The hope of a US-Sino trade deal lifted sentiment on stock markets and saw Chinese indices rallying more than 5% in tandem with US futures and EU Stock futures as risk appetite strengthens.
President Trump has spearheaded a broader risk-on play in the markets after he said the US would delay an increase in tariffs on $200 bln of Chinese imports beyond the March-1 deadline, citing “productive” trade talks.
The China-proxy Australian and New Zealand currencies rallied and posted gains of nearly 0.5% against the US Dollar. NZDUSD, AUDUSD and AUDJPY printed 2-day highs at 0.6882, 0.7161 and 79.37 respectively.
Both antipodean major currencies (NZDUSD and AUDUSD) have crossed into the upper Bollinger bands area and they are currently trading above 20- and 50-day SMA. Their technical picture is very similar, with the 4-hour momentum indicators configured positively. RSI is looking ready to cross above 60, while MACD lines have turned to the positive area as signal line remains above it. The latter suggests the elimination of bearish bias in the near future.
So far today, Kiwi holds Support at 0.6850, while it faces an obstacle at the confluence of 61.8 Fibonacci extension and R1 from PP analysis, at 0.6877. If the pair overcomes this barrier the next levels to be watched northwards are: 0.6900, 0.6915 and 0.6938.
Aussie on the other hand, broke earlier the initial Resistance of the day at the confluence of 200-period SMA and R1, at 0.7154. Therefore the next Resistance levels for Friday’s rebound are set at Tuesday’s peak, at 0.7173, and at 0.7185 (R2. FE 161.8 and upper BB line in the 4-hour timeframe). Support holds at 0.7135 (50-day SMA)
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Andria Pichidi
Market Analyst
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