Sea of red as deadlock between US-China trade talks emerge
It was a sea of red in the world’s financial market as investors continued to worry about the progress of US-China trade talks. A report by the Wall Street Journal said that talks had hit an impasse, six weeks after the two countries announced a limited phase one of the deal. The US has insisted that China needs to commit to large farm product acquisition while China has insisted that the US must remove tariffs. In a statement yesterday, Donald Trump said that the US would be forced to increase tariffs substantially. This would have negative implications on the corporate scene at a time when stocks are trading at an all-time high. US futures pointed to a lower open, with the Dow set to lose 100 points.
The price of crude oil rose slightly, a day after it suffered the sharpest intraday decline since September this year. The price of crude oil has been struggling since last week when the International Energy Agency warned OPEC of increased production from OPEC members. It also warned that demand will decline substantially. The US is expected to increase the amount of crude oil it produces. IEA expects it to increase its output by more than a million barrels every day as new pipelines come online. The market will receive crude oil inventories data for the past week. Estimates point to inventories rising by 1.53 million barrels.
The Australian dollar wobbled against the USD as the market reacted to the ongoing tensions on trade. The market also reacted to the ongoing challenging situation in the country’s banking sector. The biggest banks in the country reported weak earnings in the third quarter. Meanwhile, Westpac, which recently announced plans to raise new money, received a major blow as the government accused them of breaching money laundering laws. The bank failed to report more than 19 million international transactions worth more than $11 billion over 5 years. The bank also failed to do due diligence on transactions to risky countries. This means that the bank could receive fines worth millions of dollars. Also, the market reacted to the decision by PBOC to slash interest rates again.
The EUR/USD pair dropped slightly today as the market remained patient on the ongoing trade skirmish. The pair is trading at 1.1057, which is lower than the weekly high of 1.1090. The price is slightly below the 38.2% Fibonacci Retracement level. The 14-day and 28-day exponential moving averages have also made a bearish crossover and the RSI has been on a strong downward trend. The pair may continue moving lower as a new inverted cup pattern appears to be forming.
The XBR/USD pair rose today after a sharp decline yesterday. The pair reached a high of 60.60, which was below today’s low of 59.55. On the hourly chart, the short and longer-term moving average appears to be creating a bullish crossover. The RSI has moved from a low of 18 to above 50. The signal and main line of the MACD indicator have started moving up. The pair may see some volatility after the US releases its inventories data.
The AUD/USD pair declined today as the Australian economy continued to struggle. The pair declined to a low of 0.6800, which is below yesterday’s high of 0.6833. On the hourly chart, the price is below the 14-day and 28-day moving averages. The RSI has moved from a high of 70 to the current 42. The pair may continue to remain along the current levels or decline to retest the important lows of 0.6800.