Will the Positive Sentiment Hold in Asia?
Rowan Crosby • 2 min read
It was a weekend of positive developments following the news on Friday that the trade talks between the US and China have progressed well.
However, there seems to be some doubt creeping into the minds of traders early in the Asian session as we get started on the week. There has been some commentary around today suggesting the news of a truce is more symbolic than anything else. So the relief rally we saw on Friday is still under a few clouds.
The Aussie looks like it has run into a wall of sellers at 0.6800 and that is holding strong as resistance.
While the Kiwi has pulled right back to 0.6300. So for all the positive headlines, this looks like we could still fall out the bottom here.
If you recall, these are the exact levels we spoke about last week, prior to the surge on Friday. So in a way, that indicates there is still an underlying amount of weakness in the air.
The plan for me will be to continue to look for short opportunities, beneath key resistance levels.
So the obvious one for me will be a break under 0.6300 in the Kiwi and ideally 0.6285.
While for the Aussie, another pop higher and a lower high under 0.6800, would be a great opportunity I feel.
Either way, the longer-term trend is downbased on fundamentals, so making the most of a pop to short is a solid plan in my eyes.
Looking ahead, there are a few news items this week. The RBA minutes will be important, but the main one this week could be the Aussie jobs report.
The RBA is tied to the jobless rate at the moment, so if that rate can’t fall, there is certainly going to be a case for more selling to come into the Aussie.