Donald Trump’s tweet ignites the markets again. This time, optimism about the future deal with China caused and euphoric buying frenzy in some markets. There is an instrument, which is strongly supported by the positive comments about Trade Wars: AUD/USD.
First, AUD is affected by the condition in the Chinese Economy.
When the Big Dragon is doing well, it is supporting the Aussie. Second, we just got a rate decision and statement from the RBA. Although comments were not so hawkish, traders decided to eventually buy the AUD. That leads us to the technical situation, where we have a beautiful inverse head and shoulders pattern, which I mentioned in one of our previous videos. The price broke the neckline and then defended that as a support, which is giving us a green light to go long. We are currently breaking the major down trendline and price closing a day above the red line, should be a bullish game changer.
A similar setup can be found on the USD/JPY. Yen is weakening across the globe. Here, the price also defended the neckline and went higher. For the legitimate buy signal, we need to break the resistance on the 109.
The last one is the USD/MXN, dollar to peso, where I showed you the symmetric triangle pattern. We are still inside but the buyers are not using the lower line of this formation as a trigger to go higher. This may indicate the willingness to break this support, which should bring us a sell signal. As for now, we wait but once the price will close below the green line, technical analysis will ring the bell to go short.