I talked about my outlook for Gold, Silver, and the EURUSD in the first part of this three-part series. Feel free to get my price targets at “2020 Predictions Part One”. Commodities enjoyed a stellar start to the year after US President Trump ordered an airstrike to kill Iranian General Qasem Soleimani on Iraqi soil. The increase in tension pushed traders into safe-haven assets like Gold and its smaller sibling Silver. We have seen a pullback from the highs, but I think there is plenty of upside left. Now let’s take a look at three more predictions for 2020.
Polish Economy to Power Ahead
Poland’s economy continues to make economists look clueless. It powers ahead despite problems around its borders. It prompted the IMF to upgrade 2019 GDP forecasts to 4.0% annualized, up 0.2% from the previous estimate of 3.8%. Third-quarter GDP clocked in at 3.9% annualized with a 1.3% quarterly growth rate. Needless to say, the EU’s top performer and well ahead of the EU’s anemic 0.3% average growth rate. Maybe the EU is holding back Poland as it is shackled to its biggest trading partner, Germany.
With a slowing US economy, the USDPLN is perfectly positioned to add to its recent rally. It is currently in the process to complete a breakdown below its primary ascending support level, from where more downside is expected. Poland’s labor market remains tight, representing a minor headache for companies. In 2019, the country issued a record 235,000 temporary worker permits for foreigners in the first six months alone. This exceeds the number issued by both Germany and the US. The Polish bank left interest rates unchanged at a record low of 1.50% since March 2015, and no change is expected in 2020.
Hungary Cuts Taxes and Boosts Wages
The Hungarian economy is outperforming the continent together with Poland. Robust economic growth numbers allowed for further tax cuts. The government noted high employment and wage growth are adding to a strong budget, allowing taxes to be reduced. This, in turn, fuels more economic activity, and the cycle expands. The Hungarian Forint should capitalize on this front, and the EURHUF set for strong gains in 2020. Forex traders should account for a volatile trading environment, but a measured bearish move is likely to establish itself during the first quarter.
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JPMorgan to Lead Banks Down South
Now let’s take a look at equities. A growing number of analysts believe that banking stocks are in for a great decade, but this may have to wait as a rough start in 2020 is shaping up. The US Federal Reserve has paused its interest rate cuts, but it could find itself in a position to resume if the economy continues to show extended signs of weakness. Low-interest rates make it harder for banks to earn money.
JPMorgan, one of the largest banks active in the global financial system, could suffer more than its peers due to its exposure. The same bad lending habits that lead to the 2008 financial crisis have returned. JPM is not at risk of default, and its balance sheet appears sound on the surface, but the run-up in its share price to above $140 appears to discount all the negative factors. Traders are overly optimistic about the global economic prospects and will be forced to price them into their models eventually.
Finding talent is becoming harder, and JPM may have to fill open positions with less-qualified individuals, decreasing the overall quality. This leads to a low-simmering pot of long-term problems. Technical indicators are breaking down, and the stock may have a troubled 2020 to maneuver through. A fresh round of quantitative easing by the US Fed has been touted as an option, which would provide a bearish driver for the banking sector in general. Even without such an event, banks will be faced with a challenging year.
3 High-Profit Trades for Your PaxForex Trading Account
The USDPLN is sandwiched between its primary descending resistance level and its primary ascending support level, below its horizontal resistance level. Bearish pressures are on the rise, and a breakdown is expected to take this currency pair into its horizontal support area. With Poland home to one of Europe’s best-performing economies, and the US expected to underperform in 2020, selling the rallies is recommended. The CCI moved into extreme oversold territory, and crossover above -100 represents a selling opportunity. Open your PaxForex Trading Account today, and join one of the fastest-growing communities in the forex market!
The primary ascending support level and the primary descending resistance level have crossed, after the EURHUF completed a breakdown below its horizontal resistance area. Hungary’s tax cuts and wage increases are favored to boost economic output in 2020, surpassing that of the Eurozone and the EU. Price action is expected to accelerate to the downside, through its horizontal support level, and into its horizontal support area. The CCI dropped below the 0 mark for a bearish momentum crossover. Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Forex Profit Set-Up #3; Sell JPM - W1 Time-Frame
Banking stocks in the US may have a rough 2020, which is not reflected in share prices. JPM surged into its horizontal resistance area, but the loss in bullish momentum makes a breakdown more likely. A move below its primary ascending support level and its horizontal support level is expected to take this stock back into its horizontal support area. The CCI pushed out of extreme overbought conditions, and more downside is likely. Follow the PaxForex Daily Forex Technical Analysis and grow your balance trade-by-trade!
