Forex Signals Brief for Jan 21: Are the Trade Wars Weighing on China?
Markets might well be off to a slower start this week, thanks to the long weekend in the US. However, Chinese data released today will likely keep traders on their toes.
While GDP came in as expected at 6.4%, there are mounting concerns that the state of the Chinese economy isn’t as healthy as it has previously been.
In fact, today’s GDP print was at the same sort of levels that we last saw during the GFC in 2009.
Clearly, the US-Chinese trade wars are having an impact, despite the positive rhetoric that has been coming out of the US over the weekend.
This week, we have the ECB and BOJ which will grab most of the headlines, while we are in the midst of earnings season in the US when our friends from the States get back to their desks.
Forex Signal Update
The FX Leaders Team finished 13 and 8 in what was an excellent week for the boys.
Oil – Pending Signal
Oil looks like it is slowly but surely recovering and we have now broken out of that mini-resistance level around $62. It also looks like we have an inverse head and shoulders formed on the longer-term timeframe.
EUR/CHF – Pending Signal
The EUR/CHF has been pushing higher, despite some EUR weakness. There will be a fair bit of focus on this pair this week as we, of course, have the ECB. 1.1200 support has been strong and there is also the potential for a momentum play on the break of 1.1350.
Cryptocurrency Update
Bitcoin is still testing $3,600 and it appears the weekend spike up to $3,700 has failed. We are now back below the bottom of this range and really giving this a good test.
I still feel the momentum is clearly to the downside. A failed spike is another indicator to add to the pile along with the longer-term trend. Given the volatility contraction that we’ve seen recently, I do feel we are looking at a move one way or another very soon.
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