Tit-for-tat trade spats starting to take its toll…
The big focus in today’s Asian session was recent trade war rhetoric coming from Trump and China.
The Trump administration issued tariffs against China to the value of $50b, and China replied in kind by announcing they would retaliate with their own tariffs.
The school ground quarrel between the two biggest economies in the world has made markets very nervous.
As a result, risk assets has really taken a beating, to the benefit of the JPY and CHF.
Furthermore, NZD remains on the back foot after a recent NZIER consensus report which stated that growth is likely to come in softer for NZ than previously expected.
Our pair selection for today:
Given the NZD weakness and JPY strength, we have chosen the NZDJPY as one of the pairs we will be watching closely today to look for trading opportunities.
NZDJPY – H4
NZDJPY – M30
As stated above, the biggest reason why we would like to pair the NZD versus the JPY is the current risk tone in the market and the NZIER report.
At the moment, we have selected two resistance areas where we would consider short positions on the pair.
The NZD will also have release of its GDP numbers on Thursday which is expecting to be softer than prior. We would expect this to place some pressure on the NZD as well.
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