Markets on Wednesday: Trade Wars Still Driving Forex
The trade wars are still making headlines, however, markets aren’t falling off a cliff just yet. There were some flows towards the safe havens, but nothing significant.
The commodity currencies were weak and the JPY and CHF found most of the buying interest, thanks to the continued speculation.
As it stands the US started it all with a $50 billion set of tariffs on China. Which China promptly matched. The US then looked to raise that figure to $200 billion. Which the Chinese can’t in fact match as the US don’t export enough to China. But they can potential try other measures.
Looking ahead it’s another quiet day on the economic data front. With only more housing data to come out of the US. Although we will be hearing from two of the major players in the world of Central Banks. Mario Draghi and Jerome Powell. I don’t expect anything market moving.
USD is at Resistance
The USD began to flirt with the 95.00 level and finished the day virtually bang on. Overall there is strength in the USD and that is despite the headlines that keep on coming.
The dollar strength is giving me reason to think that we can, in fact, move higher still. The next major resistance level will be at 96.20-96.50, so that is very much achievable.
The data is thin this week so we aren’t likely to get any big moves like we did from the US retail sales last week.
To the downside 93.30 remains the major support level to watch out for. But for now, my bias is to the upside.
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