Daily Charts and Analysis December 7, 2018

Here are the latest technical charts and analysis. Read on!

GBPNZD

The pair will continue to go lower in the following days as it enters the “Death Cross”. New Zealand was the first country to express its interest in making bilateral trade relations with the United Kingdom. Aside from this, New Zealand is increasing its exposure globally with its latest move to ban Chinese tech giant Huawei, together with other Five Eyes Intelligence Alliance members United States, United Kingdom and Australia. The United Kingdom on the other hand was distracted with its withdrawal from the European Union. The UK Parliament is set to vote on December 11, 2018 regarding the deal that was negotiated by UK Prime Minister Theresa May to the European Union. Histogram and EMAs 13 and 21 is expected to reverse soon.

USDTRY

The pair is anticipated to fall with the impending “Death Cross”. Investors are waiting for a catalyst that will move the price after Trump refuses to sanction Saudi Arabia relating to the killing of Jamal Khasoggi, although the US Congress sanctioned individuals involved. This drove Turkey in improving its trading relations with China to pressure the US to take more action. Turkey was able to persuade the European Union and its members Germany, Denmark and Finland, to halt their arms sales to Saudi Arabia’s war in Yemen, which pushes Turkey one step closer in joining the European Union. Histogran and EMAs 13 and 21 started to reverse.

EURBRL

The pair will continue its rally as the United States and China agreed to have a 90-day truce with their trade war. This agreement took effect on the sideline meeting between US President Donald Trump and Chinese President Xi Jinping during the G20 Leader Summit in Buenos Aires, Argentina. This gave countries the time to strategize their imports and exports to dodge the effect of trade war, and was the time for the European Union to step up its effort in promoting multilateralism. However, Brazil, which benefited during the trade war, will suffer from the truce since China can find cheaper alternatives in its soybean imports aside from Brazil, which accounts to 80% of its soybean imports. Histogram and EMAs 13 and 21 supported the continued rally.

USDBRL

The pair continued its rally following the trade truce between the United States and China. While most of the emerging economies are tumbling after the trade war escalated and disrupted the global order, Brazil was benefiting from China’s import shift after it allocated 80% of its soybean imports to Brazil. However, the trade truce between the US and China will give countries the time to re-allocate and strategise their imports. Aside from that, Brazilian President Jail Bolsonaro had a populist stance which fits Trump’s policies. Trump can also pressure Brazil by imposing more tariffs if it sees that its trading relation with China was affecting the United States. Histogram and EMAs 13 and 21 prevented to complete the reversal.