Forex news for the Asia-Pacific trading on October 30, 2018

Markets:

  • Gold down -$2.27 or -0.19% at $1227.15
  • Nikkei 225 up 1.35%
  • Shanghai Comp +0.72%
  • S&P 500 futures +14.40 points. Dow futures up 95 points
  • AUD the strongest. The JPY is the weakest.

The Asia-Pacific session got off to a nervous start as US stocks had a volatile day but did recover in the last hour of trading.

Nevertheless, tech stocks got hit hard after there were reports that Trump would put tariffs on the full 500B of China imports if the Xi/Trump meeting did not make progress toward a deal.

The Nikkei opened lower. The South Korean Kospi opened down about -0.5% and the financial regulator chief told staff to prepare steps to stabilize markets.

The PBOC fixed the yuan at the lowest level in 10 years. Was China standing up to the threats from the White House? Would stocks head lower?

Softening some of the fear was talk of a proposed auto tax cut in China to help their slumping auto sector (first downturn in 2 decades).

Then there was a tweet that Pres Trump in an interview with Laura Ingraham from Fox News said he predicted a "great deal" with China on trade. He added that there had to be a great deal because the US has been rebuilding China for years.

Whether it is true or not, or is imminent or still months and months away, does not really matter. The market is oversold. Stocks moved higher.

Also moving higher were risk-on trades.

Looking at a snapshot of the strongest and weakest currencies, the AUD and NZD were the strongest. The JPY and the CHF were the weakest. Classic risk-on flows.

In fact, looking at the ranges and changes for the first 8 hours of the day shows most of the price action was in the USDJPY (up 29 pips and 40 pip range), AUDUSD (up 29 pips and 41 pip range) and NZDUSD (up 22 pips and 28 pip range). Meanwhile, the EURUSD only had a 14 pip range. The GBPUSD only had a 20 pip range and USDCHF barely moved at all (7 pip range).

Technically,

  • The USDJPY moved above a topside trend line on the hourly chart at 112.50 and moved up to test the high from Wednesday at 112.74. A move above will look toward the October high at 112.881. Buyers are in control. Risk is a move back below the 112.50 level
  • The EURUSD - although it barely moved - has the 100 hour MA moving lower and getting close to the price. The current price is 1.13819. The 100 hour MA is at 1.13919. A move above (and closing above) should solicit more corrective buying in the pair (see post here). Failure to get above, keeps the sellers in firm control.
  • For the GBPUSD, like the EURUSD, the price barely moved. However, the price stayed above the 1.27865-98 area (see post here). That area is a barometer for the London/European session. Stay above is more bullish. Move below and there should be more selling
  • The NZDUSD is making a play above its 200 hour MA at 0.6543 now. The high on Monday at 0.6555 is the next target, followed by 0.6566-68 highs from last Tuesday/Wednesday.
  • Like the NZDUSD, the AUDUSD has moved to the 200 hour MA at 0.7088 after breaking earlier above the 100 hour MA at 0.7075 (risk for longs now). On more upside, the 0.7106-08 will be targeted.

Good fortune with your trading.