The pair was expected to reverse in the short term while looking for a catalyst that will determine the future of the pair. UK Prime Minister Theresa May was not able to get an approval from the British Parliament for the draft negotiation deal between the UK and the EU. MP’s are worried about the “Soft Brexit” which might derail a future bilateral agreement and China. Japan was also looking to China for a bilateral trade relations as the negotiation between Japan and the US favors the later. Histogram is showing weakness while EMAs 15 and 21 has a low chance of a sudden reversal.
The pair was in a death cross, which will add a more bearish stance for the pair. Australia was taking a firmer stand against the aggressiveness of China by granting more loans to Pacific nations and ratifying the CPTPP (Comprehensive and Progressive Trans-Pacific Partnership) without the United States. Though it was seen as a progress it promoting multilateralism and defying China, it was putting itself in a possible conflict with the China. New Zealand on the other hand takes a softer tone by not leading the CPTPP and continuing its trading relation with China which was its number one (1) trading partner. Histogram and EMAs 13 and 21 began to crossover, but the MAs 200 and 50 will put more pressure to sold down the pair.
The pair was expected to continue its rally. As Trump declared a trade war, countries affected by it deals with the situation in different ways. Australia, together with Japan, leads the ratification of the CPTPP (Comprehensive and Progressive Trans-Pacific Partnership) without the United States. It also counter efforts by China to influence the Asia Pacific by granting soft loans to cash strapped nations. Canada on the other hand, was forced to ratify USMCA (United States, Mexico, Canada), but was seeking bilateral trade relation with China, which according to Article 34.6 of USMCA, countries that will seek a bilateral relations needs to notify signatories of the trading pact six (6) months before it will depart from the pact. Histogram and EMAs 13 and 21 shows a strong reversal but the recent candle shows a bounce back from MA-200 and suppot.
The pair was seen to further continue the slide after completing the “Head and Shoulder” pattern. Australia and Japan will lead the ratified CPTPP (Comprehensive and Progressive Trans-Pacific Partnership). However, the two countries are not only in conflict with the US, but also with China. Australia had stepped up its game by providing more grants and loans that what China can offer, after being challenged by China in Australia’s uncontested dominance in the Asia Pacific. Japan meanwhile, draws closer ties with China after the meeting between President Donald Trump and Prime Minister Shinzo Abe resulted to an advantage in favor o the US. Histogram and EMAs 13 and 21 was in a free fall.