Ion Jauregui - ActivTrades Analyst
The recent decision by the United States to increase tariffs on Chinese products has reignited tensions in the trade relationship between the two powers. With Washington's intention to raise additional tariffs on products from China by up to 20%, Beijing is considering levies on agricultural and food exports from the United States. If unilateral measures persist, a firm and forceful response from Asia is likely to be triggered. Possible countermeasures include both the imposition of new tariffs and the implementation of non-tariff barriers, focusing on strategic sectors for the U.S. economy, such as agriculture and food. The Chinese Ministry of Commerce had already expressed its opposition to Washington's plans, arguing that these tariffs violate the rules established by the World Trade Organization (WTO) and jeopardize the multilateral trading system. The escalation follows a series of previous measures, in which the US government had announced an additional 10% surcharge on Chinese products, on top of a previously established 10%, in response to criticism of China's insufficient action to combat the entry of fentanyl into the United States. Previously, Beijing had responded to criticism that China had not taken sufficient action to combat the entry of fentanyl into the United States. Previously, Beijing responded to the first tariff measures applied by the US administration with tariffs ranging from 10% to 15% on certain products, along with new controls on exports of strategic minerals and an investigation against the technology giant Google (NASDAQ: GOOGL). The current scenario, can be defined as a “Tariff Carnival”, as it is only worth highlighting the volatility and risk involved in this trade dispute initiated by Trump with all the countries with which it maintains trade relations, whose effects could extend beyond the borders of the two largest economies in the world.
Hang Seng Analysis
In today's trading day, the retracement was not long in coming, closing the week with a bearish session, and continuing today's Asian trading day with a bearish closing. Although the trend is clearly bullish on a daily time frame, it can be seen that there has been a new bounce off the highs. In other words, after breaking new highs at 24,071.50 points the stock has corrected to an area just below the previous highs, in the body area. If the price action loses strength it could generate a bearish crossover that corrects the price in the direction of the previous price support zone at 19573 points. If the stock continues to beat the market strongly we will see a new attempt to pierce the highs. It should be noted that the RSI has marked excessive overbought at the time of the correction at 81.79% and the POC is located in the area of the previous impulse of 17,200 points. Therefore, a small price correction is quite foreseeable if these tariffs have a sufficient impact on the index's corporate results.
In conclusion, the scenario is shaping up as a “Tariff Carnival”, where the escalation of protectionist measures and chain reactions could extend their effects beyond the two largest economies in the world, significantly impacting international trade and the stability of financial markets.
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
The recent decision by the United States to increase tariffs on Chinese products has reignited tensions in the trade relationship between the two powers. With Washington's intention to raise additional tariffs on products from China by up to 20%, Beijing is considering levies on agricultural and food exports from the United States. If unilateral measures persist, a firm and forceful response from Asia is likely to be triggered. Possible countermeasures include both the imposition of new tariffs and the implementation of non-tariff barriers, focusing on strategic sectors for the U.S. economy, such as agriculture and food. The Chinese Ministry of Commerce had already expressed its opposition to Washington's plans, arguing that these tariffs violate the rules established by the World Trade Organization (WTO) and jeopardize the multilateral trading system. The escalation follows a series of previous measures, in which the US government had announced an additional 10% surcharge on Chinese products, on top of a previously established 10%, in response to criticism of China's insufficient action to combat the entry of fentanyl into the United States. Previously, Beijing had responded to criticism that China had not taken sufficient action to combat the entry of fentanyl into the United States. Previously, Beijing responded to the first tariff measures applied by the US administration with tariffs ranging from 10% to 15% on certain products, along with new controls on exports of strategic minerals and an investigation against the technology giant Google (NASDAQ: GOOGL). The current scenario, can be defined as a “Tariff Carnival”, as it is only worth highlighting the volatility and risk involved in this trade dispute initiated by Trump with all the countries with which it maintains trade relations, whose effects could extend beyond the borders of the two largest economies in the world.
Hang Seng Analysis
In today's trading day, the retracement was not long in coming, closing the week with a bearish session, and continuing today's Asian trading day with a bearish closing. Although the trend is clearly bullish on a daily time frame, it can be seen that there has been a new bounce off the highs. In other words, after breaking new highs at 24,071.50 points the stock has corrected to an area just below the previous highs, in the body area. If the price action loses strength it could generate a bearish crossover that corrects the price in the direction of the previous price support zone at 19573 points. If the stock continues to beat the market strongly we will see a new attempt to pierce the highs. It should be noted that the RSI has marked excessive overbought at the time of the correction at 81.79% and the POC is located in the area of the previous impulse of 17,200 points. Therefore, a small price correction is quite foreseeable if these tariffs have a sufficient impact on the index's corporate results.
In conclusion, the scenario is shaping up as a “Tariff Carnival”, where the escalation of protectionist measures and chain reactions could extend their effects beyond the two largest economies in the world, significantly impacting international trade and the stability of financial markets.
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.