Tools for TradersTop Movers | Heat Map | Pivot Point | Pivot Meters | Action Bias | Volatility Charts Action InsightDollar Mixed as Markets Pared Back Expectations of Fed Hikes Slightly, after NFP and on Trade War US-China trade war was the dominant theme in the financial markets last week. US started by announcing the list of 1300 product lines to be tariffed under Section 301 actions. China quickly responded by announcing 25% retaliation tariffs to US imports, matching the size of USD 50b product values. US President Donald Trump then escalated the tension by ordering the Trade Representative to come up with an additional list of USD 100b in products for tariff imposition. Then China came back with verbal response, since the new list is not published yet. DOW had a roller-coaster ride last week with 1278 pts swing before closing at 23932.76, down 170 pts from the prior week. Technical OutlookGBP/USD Weekly Outlook Despite dipping to 1.3964 initially last week, GBP/USD drew solid support from 1.3982 and rebounded. The break of 1.4096 minor resistance suggest that pull back from 1.4243 has completed already. Initial bias is turned back to the upside for 1.4243 first. Break will target a test on 1.4345 high next. On the downside, however, sustained break of 1.3964/82 will indicate completion of the rise from 1.3711. In that case, deeper decline should be seen back to retest 1.3711. USD/CAD Weekly Outlook USD/CAD dropped to 1.2732 last week but formed a temporary low there and recovered. Initial bias is neutral this week. Overall development suggests near term reversal, with head and shoulder top pattern (ls: 1.3000; h: 1.3124; rs: 1.2942). Hence, deeper decline is expected as long as 1.2942 resistance holds. Below 1.2732 will target 61.8% retracement of 1.2246 to 1.3124 at 1.2581 next. However, break of 1.2942 will invalidate this bearish view and turn bias back to the upside for 1.3214 high. Suggested ReadingsWeekly Economic and Financial Commentary: Solid Momentum Beneath the Headlines The Weekly Bottom Line: Retaliating on Retaliation, Trade War Drums Beating Trade War Anxiety and NFP Miss Sink US dollar Soft NFP and Trade Tensions Underpin Gold ahead of CPI Next Week Australia & New Zealand Weekly: Gradual Decline in the AUD Expected to Continue through 2018 Week Ahead – Trade Data in Focus Amid Rising American Protectionism; US Inflation also Eyed |
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