HSCEI (CHNComp) climb back to the crucial resistance zone
GBPUSD trades in the vicinity of important price zone
Concerns over global slowdown negatively impact copper prices
The first of three charts we consider interesting this week is HSCEI (CHNComp) - the Chinese stock market index. Negotiators from China and the United States will start a fresh round of trade talks in Washington tomorrow. What differs upcoming talks from the ones that were held earlier this month is the fact that now high-profile officials will meet. However, the latest turmoil surrounding Huawei may turn to be a hurdle towards making progress. A failure to move closer to resolving a deal may exert pressure on the global stock markets. CHNComp moved higher towards the supply zone in the vicinity of 11000 pts after an over 12% rally since the latest low. The aforementioned zone is additionally strengthened by the 200-session moving average therefore bulls may find it to be a hard nut to crack.
When it comes to the FX market, the British pound continues to be in the spotlight. GBP remains to be sensitive to any headlines relating to the Withdrawal Agreement. The UK Parliament will vote on the so-called “Plan B” today but odds suggest that the political impasse is likely to prevail. On the other hand, in case the parliament votes for amendments proposed by MPs the UK PM Theresa May will have to go back to Brussels to renegotiate terms of the deal. Diminishing chances of no-deal Brexit support GBP recently allowing GBPUSD to visit 1.3280 area. From the technical point of view, the pair may now erase some of the latest gains and even pull back towards the 50-session moving averages channel. Moreover, it should be noted that tomorrow’s FOMC meeting may have big impact on the USD and in turn on GBPUSD as well.
As the trade talks are to be resumed tomorrow it may be worth to take a look at the situation on copper market. Prices of commodity are hugely dependant on the condition of the Chinese economy. Negative news concerning trade talks could hint that the Chinese economy could slow further and are likely to exert pressure on copper prices. On the daily frame, copper price rebounded off the lows from mid-2018. However, pace of rally was rather lacklustre and it looks like current improvement of moods may be short-lived. Breakthrough in trade talks seems to be the only chance for copper to produce a longer-lasting upward move.
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