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The Chinese government announced that it would impose tariffs up to 25% on 128 U.S products. According to BEIJING (Reuters), the tariffs announced on Sunday, 1st of April, and the products affected will include frozen wine, specific fruits and nuts, and pork. These tariffs will take effect on Monday, 2nd of April. It could be inferred that this action might be a response to tariffs on US imports of steel and aluminium.
Furthermore, the Chinese Minister of Commerce announced that he would suspend his obligations to the World Trade Organization (WTO) to reduce tariffs on 120 US goods, including fruit and ethanol. Note that the tariffs on those products will be increased by an extra 15%.
The Chinese Finance Ministry stated the following “China's suspension of its tariff concessions is a legitimate action adopted under WTO rules to safeguard China's interests”.
This trade war is here to stay as the two major economies of the world are not stepping back. Based on the facts, the main loser will probably be the manufacturing sector because it is the primary consumer of several goods hit by tariffs. A possible outcome of this could be the increase in prices and the decrease in staff expenses so that to meet the profit targets.
This Monday, SINGAPORE (Reuters) reported that the USD is still steady versus the YEN. Investors tend to be cautious due to the uncertainty of this trade war. The USDJPY presented a rise over the last week. Investors hope for a diplomatic solution on North Korea’s nuclear program.
Technical Analysis on USDJPY
Based on the Ichimoku system, it could be noticed that the price seems to consolidate, provided that it is taken into consideration that the price, the lines Tekan Sen and Kijun Sen, and the Chikou span, are in the cloud. Due to the uncertainty, created by the trade war, we might consider looking for potential buy signals, if the price breaks a potential upper Kumo cloud and the Chikou Span is above the cloud.
About the Author:
Marios Athinodorou is TeleTrade’s market analyst and commentator. Apart from being an experienced trader, Marios is an advanced technical analyst and is interested in trading psychology. He has 7 years of trading expertise in Forex and CFDs, providing insights to share with all kinds of traders, from beginners to experts.
Among other, Marios is delivering weekly trading webinars. Sign up for upcoming webinars, here.
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