Market sentiments are given a solid lift in Asia, after the Trump-Xi meeting in Japan ended up with agreement on no further escalations in tariffs for the time being. Trump agreed to loosen up the ban on Chinese tech giant Huawei while China agreed to buy large amount of American farm products. Additionally, Trump surprised the world by being the first sitting US president to visit the Demilitarized Zone between the two Koreas and met North Korean leader Kim Jong-un, for restarting nuclear talks.
At the time of writing, Nikkei is up 1.95%, China Shanghai SSE is up 1.88%. Singapore Strait Times is up 1.26%. Hong Kong is on holiday. In the currency markets, Swiss Franc and Yen are overwhelmingly the weakest ones on return of risk appetite. But commodity currencies are not gaining much for now. Instead, Sterling and Dollar are the strongest ones.
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While but USD/CHF and USD/JPY rebound notably today, they’re both limited below key near term resistance levels. Thus, such rebounds are still viewed as corrective for now and outlook in both pair stays bearish. USD/CHF will have to take out 0.9854 resistance decisively to confirm short term bottoming.
USDJPY’s development is a bit more bullish with trend line broken. Also bullish convergence condition is seen in 4 hour MACD. But still, sustained break of 108.80 resistance is needed to confirm short term reversal.
