White House “optimistic” on trade deal
Positive reaction in stocks minimal
US small caps showing more signs of resistance
Another day another trade headline. The repetitive nature of the will-they-won’t they headlines on a possible US-China trade deal seems to be not just growing old for those of us who analyse the markets but also for the markets themselves, with the latest one failing to cause as big a reaction as past iterations. The most recent news to cross the wires states that the White House are “optimistic about some kind of US-China trade deal” and that if a deal is reached then some tariffs could be lifted.
Compared to the rally seen yesterday morning on positive trade news the recent uplift is decidedly weak and could be seen to suggest that the boost from this recurring story has maybe run its course. Source: xStation
We pointed out earlier this week that there were signs that the US small cap index (US2000 on xStation) was potentially running out of steam and yesterday was another example of price making an attempt to run higher but failing to hold on to most of the gains. This saw a 3rd long wick form on the D1 candle in the past 4 days and if price closes around the current level or lower this evening then the weekly price action will also hint at a possible top.
After starting the week brightly attempted moves higher in the US2000 have failed to stick with intraday gains often handed back into the close. This is indicative of resistance and selling pressure and as long as the high of 1613 holds then a turn lower could lie ahead. Source: xStation
On a H1 timeframe the market has dropped below the Ichimoku cloud, hinting at a possible change in the short term trend lower. Source: xStation
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