The US-Chinese Trade War & It's Implications On All Assets!
Hello dear TradingView community, hope you're all doing well! ;)
As a frequent Top Author, I'm used to deliver daily analyses on crypto, sometimes on commodities and Forex. Those analyses will be mainly focused on technical levels, and day in day out, I can see my colleagues here doing the same (at least the ones who are really trading ;)).
Since the trade war between the US and China has escalated though, I feel like the majority of my analyst colleagues is disconnected to the underlying world news, and what huge implications it brings with it.
Because never forget: Technical Analysis helps us to see the important price levels & psychology of the current market participants, so it tells us WHEN the price is going to change. But WHY the price changes eventually, especially in the big picture like the weekly or monthly chart, is always due to the fundamentals.
Given this reality, I wanna start off maybe with the biggest inverse correlation that is taking place currently:
The US market, best seen with the S&P 500, is currently tanking, while BTC is rising, sort of like a safe haven.
Sure, BTC has quite successfully tested the bottom at the $9k region for quite some while before taking off, as I had analysed last week:
And even another time, just technically, we spotted the breakout that was about to come with this Cup & Handle pattern:
=> So far so good. What was a bit off though, was that BTC has been non-stop moving up since. A potential technical pause at $11k was not taken, albeit we had still room with the RSI:
=> BTC is since then still on a rip, pausing shortly at $12k. It is amazing that Bitcoin might be seen by global market participants as safe haven.
At the same time, the S&P 500 took a nosedive at 3k psychological, with individual tech stocks like Apple, Amazon or Facebook giving in more than 10%:
When global tensions heat up, traditionally secure markets that investors flee into are e.g. Gold or in Forex the Swiss Franc.
I had made the big flagship analysis on Gold's potential rise to its 2013 levels here. Since then Gold has broken its crucial resistance of the $1350-80 region and is heading towards $1500.
=> I can see currently that many of my trading colleagues keep looking at technical levels only, and giving out small timeframe signals based off on that. But we cannot neglect the fact that in the fundamentals, hedge funds like Bridgewater are shifting towards Gold, as explained here by Ray Dalio: www.linkedin.com/pul...gm-shifts-ray-dalio/
How can you e.g. explain what happened in US Dollar vs. Swiss Franc just technically? We had both a major trendline break to the upside, and even the horizontal price break of a C&H pattern afterwards, only to see a fake-out happening before completely collapsing:
Or how can you explain 12 subsequent red candles in the Aussie Dollar pair just technically? I'm overseeing 4 asset classes daily, and I'm unable to find 12 subsequent red candles into a completely oversold support zone:
The reason is very simple: US tariffs on China would at the same time heavily impact Chinese-Australian trade -the investors didn't give damn in this case about the support level.
Finishing off with the fundamentally weak Oil industry, which the market was calculating with oversupply anyways for the last year, Trumps words gave the rest for a market that is dependent on healthy global economies to thrive:
Conclusion:
In those times of big economic turmoil and a potential paradigm shifts for global economies it is crucial to not just focus on the technicals, but also on the fundamentals of the underlying assets that we are analyzing day in day out. Especially those who are publishing their opinion as analysts have a special responsibility towards their followers. I'm personally doing my best to get that understanding for my followers (also in crypto space with the government attack on BTC e.g.), and I wished I had more time towards research. But even if I don't have the time personally, I wanna warn the TradingView community in giving this out, because it is very concerning to me that not a single article on the main page is currently tackling this fundamental issue.
If you had some value from this analysis, you can help me to get more attention to it by clicking like and commenting underneath the video, as this is crucial for TradingView mechanism to rank it higher.
Have a wonderful rest of the week! ;)
Deniz from Edgy
As a frequent Top Author, I'm used to deliver daily analyses on crypto, sometimes on commodities and Forex. Those analyses will be mainly focused on technical levels, and day in day out, I can see my colleagues here doing the same (at least the ones who are really trading ;)).
Since the trade war between the US and China has escalated though, I feel like the majority of my analyst colleagues is disconnected to the underlying world news, and what huge implications it brings with it.
Because never forget: Technical Analysis helps us to see the important price levels & psychology of the current market participants, so it tells us WHEN the price is going to change. But WHY the price changes eventually, especially in the big picture like the weekly or monthly chart, is always due to the fundamentals.
Given this reality, I wanna start off maybe with the biggest inverse correlation that is taking place currently:
The US market, best seen with the S&P 500, is currently tanking, while BTC is rising, sort of like a safe haven.
Sure, BTC has quite successfully tested the bottom at the $9k region for quite some while before taking off, as I had analysed last week:
And even another time, just technically, we spotted the breakout that was about to come with this Cup & Handle pattern:
=> So far so good. What was a bit off though, was that BTC has been non-stop moving up since. A potential technical pause at $11k was not taken, albeit we had still room with the RSI:
=> BTC is since then still on a rip, pausing shortly at $12k. It is amazing that Bitcoin might be seen by global market participants as safe haven.
At the same time, the S&P 500 took a nosedive at 3k psychological, with individual tech stocks like Apple, Amazon or Facebook giving in more than 10%:
When global tensions heat up, traditionally secure markets that investors flee into are e.g. Gold or in Forex the Swiss Franc.
I had made the big flagship analysis on Gold's potential rise to its 2013 levels here. Since then Gold has broken its crucial resistance of the $1350-80 region and is heading towards $1500.
=> I can see currently that many of my trading colleagues keep looking at technical levels only, and giving out small timeframe signals based off on that. But we cannot neglect the fact that in the fundamentals, hedge funds like Bridgewater are shifting towards Gold, as explained here by Ray Dalio: www.linkedin.com/pul...gm-shifts-ray-dalio/
How can you e.g. explain what happened in US Dollar vs. Swiss Franc just technically? We had both a major trendline break to the upside, and even the horizontal price break of a C&H pattern afterwards, only to see a fake-out happening before completely collapsing:
Or how can you explain 12 subsequent red candles in the Aussie Dollar pair just technically? I'm overseeing 4 asset classes daily, and I'm unable to find 12 subsequent red candles into a completely oversold support zone:
The reason is very simple: US tariffs on China would at the same time heavily impact Chinese-Australian trade -the investors didn't give damn in this case about the support level.
Finishing off with the fundamentally weak Oil industry, which the market was calculating with oversupply anyways for the last year, Trumps words gave the rest for a market that is dependent on healthy global economies to thrive:
Conclusion:
In those times of big economic turmoil and a potential paradigm shifts for global economies it is crucial to not just focus on the technicals, but also on the fundamentals of the underlying assets that we are analyzing day in day out. Especially those who are publishing their opinion as analysts have a special responsibility towards their followers. I'm personally doing my best to get that understanding for my followers (also in crypto space with the government attack on BTC e.g.), and I wished I had more time towards research. But even if I don't have the time personally, I wanna warn the TradingView community in giving this out, because it is very concerning to me that not a single article on the main page is currently tackling this fundamental issue.
If you had some value from this analysis, you can help me to get more attention to it by clicking like and commenting underneath the video, as this is crucial for TradingView mechanism to rank it higher.
Have a wonderful rest of the week! ;)
Deniz from Edgy
