EFS-The reversal of the impact of French election polls on Sheng Yelen's speech

On the last trading day of the just concluded week, Federal Reserve Chairman Yellen delivered a speech in support of his views3The monthly interest rate hike is relatively clear, but the market trend has changed,USD IndexAccelerate the decline. The weakening of the US dollar is directly related to previous news from Europe. In terms of French election campaigns, the latest poll shows that the support rate of independent candidate Macron from the center has surpassed Le Pen and risen to first place, lifting the possibility of France's Brexit risk. This news has boosted the strength of the euro and thus suppressed the US dollar.
Previously, leader Le Pen's approval rating began to decline due to being investigated. The independent centrist candidate Macron's governing policy was to work closely with the European Union, reduce government nepotism, and vigorously develop funds, which was similar to the ideas of US President Trump. Therefore, after seeing Trump's significant boost to the US economy, the market was full of expectations for Macron, and his approval rating rose to the highest.

We have repeatedly emphasized the analysis of the impact of Yellen's speech on the market,3There is no longer any suspense about monthly interest rate hikes. Under the influence of Trump's weak US dollar policy, every positive news about the US dollar is an opportunity for bulls to sell, but this time they did not expect to withdraw so early and so resolutely. Yellen's conclusion on coffins will have an impact on3The expectation of a monthly interest rate hike is nearing realization, and if the bulls who entered the market do not retreat, it may be difficult to have better shipping opportunities in the future. This once again confirms the behavior of financial markets hyping up buying expectations and selling facts.

Although there will be non farm payroll data from the United States released in the next week, its impact on the market should not be as significant as the progress of the events. Therefore, we have lowered the level of impact of the data on the market, and need to pay attention to the impact of unexpected events in the market, such as the launch of Trump's infrastructure stimulus plan, news of France's election preparations, progress in the Dutch election, and progress in negotiations between the Brexit side and the European Union.

At present, China is holding the "Two Sessions", and over the weekend, Minister of Transportation Li Xiaopeng proposed to promote8000Railway investment1.2The trillion dollar investment in the construction of highways and waterways is consistent with Trump's infrastructure policies and the policy guidelines of French candidate Macron. Currently, the most direct way to drive the economy is still in the direction of infrastructure construction, which is a positive support for the medium to long term trend of commodities.

The following is a summary of important events and data that affect the market:

On Monday, at the beginning of the week, the Asian market responded to the news of a reversal in the weekend French election polls; Evening America1Monthly durable goods orders and factory order monthly rate data; The next morning, Federal Reserve vote committee member Kashkali gave a speech.

On Tuesday, (!!) the new interest rate decision of the Federal Reserve of Australia was announced; Eurozone Q4GDPData release; United States1Monthly trade account data.

Wednesday, (!!) Japan Q4GDPdata Weeklycrude oilAPI、EIAInventory data; United StatesADPEmployment data and wholesale inventory data.

Thursday, (!!!) ChinaCPI、PPIYear-on-year and month on month data; The new interest rate resolution for the Eurozone and subsequent speeches by President Draghi;.

On Friday, (!!!) UK industrial and trade account data; United States2Monthly non farm employment data; The next morning, the drilling platform data of the oil service company.

Specific technical trend analysis,USD IndexThe daily structure has produced a long bearish line, which did not reach the level we previously provided102.5The strong resistance level began to fall, mainly due to the weakened uncertainty risk in the Eurozone, and the market's risk preference sentiment rebounded. A new round of downward trend in the US dollar is expected to begin, with a recent retest101.7Short selling is possible nearby.

The daily structure of the euro against the US dollar is currently testing the support of the middle track of the Bollinger Bands, but if it can be tested below5Daily moving average1.0570The frontline will be more comprehensive, and multiple operations can be attempted near that location,1.0520Stop loss, short-term operation of the euro is the main focus, with the goal of moving up the Bollinger Bands1.0690Near.

The daily structure of GBP/USD has been tested to a very standard downward trajectory in the downward channel1.2200Nearby, there is a possibility of ending the decline in the short term, but we still need to stand up5Daily moving average verification, operation can be done during backtesting1.2260Short positions near the support level,1.2220Stop loss.

The current short position pattern of the US dollar against the Japanese yen is relatively standard and can be chosen114.2Short selling operations nearby,115Stop loss. At present, there is a possibility that the platform structure may come to an end, and it will begin to decline deeply in the future, breaking through the Bollinger Bands and establishing a basic downward trend. Therefore, in the short term, light positions will participate first, and after breaking through the Bollinger Bands, opportunities will be chosen to increase positions.

The sawtooth shaped adjustment structure of the daily structure of the New York dollar against the US dollar is relatively clear, and there is currently a possibility of ending the decline in the small cycle structure. Therefore, it is possible to try to place multiple orders in the light position at the current position, with a stop loss exit at a new low, but standing on the upper side5After the daily moving average, there is an option to add positions by machine.

EFS  Analyst: Chen Yunbo