Hong Kong protest get hot on US-China – Market Analysis – May 22

Hong Kong protest get hot on US-China – Market Analysis – May 22

As Coronavirus wanes markets brace for geopolitical turmoil

China has decided to seize complete power over Hong Kong by implementing the so-called security law that would allow, among other things, the direct action of the mainland police in the city. This action takes place at the hottest moment in relations with the United States, which has been openly supporting the protests of the Hong Kong population against full political integration with China in recent months.

In the market, this measure is interpreted as a direct dare from China to the Trump government. It is, therefore, one more element of uncertainty that can pose an obstacle to the recovery of the world economy if the tension escalates to the point of weakening trade relations.

Stock markets reacted to the downside with the news but have gradually regained territory during the session, given the lack of immediate reaction by the Trump administration to the news. This non-response can be valued by the market as an intention from Trump not to raise the level of hostility, but investors will be very attentive in the coming hours/days to events.

The USD

Meanwhile, and awaiting news, the stock market remains flat and unchanged.

On the other hand, the dollar strengthens as a safe haven against all major currencies except JPY.

EUR/USD has continued to the downside due to a stronger Dollar and the intention of the ECB to increase its asset purchase policy, as we have learned after the publication of the minutes of its last meeting. Central bank officials say that when they learn about the forecasts from the Eurosystem Staff Macroeconomic Projections, they will assess the need to increase their stimulus package. As the economic figures for the Eurozone continue to be negative, the market is beginning to anticipate this measure, which would put downward pressure on the Euro.


The main support level is at 1.0770 in a daily close.

Another currency sold today against the Dollar has been the pound. UK Retail Sales for April fell 18.4% and raised market expectations for the BOE to cut interest rates at its next meeting with the possibility of negative interest rates being implemented.GBP/USD has fallen to 1.2160, and its next support level is at 1.2080, its previous low. The general objective of the reversal pattern of the daily chart is 1.1850.


The Australian Dollar has also weakened in today's session. The rating agency Fitch has downgraded Australia's outlook to negative. Although it maintains its AAA rating but prospects are uncertain due to the effects of the pandemic crisis. AUD/USD is still continuing its upward trend, although with signs of exhaustion that are reflected in bearish divergences in the daily RSI. The pair needs to break the support at 0.6373 to end the current trend and head towards new lower targets.



Die hier präsentierten Informationen wurden von Miguel A. Rodriguez erstellt und sind nicht als Investitionsberatung gedacht. Die hierin enthaltenen Informationen werden als allgemeine Marketingmitteilung nur zu Informationszwecken bereitgestellt. Als solche wurden sie nicht in Verbindung mit gesetzlichen Bestimmungen zur Förderung der Unabhängigkeit des Investment Research erstellt. Sie unterliegen nicht dem Verbot, vor der Verbreitung eines Investment Research gehandelt zu werden.

Die Benutzer / Die Leser sollten sich nicht nur auf die hier präsentierten Informationen verlassen und sollten ihre eigene Forschung / Analyse durchführen, indem sie auch die eigentliche zugrunde liegende Forschung lesen.

Key Way Investments Ltd hat keinen Einfluss auf die Formulierung der hierhin enthaltenen Informationen.Der Inhalt ist dabei generisch und wird nicht die individuelle persönliche Umstände,Anlageerfahrungen oder die aktuelle finanzielle Situationen berücksichtigten.

Daher übernimmt Key Way Investments Ltd keine Haftung für Verluste von Händlern aufgrund der Verwendung und des Inhalts der hierin enthaltenen Informationen. Die Wertentwicklung der Vergangenheit ist kein verlässlicher Indikator für zukünftige Ergebnisse.