The market sentiment was constructive in Asian and European session whereas in late NY session recent US-China trade war headlines dampen the emotion again. JPY strengthen across the board, and the US Dow Jones futures fell rapidly. The 10-year Treasury yield closed at 2.87 vs. 2.86 Tuesday.
Bloomberg reported, “President Donald Trump is preparing to release a list of an additional $200 billion in Chinese products to be hit with tariffs, according to two people familiar with the matter.” The article also discussed “The list could be released as soon as Tuesday, and likely this week, according to the people, who spoke on condition of anonymity because the matter isn’t public.”
Market reaction: Risk-off mood was elevated across the board. Particularly AUDUSD and AUDJPY down more than 0.5%, Copper down more than 3.0% and USDCNH rose more than 0.70% at one point in an early Asian session.
USDCNH: The cross again fails to breach the July 02 on Wednesday’s Asian session. We believe it may be running into an area of resistance defined the following:
• The 61.8% fib reaction seems to be at 6.7000 (Jan 2017 high-March 2018 low)
• The parallel resistance zone appears between 6.7160-6.7230
• Traced out a double top between 6.6950-6.6862
• The daily studies RSI and the oscillator are remaining bearish
• Overall supply zone spread between 6.7000-6.7230
On a monthly basis, a recovery back above 6.7640 Jan 2016 high seems hard. In this case, this would point a new downward wave towards 6.6130-6.6000.
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