- The ASX 200 drops below 1% of the gains made during the first 15 minutes of trading.
- Oil markets fail to maintain enthusiasm.
- AUD / USD goes red when Chinese data appears on the screens.
Wall Street was relaunched Thursday after Saudi Arabia announced a unilateral reduction of an additional one million barrels a day, driving up oil prices and boosting morale. West Texas crude oil rose 9.5% to $ 27.69 US per barrel. Financials were also supported on the prospects for new stimulus measures.
However, a darker tone could be established when investors refocus on reality. COVID-19 will not go away and the trade wars are here to stay too. President Donald Trump is adamant that this is not the right time to start a dialogue with Chinese President Xi Jinping due to the coronavirus pandemic. Instead, he told Fox Business Network that he plans to cut ties with the world’s second largest economy.
This comes at the same time as fear grows that China will launch a third economic strike against Australia in response to Canberra’s support for an investigation into the origins of COVID-19. China has already suspended meat imports from at least four Australian slaughterhouses amid sour relations between the two nations. It is a toxic combination that should weigh more heavily on stock prices, both at home and in the United States and China.
Data dump in China
In more recent news, Chinese data arrived and cut the wind on the Australian dollar, which is now launching at 0.6452 as the first Asian support line was created.
ASX 200 index levels
The 38.2% Fibonacci level (5470) holds. The index has been trading between there and Fibo by 23.6% since the end of March. The declines will seek extension below the lowest COVID-19 of 4402. However, on a higher breakout will continue toward an average reversion of 50% at 5794 before a gold ration of 61.8% at 6127.