All the focus is down under…again
The big focus in today’s Asian session was recent trade war rhetoric coming from Trump against the EU and Canada.
As a result, risk assets has really taken a beating, to the benefit of the JPY and CHF.
Furthermore, AUD remains on the back foot after yesterday’s data in spite of the great GDP release earlier this week.
As long as the risk tone is negative, risk assets should remain pressured and safe haven flows should continue.
Our pair selection for today:
Given the AUD weakness and CHF strength we have chosen the AUDCHF as one of the pairs we will be watching closely today to look for trading opportunities.
AUDJPY could also be another option, however after the massive move which the AUDJPY has already made during the Asian session we don’t want to jump in if the market should have a larger correction.
AUDCHF – H4
AUDCHF – M30
As stated above, the biggest reason why we would like to pair the AUD versus the CHF is the current risk tone in the market.
We would like to see the pair pullback to the recent (and important) 0.7450 level. This was an important support level for the sellers to take out, so we expect a retest of the level.
Conversely, should anything positive change in the risk tone and the market breaks back above the level be very careful of any shorts on the pair.
The biggest risk to the trade would be further escalation of trade war rhetoric so watch out for those ones in the news.
If you found this helpful do us a big favor and please remember to like and share on Facebook and Twitter.
Risk Disclaimer: Forex Trading carries a high level of risk. It is possible for traders to lose entire trading accounts if they do not know what they are doing. This post is not an enticement, signal or recommendation to buy or sell any financial instruments. All of the information in this post should only be considered as general market commentary and should never be used as trading or financial advice.
Copyright © 2016 by Jaba Investments (Pty) Ltd. All rights reserved