President Donald Trump spoke on Tuesday at The Economic Club of New York. Markets’ expectations were high, investors hoped to get some new information and clarity on the progress of the Phase One deal as a part of a trade agreement between the two largest economies in the world. President Trump reiterated his success since he came to office and warned Wall Street, that if he is not re-elected in 2020, market gains will be lost. He also talked down the Federal Reserve, as usual, for not cutting interest rates more vigorously and told the audience that he is running against ‘crazy’ opponents for the 2020 election. He mentioned that China is dying to make a deal, but he won’t sign it unless it’s good for the US and its workers. Overall, he did not shine any new light as to what exactly is happening with the trade deal. He did mention thaе ‘we’re close -- a significant phase one deal could happen, could happen soon’ with no further details.
In President Donald Trump’s opening remarks, he also mentions ‘If we don’t make a deal, we’re going to substantially raise those tariffs,’ ‘They’re going to be raised very substantially. And that’s going to be true for other countries that mistreat us too.’
This statement comes at a time when the White House has to make a decision about increased tariffs on European and Asian auto imports. As a result, Asian and European auto shares, like BMW, took a dip after the speech.
EUR/USD on a Daily TF has reached the first target down at 1.10000. We now have a doji candle around 1.10094. The MACD bearish histogram has grown. The RSI is within the range at 40.67. 9EMA is pointing down.
Resistance: R1 38.2% Fibo 1.10647, R2 23.6% Fibo 1.11086, R3 1.11795.
Support: S1 61.8% Fibo 1.09939, S2 1.09733.
USD/JPY on a Daily TF continues to trade in a bearish flat, with slight rejection of higher prices, and is currently trading around 108.849 As a reminder, the Ichimoku is showing us a strong bullish bias. The price is above 200EMA. The Parabolic SAR is pointing up.
Resistance: R1 61.8% Fibo 109.362, R2 109.620, R3 110.095.
Support: S1 108.600 (trend line), S2 50% Fibo 108.423, S3 108.00.
The Reserve Bank of New Zealand is good at surprising the market. It cut the interest rate by an unexpected 50 basis points in August. This morning, when it decided to leave the interest rate unchanged at 1.0%. Markets were pricing in a rate cut of 25 basis points at around 60%. RBNZ is comfortable with the current low interest rate and expects a pick-up in growth in 2020, while further easing remains on the table, if necessary.
As a result, on a Daily TF for NZD/USD, the Kiwi rallied by 1.35%, reaching a high of 0.64160. The price is currently at the first level of resistance around 0.63853.
Resistance: R1 38.2% Fibo 0.64279, R3 50% Fibo 0.64972
Support: S1 0.63008, S2 0.62690, S3 0.62416
Later today, US Federal Reserve Chairman Powell will speak at the semi-annual testimony to Congress at 16:00 GMT.