Tuesday, June 15

FDA approves new Covid-19 vaccines from J&J Company

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Fundamental outlook

 

THE US FDA advisory panel on Friday backed Johnson & Johnson’s single-shot Covid-19 vaccine for emergency use. The company said there would be 20 million doses ready for administration by the end of March.

US GDP for 4Q was revised upward to 4.1 per cent, missing consensus’ expectations. Weekly claims for jobless benefits went down to 730,000 for the week ended February 20.

Fed chairman Jerome Powell said the inflation is still soft and policymakers are committed to do whatever it could to help stimulate the economy. Before the weekend, the Dow market closed at 30,932 points after declining 469 points due to rising fear of the inflation. US 10-year bonds yield climbed to above 1.4 per cent, the highest in 12 months.

Due to the rising dollar index, gold prices fell to an eight-month low at US$1,720 per ounce, rebounding slightly. WTI crude prices still traded above US$60 per barrel due to the cold weather in Texas.

 

Technical forecast

 

US dollar/Japanese yen traded higher from 105 to 106.50 last week as the dollar rose. The market might continue to behave in firm sentiment while staying resilient above 107. The overall range is expected to be contained from 106 to 107.50 and probably to be led by the dollar.

Euro/US dollar dipped on Friday after the dollar gained strength. We forecast strong resistance at 1.22 and the bears will probably drive lower. The downside target is identified at 1.19 to 1.195 with many bargain-hunters waiting. Traders are reminded to be prudent.

British pound/US dollar saw strong resistance at 1.42. We project the bears could continue and overall trend could be weak. We have identified the support to lie at 1.38 while topside resistance might emerge at 1.41. Traders need to be cautious in case the prices fall beneath 1.38.

WTI Crude prices fell short from US$64 per barrel last week and turned down. We target the market might be prone to trade lower as the dollar regains strength. The range is expected to be contained from US$59 to US$63 per barrel with more selling forces ambushing the market. Traders are advised to follow the momentum of the market before gauging the trend’s direction.

Crude Palm Oil (FCPO) Futures on Bursa Derivatives traded in firm sentiment and almost reached RM3,800 per metric tonne last week. May Futures contract settled at RM3,743 per metric tonne on Friday. The market demand could encounter strong selling forces at RM3,800 per metric tonne or higher. The support will emerge at RM3,600 per metric tonne but exercise caution if it breaks beyond this region.

Gold prices plunged through US$1,760 per ounce on Friday and settled at US$1,733 per ounce. We reckoned the bears could drive down further to test US$1,700 per ounce before a rebound. The overall range could be contained from US$1,700 to US$1,760 per ounce with bargain-hunting at bottom prices. Long traders should exercise patience for picking bottom after mid-week.

Silver prices behaved in weak sentiments last week. The resistance could emerge at US$27.30 per ounce while the trend could face more sellers. We foresee the first support at US$26 per ounce and breaking beyond here could lead to US$24.50 per ounce as our next support area. Keep a close watch on gold prices that will lead the silver’s trend.

 

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]