How to trade on August 18?

Risk-on is back on the market. The US dollar is dipping down, while riskier currencies and stocks are rising.

Fundamentals

• The pressure between the USA and China mounts. US officials imposed new restrictions on Huawei Technologies. They added to the US blacklist 38 Huawei affiliates in 21 countries.
• China has started an anti-dumping investigation into imports of wine from Australia. In addition, this morning the RBA released minutes of the last monetary policy meeting. The tone was quite dovish. Nevertheless, even the combination of US-Australian tensions and the dovish RBA statement hardly weighed on the Australian dollar. It keeps rallying amid the improved market sentiment.
• Traders are waiting for Washington to unveil the next fiscal stimulus. Analysts believe that now the market is not yet fully risk-on. The stimulus package will add more optimism.

Technical tips

EUR/USD

EUR/USD has approached the key resistance at 1.9000, which it has touched a few times already. The price is likely to bounce off this level. However, if it manages to break through, it may jump to the next resistance at 1.1950. Support levels are at the low of August 17 at 1.1840 and at the key psychological mark at 1.1800.

S&P 500

S&P 500 has failed to cross the all-time high at 3 390, but it stays really near that level. If it breaks down the low of August 11 at 3 335, it may fall even deeper to the next support at 3 270.Gold

XAU/USD has just broken through the $2 000 level. If it crosses the resistance at $2 035, it may jump higher to the record high at $2 070. On the flip side, if breaks down the 50 moving average on the 4 hour-chart at $1 985, it may fall deeper to the next support at $1 965.

USD/JPY

USD/JPY has touched the 23.6% Fibonacci level at 105.50. If it manages to break it through, it may fall to the low of March 11 at 104.40. On the upside there are resistances at 107.00 and 107.70. Follow further news!

TRADE NOW

Author: FBS Analyst Team

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