Fundamental Outlook
CHINESE regulators are clamping down on local companies seeking public listing in foreign markets to avoid the leaking of big data and confidential information. All Chinese companies will need to obtain approval from China Securities Regulatory Commission before planning to list in foreign markets.
On Friday, all the US triple indexes closed at record highs in anticipation of strong earnings reports to be released by large companies in July. Dow benchmark closed at 34,870 points, S&P 500 settled at 4,369 points while Nasdaq Composite wrapped up at 14,701 level.
The finance ministers of G20 countries gathered over the weekend to discuss the global taxation reform. German Finance Minister Olaf Scholz said the implementation may come before 2023.
OPEC+ meeting ended with no deal. OPEC and Russia allies have proposed to add 400,000 barrels of production daily but it was objected by Saudi Arabia. WTI Crude traded in uncertain movements and slowed slightly after mid last week.
Technical forecast
US dollar/Japanese yen dipped to 109.60 after encountering bearish force. We presumed there could be some short-covering actions in the market. The market might be restricted to tight consolidation from 109.50 to 110.50. Beware of an unexpected fall beneath 109.50 in case of a sudden weakening in the dollar.
Euro/US dollar traded sideways last week, bouncing from 1.18 bottoms. We predict the trend could recover slightly with bargain-hunting activity. Tight range is expected from 1.18 to 1.195 under mixed trading sentiment. Heavy selling pressure is expected at 1.12.
British pound/US dollar bounced from 1.38 on Friday after strong buying interest emerged at 1.376. We reckoned the topside will be limited at 1.40 in the wake of a recovery. A tight range trading is expected and traders should remain cautious of swing movements.
WTI Crude prices traded largely in our predicted range last week after the OPEC+ conglomerates concluded a no-deal outcome. The trend would mostly remain unchanged while contain from US$71 to US$76 per barrel. Beware of an unexpected price movement in either direction beyond this aforementioned range which could bring the market into a new headway.
Crude Palm Oil (FCPO) Futures on Bursa Derivatives traded in mixed sentiment last week after topped RM4,000 per metric tonne. Market traders have been busy adjusting positions ahead of the roll-over activity on Thursday. September Futures contract settled at RM3,898 per metric tonne on Friday. The trend might ascend again and reach RM4,050 per metric tonne before the roll-over contract moves to October. Support lies at RM3,700 per metric tonne and long traders should be prudent once this support gives way.
Gold prices traded in a narrow range last week. The market is still held in a consolidated range and limited to US$1,720 per ounce. We project the range could be contained from US$1,780 to US$1,720 per ounce amid whipsaw behaviour. Traders are reminded to be cautious and abstain from aggressive trading.
Silver prices were lower last week as resistance acted onto US$26.50 per ounce. We predict the trend might be trading sideways with no clear direction. Support is still valid at US$25.40 per ounce with bargain-hunting expected. Most market attention could be staked one gold prices.
Dar Wong has more than 30 years of trading and hedging experiences in global financial markets. The opinion is solely his own. He can be reached at [email protected]