US Secretary of the Treasury Steven Mnuchin said the US trade war with China is “on hold”. Investors now hope that this particular pause will be more remarkable than previous attempts to rebalance trade tensions.
The statement also said “consensus on taking effective measures to substantially reduce” US trade deficit in goods with China. And, China agreed to “significantly increase purchase” of US goods and services.
That automatically affected the Yen as risk appetite has returned, which made the Japanese currency lose its bright future as a safe haven.
On the other side, the Australian & New Zealand Dollars found their momentum as traders return to desire more risks.
The National Australia Bank pushed back their forecast of an RBA rate increase within 2018. Their next move’s expectation is now relocated from November to May 2019. That change put them back in line with market pricing.
RBA chief economist Alan Oster announced that the “change reflects the fact there is no sign yet of stronger wages growth, and unemployment has been stuck around 5.5% for the best part of a year.” Also, he explained that once the tightening cycle begins “further rate increases will be very gradual”. And after the first May 2019 increase, the next one will be “not until November 2019”.
On the daily chart, the price has bounced from the resistance of 93.6 with a pin bar.
A BAT harmonic pattern boosts the continuation of the bearish momentum. Divergence on RSI assured this possible downfall.
The price is expected to fall as a retracement to the support 92.6.
On the daily chart, as we expected, the price reached the resistance zone at 84-84.35 and continued by shaping a head & shoulders reversal pattern.
If the price could break this zone to activate the pattern, it may reach the second area at 85.45-85.95