Global view: What's happening?
While global coronavirus cases rise to 100 million, the risk assets keep rising as well! DXY remains relatively neutral, as it's range-bound between ~90.75 local resistance area and ~88.75 long-term support. I'd confidently consider trades in USD related pairs once DXY breaks either of the range borders. For now, it's better to abstain from USD trend continuation setups.
Meanwhile, major stock indices form trend continuation patterns. The consolidation period in the global markets is the best time for the quality trend setups in the relatively strong indices.
Betting on the strongest
I picked three strongest indices at the moment: US100, JP225USD and HK33HKD.
You can see that the American tech index has already recovered from the pullback and makes new highs, while the leading Asian indices are consolidating. Nikkei has been in momentum since it's come out from the 30-year range. Chinese economy looks best during the pandemic compared to the rest of the world. Initially, China A50 index, which represents China Mainland companies was relatively stronger than the Hang Seng index as the political situation in Hong Kong affected the latter one.
Now, investors see the discount that appeared in Hong Kong stocks priced higher in Mainland exchanges, which motivates big flows of investments back to Hong Kong. It resulted in the short-term relative strength of Hang Seng compared to China A50.
Trading tactics for buying Indices
1. The strategy in Asian indices is simple - buy the breakout the market closes above the recent consolidations (HK33HKD - above 30000; JP225USD - above 29000).
2. Although the best entry in US100 could be the breakout of 13200, I guess it still makes sense buying it intraday for a short-term momentum gain.
Conclusion
There is not much going on in FX market right now as USD keeps being bound in the range, meanwhile the major stock indices present trend continuation opportunities.
While global coronavirus cases rise to 100 million, the risk assets keep rising as well! DXY remains relatively neutral, as it's range-bound between ~90.75 local resistance area and ~88.75 long-term support. I'd confidently consider trades in USD related pairs once DXY breaks either of the range borders. For now, it's better to abstain from USD trend continuation setups.
Meanwhile, major stock indices form trend continuation patterns. The consolidation period in the global markets is the best time for the quality trend setups in the relatively strong indices.
Betting on the strongest
I picked three strongest indices at the moment: US100, JP225USD and HK33HKD.
You can see that the American tech index has already recovered from the pullback and makes new highs, while the leading Asian indices are consolidating. Nikkei has been in momentum since it's come out from the 30-year range. Chinese economy looks best during the pandemic compared to the rest of the world. Initially, China A50 index, which represents China Mainland companies was relatively stronger than the Hang Seng index as the political situation in Hong Kong affected the latter one.
Now, investors see the discount that appeared in Hong Kong stocks priced higher in Mainland exchanges, which motivates big flows of investments back to Hong Kong. It resulted in the short-term relative strength of Hang Seng compared to China A50.
Trading tactics for buying Indices
1. The strategy in Asian indices is simple - buy the breakout the market closes above the recent consolidations (HK33HKD - above 30000; JP225USD - above 29000).
2. Although the best entry in US100 could be the breakout of 13200, I guess it still makes sense buying it intraday for a short-term momentum gain.
Conclusion
There is not much going on in FX market right now as USD keeps being bound in the range, meanwhile the major stock indices present trend continuation opportunities.