
Dr. Dan Steinbock is an internationally recognized strategist of the multipolar world and the founder of Difference Group. He has served at the India, China and America Institute (USA), Shanghai Institutes for International Studies (China) and the EU Center (Singapore). For more, see https://www.differencegroup.net
The original commentary was released by The Manila News on Feb. 10, 2020. The data has been updated (Feb 11, 2020)
