News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Entry orders are a valuable tool in forex trading. Traders can strategize to come up with a great trading plan, but if they can’t execute that plan effectively, all their hard work might as well be thrown out. Learn how to place entry orders here: https://t.co/1mnOXUuBpt https://t.co/6BhlgjWVYw
  • We are going to start the new trading week with a few critical technical breaks like the $QQQ's (NDX) H&S neckline break on volume and EURUSD's clearance below 1.1950. Are these the makings of trends? My take: https://www.dailyfx.com/forex/video/daily_news_report/2021/03/06/EURUSD-and-Nasdaq-100-to-Start-Week-with-Multi-Month-Breakdown.html https://t.co/iR5w7iDkDU
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here: https://t.co/8A1QhwMVKo https://t.co/OR70NHkgeI
  • What are some factors driving AUD? Get your free forecast for this quarter here:https://t.co/z85CIVYiuK #DailyFXGuides https://t.co/nd93gXDswq
  • The continuity seen across these volatility cycles is a good thing. Historical precedence offer a blueprint for identifying conditions supportive for a vol-event to occur, and how they may unfold. Deepen your knowledge of historical volatility here: https://t.co/vg7w10la3j https://t.co/xeidoj2K9f
  • The non-farm payroll (NFP) figure is a key economic indicator for the United States economy. It is also referred to as the monthly market mover. Find out why it has been given this nickname here: https://t.co/yOUVEEqhc5 https://t.co/1rhLp4LnfN
  • Knowing how to accurately value a stock enables traders to identify and take advantage of opportunities in the stock market. Find out the difference between a stock's market and intrinsic value, and the importance of the two here: https://t.co/QszmdZFxlk https://t.co/RKYGzRStvL
  • The US Dollar is moving higher after a blowout NFP report bolstered confidence in the US economic recovery. Markets will now turn attention to next week’s US inflation data which could boost the Greenback. Get your market alert from @FxWestwater here: https://t.co/Ud62r3hKRF https://t.co/dvvDCJvlbP
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM7kO6a https://t.co/7g9pB8D9xK
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sIHrP https://t.co/OCLzmXaDCu
USD, JPY May Rise as US-China Tension Over Hong Kong Escalates

USD, JPY May Rise as US-China Tension Over Hong Kong Escalates

Dimitri Zabelin, Analyst

US Dollar, Hong Kong, US-China Relations, Coronavirus – TALKING POINTS

  • US Dollar and Japanese Yen may rise as US and China lock horns over Hong Kong
  • Beijing, Washington risk slipping into another tit-for-tat relationship amid pandemic
  • EUR/USD has broken above a key inflection range with follow-through: what next?

Asia-Pacific Recap

Asia-Pacific markets appeared to have a risk-off tilt in market mood early into Friday’s session as the anti-risk Japanese Yen and Swiss Franc edged higher at the expense of US equity futures. APAC stocks were also trading in red as investors grew more anxious about the widening rift between the US and China. The political catalyst appears to be concern about Hong Kong and its autonomous status.

US Dollar, Japanese Yen Brace for Escalating US-China Relations

Growing hostility between the US and China over Hong Kong may sour market mood and put a premium on anti-risk assets like the US Dollar and Japanese Yen and a discount on their growth-oriented counterparts. The cycle-sensitive Australian and New Zealand Dollars in particular are at risk given their home countries are strongly reliant on Chinese demand.

Secretary of State Mike Pompeo said Hong Kong was no longer autonomous from China in light of Beijing’s intent to insert new legal provisions into the region’s constitution. This has been met with pushback from numerous US officials including President Donald Trump. On Thursday, he announced a press conference that will take place later today about China and its recent actions.

Relations between the two were already strained amid the coronavirus pandemic and before then were at best cautiously neutral following the passage of “Phase 1” of the US-China trade deal. Now, those tensions are escalating over Hong Kong and will likely be exacerbated following a controversial bill signed by the House of Representatives.

The piece of legislation authorizes sanctions against Chinese officials involved in the abuse of Muslim minorities known as Uighurs. There are also other bills that involve targeting China-based technology companies like Huawei, who’s CFO Meng Wenzhou just recently suffered a blow from Canada’s court system that ruled that the case for extradition to the United States can go forward.

China is also experiencing a breakdown in diplomatic relations with its Australian neighbor that has called for an international investigation into how the Asian giant handled the coronavirus pandemic. Fighting on almost all fronts, Beijing will likely now have to put on a show of strength which will likely lead to more geopolitical friction that investors will scramble to price in. Learn how to trade the impact of politics on markets here.

Going back to Hong Kong, there is concern that the autonomous region may become a geopolitical bottleneck that could hinder cross-continental capital flows and expansion into the Chinese market. Investors also have to face the prospect that escalated tensions may cause the détente to deteriorate into direct, targeted economic measures. It is not unreasonable to think that the trade war may be resurrected and haunt markets again.

EUR/USD Analysis

EUR/USD has broken above a key inflection range between 1.0981 and 1.0989 with follow-through after bumping against it and support at 1.0783. The pair will now have to surmount resistance at 1.1147 (purple-dotted line) which could then open the door to retest a key ceiling at 1.1287. If barrier is also cleared, the next peak to scale may be the one-year swing-high at 1.1447.

EUR/USD – Daily Chart

Chart showing EUR/USD

EUR/USD chart created using TradingView

--- Written by Dimitri Zabelin, Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitriTwitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES