Asian Technicals Look Bearish
It's a slow start today in Asian trade as we might expect with today's main event still another 12 hours away.
It’s a slow start today in Asian trade as we might expect with today’s main event still another 12 hours away.
Of course, all the focus will be on the US-China phase one deal that is due to be signed at 11:30am US time.
So for the time being, the risk assets in Asia are biding their time and hovering around the key technical levels.
For the AUD/USD that is the 0.6900 mark and the NZD/USD is still sitting on 0.6600.
Both are in my view, looking rather bearish. The Kiwi, in particular, feels like it really wants to break down and fall away from this key support level.
While the Aussie has made a bearish head and shoulders pattern and can’t really sustain any buying at higher prices.
So what might be a bearish trigger today?
Well the talk coming out at the moment, is that while the phase one deal will be signed, there might not be any additional tariff cuts. The next round of cuts might only come after the November Presidential election so this could be all she wrote for 2020.
And with that in mind, this could be seen as a bit of a negative for risk assets and that could lead these already weak pairs to give way.
So that is my thesis for today, but it is only that – a thesis.
We need to stand ready to act on whatever the price action is telling us. The market is equally able to surprise us to the upside.
So with that in mind, I would also be looking at long positions on a break of the most recent swing high. That gives us the opportunity to trade in both directions.
It shuold be a big day ahead so preparation is key.
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