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    Morning Report – Wednesday 21st August




    Hong Kong enters a crucial period

    (Bloomberg 21/08/2019) - The next six weeks are particularly sensitive for Hong Kong’s pro-democracy protests. Oct. 1 is the 70th anniversary of the People’s Republic of China, and will feature a military parade through Beijing personally inspected by President Xi Jinping. That has raised some fears that Xi will seek to get Hong Kong under control by then to avoid any headline-stealing violence. Much may depend on what happens in the first week of September, when students who have been driving the demonstrations are set to return to universities and high schools. In the meantime, here’s how China is trying to quell the protests without sending in troops.

    Let’s Not Make a Deal

    U.S.-China trade talks are likely to continue despite friction over Huawei. U.S. Secretary of State Mike Pompeo said other firms present national-security risks but didn't name them during an interview with CBS. He also called on Beijing to respect Hong Kong demonstrators' rights and the city's autonomy in order to fulfill its promises—which is important for a trade deal. President Trump showed no urgency to resolve trade friction with China, saying "I'm not ready to make a deal with China." He also called for Russia to be readmitted to the G-7, threatened to tax European automobiles and agreed to drastically scale back plans to slash billions of dollars in foreign assistance.

    Conte Concedes

    Italian Prime Minister Giuseppe Conte said he'll resign, and pointed the finger for Italy's current political crisis at "irresponsible" Deputy Premier Matteo Salvini. President Sergio Mattarella is expected to accept the resignation and will begin consultations on a possible alternative government Wednesday. Italian bonds rallied, leading euro-area gains, while its benchmark stock index fell.

    Gold prices tightening up as traders await the Fed's next call

    (FXStreet 21/08/2019) - Gold spot and futures climbed a touch on Tuesday, with spot prices rising 0.72% and travelling between a range of between $1,493.18 and $1,508.70 while Gold climbed $4.10, or 0.3%, to settle at $1,515.70 an ounce, clawing back some of the $12, or 0.8%, lost on Monday.

    In other precious metals, September silver gained 20.8 cents, or 1.2%, to $17.148 an ounce, following a 1.1% loss a day earlier and on a spot basis, the metal added 1.60% rising from $16.85 to a higher of $17.19. The ratio between gold and silver was down -0.87%, falling from a high of 88.72 to a low of 87.669.

    Back to the Fed

    Gold will continue to find a bid in a low rate environment and while geopolitics dominate the themes, although, what has been in the background are the macro fundamentals. There is a focus on the Federal Reserve where some analysts are expecting them to pull the trigger again by adding a 25bps cut in September. "We continue to forecast a cut in December, as well," analysts at Standard Chartered called:

    "We believe that heightened trade uncertainty, coupled with ongoing deterioration in global growth, will worry about the Committee. The extent to which global growth deterioration will hurt the domestic economy is uncertain, and there is little precedent on which the Fed can confidently rely. The last time the Fed cut rates because of an external shock was in 1998, when emerging markets, especially China, constituted a far smaller share of global GDP and contributed less to global growth."

    Gold levels:

    Gold prices have morphed into a wide-based symmetrical triangle which could break either way, albeit, considering the macro and geopolitical driving forces, there is a bullish bias in general. The risks in the immediate term are a break below the 1490s and then the 1480s should the Dollar and or risk sentiment bounce back.


    Below are Trading Central's Intraday preference recommendations. Short (SELL) positions and long (BUY) positions have two targets issued which may be used as take profit levels. Above or below a certain figure indicates the pivot level which may be used as a level for stop loss.

    CRUDE OIL Daily – Short positions below 58.70 with targets at 52.30 & 50.60.

    This is general advice only and does not take into account your personal circumstances. “It is the Policy of ForexCT to recommend the use of stop/loss function to reduce risk of significant losses to customers.

    GOLD 30 Minute – Long positions above 1501.00 with targets at 1512.50 & 1517.00.

    EURUSD Daily – Short positions below 1.1185 with targets at 1.1025 & 1.0950

    GBPJPY Daily – Buy above 125.93, rebound towards 136.57.

    AUDUSD Daily – Short positions below 0.6850 with targets at 0.6740 & 0.6670.

    ASX 200 Daily – Short positions below 6630.00 with targets at 6210.00 & 6100.00.

    SILVER Daily – Long positions above 16.6000 with targets at 17.8000 & 18.2000.

    HANG SENG Weekly – Short positions below 27500 with targets at 24550 & 23000.

    This is general advice only and does not take into account your personal circumstances. “It is the Policy of ForexCT to recommend the use of stop/loss function to reduce risk of significant losses to customers.

    Economic Announcements
    (times in AEST)

    Risk Warning
    Trading FX and CFDs involves a substantial degree of risk and should only be undertaken with risk capital. Please consider our PDS and FSG before trading with us. A copy can be found on our website Forex Capital Trading Pty Ltd provides general advice that does not take into account your objectives, financial situation or needs. Investors do not own or have rights to underlying assets. Forex Capital Trading Pty Ltd is regulated by ASIC (AFSL 306400), ABN (69119086270). Forex Capital Trading Pty Ltd’s AFS license and Australian regulation only applies to the financial services being provided in Australia only.

    Posted: August 21, 2019 | 5:55 AM