This weekend's summit between the U.S. and China is a major event that will influence the market in the latter half of this year! [From Mr. Rikio Shima's newsletter]
From the investment newsletter Practical Real Trades by Rieo Shima (Shima Rikio) provided by GogoJungle, here is a small excerpt from today’s issue.
In the overseas markets yesterday, Brades Central Bank President Brainard said that it is not the time to cut rates by 0.5%, triggering a dollar short-covering. Following this, Chair Powell’s remarks were almost the same as at the FOMC, but the major shift in policy over the past six months has been “largely due to the impact of trade issues,” and there were statements suggesting that the progress that seemed to have occurred turned into greater fruitlessness, which could be interpreted as having a decisive impact on financial policy due to the breakdown of the U.S.-China agreement.
In that sense, although it’s a hypothetical scenario, if there were a surprising U.S.-China agreement in Osaka, a July rate cut could be ruled out. However, the likelihood is low. Still, preparation is necessary, so there is a high possibility that positions will be adjusted before the weekend.
This weekend’s U.S.-China summit could be a material that will significantly influence the market for the latter half of the year.
Additionally, according to Bloomberg, the Trump administration in the United States may place currency issues at the center of the G20 agenda. President Trump criticized Europe and China last week for devaluing currencies to compete with the United States. In fact, there has long been whispers that the Trump administration may ultimately aim to push the dollar lower.
On the chart, I believe EURUSD has fully bottomed, but if a stop at 1.1340 is reached, I think it should be exited. Yesterday it fell to around 1.1345, but then rebounded sharply. Probably there was quite a large amount of buying. However, given the importance of weekend events, I would consider unwinding. Place a stop at EURUSD 1.1340; if hit, I will liquidate all positions at that rate.
USDJPY −0.8 at 107.75
EURUSD +1.3 at 1.12645
USDCHF −0.5 at 0.9712
‘Shima Rikio's Practical Real Trades’ (Shima Rikio)quoted.
Starting tomorrow, the G20 Summit will be held in Osaka. What to watch is whether there will be signs of improvement in the U.S.-China relationship after the summit. Since many experts expect that a U.S.-China agreement is unlikely, building trading strategies with that in mind will be important. (Editorial staff)
