Trade tariff delay helps to ease financial market sentiment
Financial markets received an unexpected boost this week as US President Donald Trump decided to delay the latest round of trade tariffs on selected Chinese goods coming into America. President Trump shocked traders and investors as he delayed imposing some new trade tariffs until December this year, in a move which he hoped would help the average US consumer. Financial markets had been in bearish risk-off mode prior to the decision, due to geopolitical tensions and fears about the slowing global economy. Equity markets and US dollar benefitted the most the decision, although equity markets struggle to in general this week.
- The USDJPY pair is bearish while trading below the 107.00 level, key support is found at the 105.40 and 105.00 levels.
- If the USDJPY pair trades above the 107.00 level, buyers may test towards the 107.30 and 107.50 resistance levels.
The euro currency came back under pressure this week, following weaker than expected GDP data from the powerhouse German economy. The German economy posted negative GDP numbers for the second fiscal quarter of 2019, raising fears that a technical recession may soon be upon Europe’s largest economy. The global slowdown and a rapid decline in Chinese economic activity continued to fuel fears that the entire eurozone economy may also be heading into trouble. The euro currency surrendered recent gains against the greenback and slipped from a multi-year high against the British pound.
- The EURUSD pair is bearish while trading below the 1.1160 level, key support is found at the 1.1100 and 1.1050 levels.
- If the EURUSD pair trades above the 1.1160 level, buyers may test towards the 1.1200 and 1.1250 resistance levels.
Bitcoin came under major bearish pressure this week, as the number one cryptocurrency failed to hold onto its recent gains about the $11,000 level. Bitcoin fell towards the $9,400 level as bearish fundamental news caused a sentiment shift towards cryptocurrencies. Bitcoin’s safe-haven status also came into question, as traders decided to sell the BTCUSD pair and move into bonds and gold. Ethereum and Litecoin continued to decline, as the second and fifth-largest digital currencies failed to attract buyers from already depressed technical levels.
- The BTCUSD pair is only bullish while trading above the $11,100 level, key resistance is found at the $11,500 and $12,300 levels.
- The BTCUSD pair is bearish while trading below the $11,100 level, key support is located at the $10,000 and $9,080 levels.
The price of gold continued to rise this week as fears over the growing political risks coming from Hong Kong and the India-Pakistan situation in Kashmir. Overall safe-haven demand sent the yellow-metal towards the $1,525 level for the first time in over five years. Gold now appears to be investors official safety play, as global macroeconomic indicators continues to turn lower. Selected US, UK, German and Japanese bond market yields dipped into negative territory this week, which also helped gold and other precious metals such as silver receive a strong bid tone.
- XAUUSD is only bullish while trading above the $1,480 level, key resistance is found at the $1,550 and $1,600 levels.
- If XAUSUD trades below the $1,480 level, key support is located at the $1,440 and $1,420 levels.