LAST Monday, the US Commerce Department announced it has granted a 90-day license for mobile phone companies and internet broadband providers working with Huawei to keep existing networks online and protect users from security risks.
The US Secretary of State Mike Pompeo said Huawei Technologies chief executive officer Ren Zhengfei lied about not sharing users’ database with the Chinese government. This allegations were denounced by the Beijing government. President Donald Trump suggested that Huawei could be part of the negotiating deal with Beijing’s government amid the tough trade talk.
On Friday, Pompeo announced President Trump’s approval to sell US$7 billion arms deals to Saudi Arabia to counter Iran’s threats. Trump also said he is prepared to send 1,500 troops to the Middle East.
Chinese President Xi Jinping said China is going to embark on a new long March. He does not mention the trade war with US but analysts interpret China will not submit to unfavourable US trade deals.
After being rejected for three times, UK Prime Minister Theresa May will make her fourth proposal in June that will include a vote by lawmakers for a second referendum if they approve her deal. Simultaneously, May announced her resignation on June 7. She expressed regret for not meeting the consensus and will let the next contender resume office.
US dollar/Japanese yen traded lower after mid-last week as the dollar fell. We reckon the trend will slide further in the coming week with resistance emerging at 110. Downside will likely reach 109 to 109.50 before some bargain-hunting steps into the market.
Euro/US dollar reveresed after bottoming out at 1.11. We predict the trend will rise further as the dollar recedes. The range is expected to move from 1.1150 to 1.13 with some selling forces ambushing above 1.125.
British pound/US dollar temporarily bottomed out at 1.26. Topside target may reach 1.2850 while still moving sideways within this range. The Brexit uncertainties will continue to create a whipsaw effect in the market and traders are observing the impact of May’s resignation in two weeks’ time and the outcome of the Article 50.
Gold prices began to recover according to the day-chart. We foresee the trend will stay at US$1,275 per ounce and will likely reach US$1,300 per oz. In case of dipping beneath US$1,270 per oz, the bulls may wane off. Long-term traders are advised to control their risk though they stand higher chance of profiting from market.
WTI Crude prices was at US$57.50 per barrel support last week. We forecast the trend will recover in the coming week especially after US approved the US$7 billion arms deals with Saudi Arabia. The market is expected to move from US$58 to US$61 per barrel while waiting for more fundamentals to lead the trend.
Silver prices exhibited good support at US$14.40 per oz last week. However, the range is still expected to consolidate this week in a narrow region from US$14.40 to US$14.80 per oz before breaking higher. Gold will be a leading factor in the silver’s movement while the dollar weakens. Abandon your long-view in case of sinking beneath US$14.40 per oz.
Crude Palm Oil (FCPO) Futures on Bursa Derivatives fell last week due to lower demand in soy oil and new European Union’s ruling on palm oil as biofuels. August futures closed at RM2,014 per MT on Friday. This week, we foresee a narrow range from RM2,000 to RM2,080 per MT with stagnated activity. Abandon your long-view in case the trend falls beneath RM2,000 per MT.
Dar Wong has 30 years of trading and hedging experiences in the global financial markets. The opinion is solely his own. He can be reached at [email protected]