“Trump unleashes on Twitter.”
Donald Trump gave stock Market bulls reason to get nervous on Monday launching a number of Twitter attacks. Amongst others, Trump said “Only fools, or worse, are saying that our money-losing Post Office makes money with Amazon. THEY LOSE A FORTUNE, and this will be changed.” “Mexico is making a fortune on NAFTA…They have very strong border laws – ours are pathetic. With all of the money they make from the U.S., hopefully they will stop people from coming through their country and into ours, at least until Congress changes our immigration laws!” Markets were already edgy after China announced Tariff plans of its own on Monday but it was after Trump’s Twitter tirade about Amazon things started to get ugly. The S&P 500 this morning has closed a daily candle below its 200 Day EMA which I have been telling traders for weeks is a barometer that could signal a larger correction is on the way. If the S&P 500 closes consecutive bearish daily candles below the 200 Day EMA we could see a serious correction on global stock indexes in coming weeks which would rally the Yen and send the Aussie and Kiwi Dollars to new lows. The Euro has been trading sideways for all of March and a fall in stock indexes I believe would send the Euro to a new high.
Trading volumes on Monday were lighter due to some countries having an extended long weekend for Easter but I can’t see anything today that will change the sentiment for the Asian trading session from negative to positive. The Aussie Dollar could be in trouble today at 2.30pm AEST when the RBA releases its latest monthly statement and interest rate decision. The RBA won’t change the cash rate from 1.5% today however it will likely give some forward guidance as to what it thinks about inflation, wages growth and the general state of the economy. The long and short of the statement I believe will point towards interest rates remaining on hold for the foreseeable future and therefore traders will continue to sell down the local Aussie currency. There is no high impacting news for the European or US trading sessions and therefore I conclude falling stock indexes will likely be the theme for financial markets today with a risk-off mood, rising Yen and falling risk assets as traders flee to safe haven plays.
Don’t discount the S&P 500 closing below its 200 EMA on the daily chart. Hedge Funds and Investment Banks will have been eyeing off this level since January and are well aware of how the market could capitulate if more accelerated selling takes hold.
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About the Author: Andrew Barnett
Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular keynote speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).
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