GER30 has gained decent momentum and is currently testing a major resistance level at 12.660 resistance. The index has been lagging behind the US indices for a while. However, now that the chances of a trade deal between the USA and China are improving, and the ECB is preparing further monetary policy, the GER30 might catch up. A clear break above the 12.660 level could pave the way for a rally towards 12.820 resistance.
GBPUSD broke above the 200 DMA, as traders are starting to price in the possibility of a deal between the EU and UK. A daily close above the 200 DMA would be a bullish sign, and the next bull target would then be 1.2840. Speculative positioning is still skewed to the bearish side, so there is potential that the short squeeze may extend well beyond the 200 DMA.
USDJPY is slowly approaching the 200 DMA around 109. A clear break above that level could signal an extension of the rally towards the psychological resistance level at 110. The currency pair is benefiting from renewed Dollar strength, as well as an increase in risk appetite in global markets.
Positive market sentiment should also benefit AUD/JPY, which is approaching the falling trendline from the June high. Should the currency pair clear that obstacle, the next bull target would then lie at 75.00. To the downside, traders will be keeping an eye on the 21 DMA and 71.75 support.
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Ongoing rate curve repricing and risk asset reaction perfectly illustrate how worryingly reliant investors have become on easy money policies