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AUD/NZD
What is happening is that this is a wider part of US strategy for the Asia and Pacific region. Under president Obama the US made a key foreign focus shift from Europe to Asia. The so called ‘Pivot to Asia’. It is not hard to see the reasons why with half the world’s population living in that region and half of all global economic output due to be coming from that region by 2050. Asia is critical to the US and there is a continual tug of war in the region as to which side you are on. China or the US. Which superpower do you cuddle up to? This issues is wider and deeper than this one post can make, however the takeaway for me is twofold:
1. The US and China are going to have lots more clashes in the years to come
2. For now, China will backdown.
So, from a geo-political position, it seems most likely that China will find a way to de-escalate the US/China ‘war’ debacle. AUD should rally if and when it does. The last two days have seen glimmers of hope for that.
From a technical perspective, it gets simpler thankfully. AUD/NZD sitting at 100MA on the 4hr chart and the 50% fib level. Risk can be defined below the 100MA (blue line)