Wall Street closes in the red on trade war angst

Ross J Burland FXStreet

The Dow Jones Industrial Average DJIA shed 237.92 points, or 0.9%, to 25,347.77.
Trump said on Chinese products could go up “very substantially.”

Wall Street gave up gains, plummeting midday on trade war noise as the news hit the wires that Trump, speaking at a joint news conference Monday in Tokyo with Japanese Prime Minister Shinzo Abe, said the U.S. wasn't ready to make a trade deal with China. “They (China) would like to make a deal. We’re not ready to make a deal,” Trump said, according to Bloomberg. He added that tariffs on Chinese products could go up “very substantially.” as a result, The Dow Jones Industrial Average DJIA, -0.93% shed 237.92 points, or 0.9%, to 25,347.77, while the S&P 500 index SPX, -0.84% fell 23.67 points, or 0.8%, to 2,802.39. The Nasdaq Composite Index COMP, -0.39% dropped 29.66 points, or 0.4%, to 7,607.35.

DJIA levels

While below the 26000 psychological target, (50% Fibo of May swing high low range), short term stochastics had corrected higher giving more room for the bears to capitalise upon. A break to the 25200s guard a run to 24500s and then 50% of the upside run made at the end of Dec at 24150. On the upside, a break above 50% Fibo and 25620s and the descending resistance could be a challenge ahead of the 61.8% Fibo and 25700s. Bulls would then target an eventual break of 26000 which opens the 38.2% Fibo target at 26126 ahead of the 26300s, around the Nov and Fed peaks.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

AUD/USD hangs close to monthly lows, still defends 0.7100 ahead of Fed decision

AUD/USD retains its negative bias for the third straight day, defending 0.7100 while trading close to a monthly low in Wednesday's Asian session on Wednesday. The US Dollar stands firm near a two-week high as the anticipated Fed rate hike and oil-driven inflation fears continue to push US bond yields to a multi-year high. Furthermore, escalating Middle East tensions benefit the safe-haven buck and weigh on the risk-sensitive Aussie.

USD/JPY holds firm above 155.00, awaits Fed policy announcements

USD/JPY climbs to a fresh one-week high above 155.00 in the Asian session on Wednesday amid a bullish US Dollar. Oil-driven inflation fears, along with the anticipated Fed rate hike, continue to support surging US bond yields. Moreover, rising US-Iran tensions underpin the USD's reserve currency status. The pair, however, remains below the mid-155.00s as bulls seem hesitant ahead of the Fed decision later today and the BoJ meeting, starting on Thursday.

Gold defends key $4,280 support ahead of Fed verdict

Gold is attempting another run above $4,300 early Wednesday, replicating a tepid bounce seen in Tuesday’s Asian trading. Gold’s next major directional move depends on the US Federal Reserve monetary policy decision and outlook due later in the day.

Ethereum continues to attract capital despite impending rate hike and Clarity Act failure

Ethereum declined to $2,400 on Tuesday after the Clarity Act failed to progress in the Senate. Despite that and the market's near certainty of an interest rate hike at the next Federal Reserve (Fed) meeting, the top altcoin has continued to attract fresh capital. Ethereum buyers have been dominating sellers over the past few days.

August UK inflation report expected to show rising inflation

The United Kingdom Office for National Statistics will publish the highly anticipated Consumer Price Index data for August on Wednesday at 06:00 GMT. The inflation report could trigger volatility in the British Pound, as it comes just one day before the Bank of England monetary policy decision.

How Japan became the World's Banker and why that era may be ending

Japan's ultra-low interest rates helped finance trillions of dollars in global investments for more than a decade, making the Japanese Yen one of the world’s cheapest sources of funding. With the Bank of Japan expected to tighten policy again this week, that advantage may be entering a new phase. While most major economies raised interest rates, Japan remained the world's outlier.