News & Analysis
Stocks and risk currencies continue recovery as China and U.S head back to trade talks; Bitcoin holds from 6165
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U.S. stocks ended the week on a high, a report said President Donald Trump and Chinese leader Xi Jinping hope to discuss U.S.-China trade in November. This had a settling effect on traders looking to get back into risk.
From Thursday we saw gains in stocks and risk currencies. The Dow Jones added 110.59 setting a two-day winning streak after the Wall Street Journal said U.S. and Chinese officials are working on a roadmap for the meeting to take place. “If you take the possibility of a trade war with China off the table for a few months that allows the market to work its way higher,” said Ed Keon, chief investment strategist at QMA. “This has been one of the market’s biggest worries. If you put it on the back burner, it’s a good thing.”
European stocks continued to trade wary due to the situation in Turkey, the Lirea which has bounced back from its lows earlier in the week still remains unstable in traders eyes and markets continue to worry about contagion fears in emerging markets. The DAX lost 26.62 while the FTSE edged higher adding 2.21 points.
With stronger leads and more stable geopolitical leads, the ASX200 hasn’t jumped out of the blocks but is trading slightly higher +5.00 points after Friday’s strong rally into new records. Asian stocks are mainly lower, Nikkei -80, Shanghai Composite -0.14 but the Hang Seng is 113 points higher.
Gold bounced back on Friday, Chinese U.S trade talks lifting risk’s demand. Price added 11.90 hitting 1184.80. Price flat this morning traders take it slow as the start of the week.
Risk currencies continued to trade higher to the USD and JPY as trade fears abated on the news of China going back to the table with the U.S. The Lirea holding off earlier lows also gave traders further confidence. The AUDUSD added 57 pips jumping back above .73. The GBP and EU also ended the week stronger to the USD and Japanese Yen. The USDJPY lost ground on Friday closing 38 pips lower. Price sitting just above 110.40 support. Sellers active this morning but we will need to see a break of that level to show they’re in control. The EURGBP added 30 pips to end the week despite a higher GBP, buyers have reclaimed .8970 this morning.
Bitcoin had a solid Friday adding 293 USD forming a new higher low. Good signs from buyers for now. Price has tested 6540 resistance this morning. A short-term move lower wouldn’t be a big shock but we would like to see a break above this high to show buyers are trying to form a new uptrend.
Good Trading from Eightcap
Sources; CNBC – All times are AEST
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