Fundamental outlook
PRESIDENT Donald Trump issued an executive order to ban TikTok and WeChat in 45 days, starting August 6.
Microsoft had contemplated acquiring the media company’s operations in US, Canada, Australia and New Zealand.
American jobless claims rose 1.186 million in the week ended August 1, below forecast.
Data clocked above one million reports for 20th straight week.
Payrolls in July increased 1.763 million while unemployment fell to 10.2 per cent.
Both figures were better than expected.
Federal Reserve chairman Jerome Powell said policymakers would not raise rates until US’ inflation reaches two per cent.
Gold is surging to new historical high while unemployment is at its highest rate since the Great Depression.
Analysts are more worried of stagflation moving into the future months.
The Trump administration also reimposed 10 per cent tariffs on aluminium imports from bilateral parties.
Canada retaliated by slapping a new tax on US$2.7 billion worth of US goods.
China trade surplus grew US$62.3 billion in July, beating economic forecast.
The dollar-denominated exports rose 7.2 per cent due to growing demand in medical supplies while imports fell 1.4 per cent from a year ago.
The Bank of England Governor Andrew Bailey said the monetary policy remained unchanged and purchase programme will stay at 745 billion pounds.
However, he reassured that policymakers have no plans for negative rates, for now.
Technical forecast
US dollar/Japanese yen was well supported above 105 last week.
We forecast the trend will continue to rise and possibly reach 107.
Overall range is expected to move from 105 to 107 as the dollar begins to recover.
Euro/US dollar topped 1.19 and fell on Friday.
We expect the trend to trade lower with between 1.165 to 1.19.
The dollar is gradually recovering for the short-term period after falling for many weeks.
Risk control is reminded.
British pound/US dollar reversed down from 1.32 top.
The market trend will likely go lower in profit-taking activity.
We see the trend could wane and stay between 1.29 to 1.315.
The dollar tends to strengthen slightly against the euro.
WTI Crude prices stayed in tight range trading last week.
The market was contained between US$39 to US$42 per barrel and should be status-quo in the coming week until there is a breakout.
We expect the trend to travel downwards should the dollar recover in the near future.
Traders should prepare risk control.
Crude Palm Oil (FCPO) Futures on Bursa Derivatives opened higher last week but traded in a narrow range.
October Futures contract settled at RM2,761 per metric tonne on Friday.
We expect traders to remain sideways until they see a clearer trend.
Movements would likely remain between RM2,700 to RM2,800 per metric tonne until it breaks out of this range for a new directional headway.
Gold prices fizzled out last week from historical high of US$2,071 per ounce.
We predict the trend will continue to go lower due to profit-taking activity.
We have set the target at US$1,950 per ounce for the first retracement in August.
Traders should remain alert and patient when to they plan to re-enter a new position in the gold market.
Silver prices reached a seven-year high but fell off US$30 per ounce last week.
We expect the market to begin in small correction this week.
Traders should prepare to see lower prices at US$26 per ounce if a correction begins.
Swing trading will follow through mixed sentiments.
Stay prudent when picking a new position in the silver market.
Dar Wong has 30 years of trading and hedging experiences in global financial markets. The opinion is solely his own. He can be reached at [email protected].