Asian stocks finished higher in a volatile session after the White House trade advisor Navarro said that the trade aggreement with China is over because China failed to inform the U.S. about the coronavirus outbreak. The news not only wiped out early gains, but it pushed Nikkei and the U.S. futures sharply lower while the USD and gold pushed higher. President Trump calm markets in a tweet saying that China trade deal is intact as long as China continue to live up to the terms of the agreement.
Last week we had an improvement in China – USA relationship after China said it plans to step up purchases of U.S. corn, soybeans, and ethanol in line with the phase-one trade deal.
Today’s developments clearly show that the trade tension is far from over and might get worse as we approach the November election.
Wall Street ended higher yesterday as investors bet on a fast recovery despite the rising new coronavirus cases in many states.
Asian stocks managed to end higher after a wild swing earlier. Nikkei finished 0.50% higher at 22,549. The Hang Seng Index is 0.85% higher at 24,720. The Shanghai Composite index is 0.16% higher at 2,970, while the Singapore Straits Times index is 0.01% lower at 2,628.
ASX 200 managed to return to gains after a volatile session amid the confusing headlines from the phase one trade deal. The morning gains erased after the news, but President Trump’s tweet improved sentiment, and the index returned to positive territory. Investors are looking for the next catalyst to initiate a new trend. The ASX 200 index has trapped between the 100-day moving average and the 6,000 mark.
On the technical analysis side, the initial resistance stands at 5,999 the daily high. Next hurdle will be met at 6,148 the high from June 11. If the ASX 200 index breaks higher, then the next supply zone stands at 6,294 the 200-day moving average.
The immediate support for the ASX index will be met at 5,882 the daily low, while the 100-day moving average will provide extra support at 5,829. In case of a break lower than 5,829, sellers might test the next support area at 5,719 the low from June 16 trading session.