Equities Recover, Safe Havens Slide on Softer US-China Remarks

Risk Appetite Rebounds as Trump says China Wants a Deal

The dollar traded higher against most of the other G10 currencies on Monday and during the Asian morning Tuesday. It gained versus SEK, GBP, EUR, JPY, NOK and CHF in that order, while it underperformed only against AUD and CAD. The greenback traded virtually unchanged against NZD.

USD/JPY — Technical Outlook

USD/JPY rallied yesterday, after it hit support slightly below the 104.60 zone, which also provided support on March 23 rdand 25 th, 2018. The rate returned back within the range that has been containing most of the price action since August 2 nd, and thus, we will adopt a neutral stance for now, even though the prevailing longer-term trend remains negative. Then the rate hit resistance slightly above 106.25, and during the Asian morning today, it slid again.

Nikkei 225 — Technical Outlook

The Nikkei 225 cash index moved in a similar fashion with USD/JPY. It opened the week with a negative gap, below the lower end of the range that has been containing most of the price action since August 5 th, but hit support at 19860, and then, it rebounded strongly back within the range. That said, the recovery was stopped near the 20615 hurdle, from where the index retreated somewhat.

As for Today’s Events

The agenda appears to relatively light today as well. During the European morning, we already got Germany’s final GDP for Q2, which confirmed that that Eurozone’s economic powerhouse contracted 0.1% qoq.

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