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- The market movements during the Asian session and how to trade them
The market movements during the Asian session and how to trade them
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Loading...Trade during the Asian session will be mainly driven by China's manufacturing sector data, which was published at the weekend. September PMI manufacturing in the country slowed to 50.8 from 51.3 in August. This is the lowest value since February, and also much lower than the consensus forecast of economists - 51.2.
How will the worsening affect the markets?
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- Before sharing my expectations for the movements during the Asian session, I will note that two of the largest economic powers in Asia: China and Hong Kong are resting. This will generate extremely low liquidity and the likelihood of false moves will jump dramatically.
FX market - The lack of important news during the Asian session, the negative data on the Chinese production index and the rising eurozone crisis are likely to give the JPY temporary power. In such a situation, it is good to head to EUR/JPY. Let's look at the chart - EUR/JPY - Daily:
The pair passed over a key area of resistance, already supporting, and temporary uncertainty around China and Europe will boost the JPY and take some of the strength of the euro. In the upcoming session, I expect a bottom test on Friday. It is then good to look for a long entry, so we will have enough technical criteria for that - horizontal, diagonal 23.6% Fibonacci correction of the new trend and RSI over 50.
Stock Market - Negative data in China will have a negative impact on stock markets in the region. I expect sales in the mining sector and companies that are largely export-oriented to China. This will further boost JPY, as investors will be looking for a hedging tool to protect themselves against stock market negativity.
Trader Petar Milanov Read more:
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