US threatens with $100B more in tariffs on Chinese products

Media reports stated yesterday that president Trump instructed US trade officials for tariffs on additional $100 Billion Chinese imports. The additional tariffs were considered “in light of China’s unfair retaliation” and cited as reasons that China has “repeatedly engaged in practices to unfairly obtain America’s intellectual property”. Chinese media rejected the threat as a ridiculous attempt of intimidation. Should there be further negative headlines about the issue we could see the USD weakening.

EUR/USD traded in a sideways manner with some bearish tones yesterday, testing the 1.2230 support line. We see the case for the pair to continue to trade in that manner however please be advised that the pair may be very sensitive to the US Employment Report data due out today. On the technical side, the pair continues to trade in a sideways motion, within the boundaries set on the 19th of January and is testing the upward trend-line intercepted since 10th of April last year. Should the pair come under selling interest we could see it breaking the 1.2230 support line as well as the aforementioned upward trend-line and aim if not breaching the 1.2100 support level. Should it come under buying interest we could see it aiming for the 1.2355 resistance line and even breaching it.

Kim Jong Un visited China

Media reported yesterday that the North Korean leader visited Beijing in an unannounced visit. Political analysts mentioned that the visit could be part of the preparations for future negotiations with the US and a possible Trump-Kim meeting. South Korean officials, stated that events are unfolding quickly in the Korean peninsula and that they will keep a close eye on Beijing. Any further headlines about a possible improvement in the inter-Korean relationships could support the markets.

USD/JPY also traded in a bullish mood yesterday breaking the 105.55 resistance line during today’s Asian morning. We see the case for the pair to continue to trade in that manner today as trade war fears seem to slowly fade away, however at a slower pace and the pair should stabilize somewhat during the day. Should the pair find fresh buying orders it could aim for the 106.95 resistance line. Should it come under selling interest it could break the 105.55 support line and aim for the 104.66 support barrier. Please be advised that the pair has been trading under a downward trend line incepted on the 8th of January and should there be a strong bullish sentiment, the above mentioned trend-line could be broken.