Despite Beijing's objection, President Trump has gone ahead and signed two bills backing Hong Kong's protesters into law. Beijing has continuously voiced strong objection against the legislation as China sees it as meddling in its domestic affairs. Trump signed these bills as US and China still try to reach a phase one trade deal. China immediately responded by saying the bills reflect sinister intentions and hegemonic nature of the United States. The Hong Kong government also expressed strong opposition to the bills. It said it extremely regrets the U.S. repeatedly ignoring Hong Kong's concern regarding the two bills.

The first bill will require the State Department to assess annually whether Hong Kong is sufficiently autonomous to retain its special U.S trading status. Under the special status, the city is not subject to the tariffs that have been levied on China. The bills also allow the U.S. to sanction government officials the U.S. deems responsible for human rights violation in Hong Kong. The second bill will prevent the sale of tear gas and rubber bullets to Hong Kong police.

China has said it's considering a strong countermeasure. However, it's still not known what they would be doing. Hu Xijin, the editor in chief of the Chinese state-run Global Times, suggested on Twitter that China was considering barring people responsible for drafting the legislation from entering mainland China, Hong Kong, and Macau.

Several economists believe that the bills might encourage further protests and riots in Hong Kong. If the situation escalates badly, and China has to do military intervention, it will be impossible to reach trade deal. However, so far China seems to still leave the door open for a trade deal with the U.S. despite the strong complain. Both US and China have enough incentives to keep trade, Hong Kong, and political issues on separate tracks.

Now that the bills are officially signed, will it derail the risk-on rally? What does the Elliott Wave tell us about the recent development? Below we will take a look at a few major Indices:

 

Russell 2000 (RTY_F) Elliott Wave Chart

RTY

Russell 2000 (RTY_F) has recently broken above May 7, 2019 high (1621.9) opening up a bullish sequence from December 26, 2018 low. The Index now has scope to extend higher to 100% extension towards 1810.3 – 1897.1 area. Short term dips should continue to find support in 3, 7, or 11 swing as far as pivot at 1448.06 remains intact.

 

Nifty Elliott Wave Chart

NIFTY

Nifty from India recently broke above June 3, 2019 high (12103.05). The break opens up a bullish sequence from October 26, 2018 low. The Index should continue to see more upside and dips likely find buyers in 3, 7, 11 swing as far as pivot at 10643.92 stays intact. The Index has a 100% minimum target towards 12726.9 – 13220.5

Based on the technical outlook, we can conclude that global Indices should remain resilient despite the geopolitical issue on Hong Kong. Indeed, despite all the harsh criticism, China still seems eager to finalize phase 1 trade deal with the U.S.

FURTHER DISCLOSURES AND DISCLAIMER CONCERNING RISK, RESPONSIBILITY AND LIABILITY Trading in the Foreign Exchange market is a challenging opportunity where above average returns are available for educated and experienced investors who are willing to take above average risk. However, before deciding to participate in Foreign Exchange (FX) trading, you should carefully consider your investment objectives, level of xperience and risk appetite. Do not invest or trade capital you cannot afford to lose. EME PROCESSING AND CONSULTING, LLC, THEIR REPRESENTATIVES, AND ANYONE WORKING FOR OR WITHIN WWW.ELLIOTTWAVE- FORECAST.COM is not responsible for any loss from any form of distributed advice, signal, analysis, or content. Again, we fully DISCLOSE to the Subscriber base that the Service as a whole, the individual Parties, Representatives, or owners shall not be liable to any and all Subscribers for any losses or damages as a result of any action taken by the Subscriber from any trade idea or signal posted on the website(s) distributed through any form of social-media, email, the website, and/or any other electronic, written, verbal, or future form of communication . All analysis, trading signals, trading recommendations, all charts, communicated interpretations of the wave counts, and all content from any media form produced by www.Elliottwave-forecast.com and/or the Representatives are solely the opinions and best efforts of the respective author(s). In general Forex instruments are highly leveraged, and traders can lose some or all of their initial margin funds. All content provided by www.Elliottwave-forecast.com is expressed in good faith and is intended to help Subscribers succeed in the marketplace, but it is never guaranteed. There is no “holy grail” to trading or forecasting the market and we are wrong sometimes like everyone else. Please understand and accept the risk involved when making any trading and/or investment decision. UNDERSTAND that all the content we provide is protected through copyright of EME PROCESSING AND CONSULTING, LLC. It is illegal to disseminate in any form of communication any part or all of our proprietary information without specific authorization. UNDERSTAND that you also agree to not allow persons that are not PAID SUBSCRIBERS to view any of the content not released publicly. IF YOU ARE FOUND TO BE IN VIOLATION OF THESE RESTRICTIONS you or your firm (as the Subscriber) will be charged fully with no discount for one year subscription to our Premium Plus Plan at $1,799.88 for EACH person or firm who received any of our content illegally through the respected intermediary’s (Subscriber in violation of terms) channel(s) of communication.

Analysis feed

Latest Forex Analysis

Editors’ Picks

Bears ignore Aussie holidays, cheer coronavirus news at fresh multi-week low near 0.6815

AUD/USD drops to 0.6814, with an intra-day low of 0.6811, during the early Monday morning in Asia. The fears of China’s coronavirus outbreak are dominating the market’s risk sentiment off-late.

AUD/USD News

USD/JPY: Coronavirus bearish gap breaks below 109

USD/JPY has dropped heavily in the open, breaking below the 109 handle to print a fresh low of 108.88 as traders prepare for a risk-off week when considering the implications of the Coronavirus. 

USD/JPY News

Are you anxious about Coronavirus? Well, so are the markets

There's so much we don't know about Coronavirus, which increases the level of concern from public health officials, you & I as well as the markets and we can expect a risk-off start to the week ahead of a pretty major schedule.

Read more

WTI: Bears pile in on Coronavirus and ME threats

WTI is starting out the day on the offer, opening in a bearish gap and extending the bear trend to a low of $52.19 and lowest levels since October. Global growth and risk-off themes are affecting the price.

Oil News

GBP/USD: 50-day SMA, 61.8% Fibonacci question sellers

Cable stays weak while declining to the intra-day low of 1.3068 by the press time of Monday’s Asian session. The pair registers 3 days losing streak while also forming a lower high pattern if observed its moves from Dec 2019 top.

GBP/USD News

Forex Majors

Cryptocurrencies

Signatures