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Market Brief: Hang Seng & Nikkei 225 Down, Australian Dollar In Trouble

Trade ideas

Asian equities continue to extend their losses as risk aversion weigh on investor sentiment. The Hang Seng Index fell by 1.7% yesterday while Japan’s Nikkei 225 was down 0.73%. In today’s Asian session, Hong Kong’s stock index is down close to 450 points or 1.70% as it trades at 26,441.0. Meanwhile, Nikkei 225 is down 0.48% or 110 points to 23,038 as of 6:20 am GMT, November 21.

Australian stocks also posted a 0.8% decline to follow the 3% it incurred on Tuesday.

No-Deal Between the US and China in 2019?

Recent news about the US Senate passing a bill that aims to protect rights of Hong Kong protesters weighed dashed hopes that a phase one deal will be finalized by this year. It was reported yesterday that trade experts and people involved in negotiations think that 2020 will be the earliest when the US and China come up with a trade deal. China is after higher rollbacks while US President Trump has been adamant about giving them. In fact, he has even threatened to scrap negotiations altogether if China does not accept terms presented by the US.

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Financial Trouble Down Under

Meanwhile, in Australia, a money laundering scandal has been spooking investors out of equity markets. Australian Prime Minister Scott Morrison called out Westpac’s board to reconsider Brian Hartzer’s role as CEO. The country’s second largest bank have been found with 23 million violations of anti-money laundering laws. Consequently, Westpac shares have fallen over 2% which weighed down heavily on the country’s stock index.

As for currencies, AUDUSD closed over 20 pips lower at 0.6801 while NZDUSD closed lower at 0.6415 from 0.6429.


AUDNZD Outlook

AUDNZD has broken support at 1.0670. The daily time frame shows that the currency pair is now trading between the 100 SMA and 200 SMA. A bearish close below 1.0560 could see AUDNZD fall to its lows for August 6 and test support around th3 1.0300 handle.

On the other hand, an upside break from the SMAs could mean that it’s time to buy Australian dollars. The next resistance level is at 1.0850 where the currency pair made highs on November 7.Download our latest quarterly market outlook for our longer-term trade ideas.

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