U.S. President Donald Trump said in a tweet on Sunday that the US would negotiate the trade barriers between them and China and that the two countries would come to terms on intellectual property. Trump also specified that “China will take down its trade barriers because it is the right thing to do and that there is a Great future for both countries. No explanation was given as to the sudden change of mind towards Chinese imports or the optimism backing the statement. From the European side, European officials have also stated that they are facing difficulties following the actions that U.S. President Donald Trump has taken on implying tariffs and that it could damage global trade. This indicates that the US president may have to revise the trade tariffs he implied as the impact from China’s retaliation tariffs may have come as surprise to the US. Should there be further positive headlines about the issue we could see the USD strengthening.
USD/JPY moved lower on Friday mostly due to the Non-Farm payrolls release. During today’s Asian morning the pair continues to trade in a sideways manner between the 107.50 (R1) Resistance level and the 106.95 (S1) Support level. We see the case for the pair to trade in a bullish mood should there be further headlines about a possible resolving of the tariffs issue. Should the bulls take the upper hand we could see the pair breaking the 107.50 (R1) resistance line and aim for the 108.30 (R2) resistance hurdle. Should the bears take the reins we could see the pair trading south towards the 106.95 (S1) support line and even breaching it aiming for the 105.55 (S2) Support hurdle.
- Support: 106.95 (S1), 105.55 (S2), 104.66 (S3)
- Resistance: 107.50 (R1), 108.30 (R2), 109.20 (R3)
Trump outbursts on Syria attack
U.S. President Donald Trump threatens to retaliate on Syria for the use of chemical weapons among civilians in the latest attack. Trump blamed Syrian President Bashar al-Assad and named him an animal. Also directed threats and blame towards Iran and Russian President Putin adding they will have a big price to pay. It must be noted that relationships between US and Russia, in particular, are seen to deteriorate even more since not very long time ago the US reportedly kicked out from its country 60 Russian diplomats. This could add even more to the uncertainty in the area as the Syrian problem does not seem to be ending any time soon.
EUR/USD moved higher on Friday after the Non-Farm Payrolls released a reduced figure than initially forecasted which weekend the US dollar and worked in favor of the EUR. The pair tested the 1.2230 (S1) support line in the European opening and advanced to 1.2280 after the US news was released. We see the case for the pair to continue to trade in that manner as the financial data to be released today could help strengthen the EUR. Should the pair come under selling interest we could see it breaking the 1.2230 (S1) support line and aim for the 1.2100 (S2) support level. Should it come under buying interest we could see it aiming for the 1.2355 (R1) resistance line and even breaching it.
- Support: 1.2230 (S1), 1.2100 (S2), 1.1920 (S3)
- Resistance: 1.2355 (R1), 1.2455 (R2), 1.2680 (R3)
In today’s other economic highlights:
During today’s European morning we get Germany’s Trade Balance for February and the UK’s Halifax House Price Index for March. In the North-American session, we get Canada’s Housing Starts for March.
As for the rest of the week
On Tuesday we get the US PPI rate for March.
On Wednesday we get China’s and US Inflation rates for March.
On Thursday we get France’s final CPI (EU Norm.) for March and Sweden’s CPI for March.
And on Friday we get Germany’s final HICP for March and China’s Trade Balance for March.
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