US Resumes Talks With China, Where To Invest In Asia?

The White House has given Beijing a chance to prevent the imposition of new customs duties on Chinese goods by proposing a new round of talks later this month. On the part of China, the proposal is unlikely to meet resistance, given the declining stock markets and the ever-increasing investment risk that all Asia is experiencing.

The possible resumption of trade talks comes amid reports from some US administration officials that, according to them, there is a vulnerability and, in all likelihood, more flexibility among Chinese government officials, pressed by the duties already imposed and the threat of new ones.

Is it time for investment in Asian and Chinese assets?

Let's look at two of the most traded ETFs in developing economies.

FXI.US W1 - Introduces Chinese companies with great capitalization

The ETF is at a key level of support, but is already outside the upward channel formed by the collapse of Asian markets in 2015. If we are considering investing in Chinese markets through this ETF, it is good to monitor its behavior by the end of the month when the new round of negotiations between China and the US is expected. If the support zone formed by 50% Fibonacci correction and 200SMA endure and at the same time the two strongest economies shrink their hands is good to comply with it. Under such circumstances, the SL at 38.70 levels will be perfectly suited and could protect us from eventual Stop Hunting. RSI remains close to an over-sales zone, but does not report a promotion.

EEM.US W1 - MSCI Emerging Market ETF - Represents emerging markets as a whole

In the long run, the activated triangle and subsequent correction give us good levels for positioning with long positions. With a good development of the negotiations at the end of the month, I expect the price to be in line with the support created by the top diagonal of the triangle, 50% Fibonacci Core Trend Correction as well as 200SMA. SL would be worth $ 38.80. 50 and 200SMA remain beached while RSI is in neutral territory.

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