Global Capital Markets were unsettled during the early part of the trading session and ahead of the US Opening Bell, as investors remained reluctant to place any aggressive bets on risk assets, while ongoing concerns over Brexit and the US-China Trade War remain front & center for this week of trading.
Many analysts are quite skeptical about any positive outcome from the US-China trade discussions. Prior to the start of today’s webinar, there were narrow expectations of a temporary (restricted) trade deal between the two sovereigns that will be sufficient to delay the next round of tariff increases that are set to be imposed on China by next week. This speculation resulted in safe haven currencies, like the Yen (JPY), leading the way through the Asian Trading session and prior to today’s Wall Street Open.
However, market sentiment can change within a matter of minutes. Encouraging headlines renewed the market’s optimism over a US-China Trade agreement. At the start of today’s trading webinar, we began to notice technical signs within the charts that alluded to a shift towards mild risk appetite. Our analysis of USD/JPY, along with the US 10-year treasury yield, suggested that traders should anticipate more upside in the pair that would indicate a demand for yield, which was contrary to the prevailing risk sentiment at that time. We later discovered that positive statements from White House Economic Advisor, Larry Kudlow, spawned the “about-face” activity among intra-day traders. But, assets are now trading in neutral territory as we draw near to the session’s close and wait for further announcements in economic and Geo-political developments across the financial world.
For most of the webinar, we reviewed price action in DXY (US Dollar index), EUR/USD, NZD/USD , USD/JPY, AUD/CAD, and NZD/CAD to identify technical setups that were forming in the market for trade entry.
Marvin Perry has been an active trader within the Forex market since 2010. He attended the University of Illinois in Urbana/Champaign, and graduated in 2002 with a double major in Cell and Structural Biology and Chemistry. He currently serves as an FX instructor & Quantitative Analyst for the Forex Anatomy Private Trading Community called "The Lab", where he conducts live weekly trading webinars & instruction on Fundamental Analysis & Inter-Market Interpretations of dynamic asset classes and their influence on currencies.