The bell rings and the Pavlov reaction goes into effect
The headlines of the potential for investment restrictions into China, and the delisting of China companies rang Pavlov’s bell.
- Stocks moved lower
- Gold moved higher
- Yields initially dipped
In the forex market, the USDJPY quickly fell from 108.15 to a low of 107.784. Looking at the hourly chart, however, that tumble did – just as quickly – find support at the 100 and 200 hour MAs at 107.78 level (blue and green lines) . Those MAs were key levels on the move higher today (see earlier post), and it was again on the dip back down.
The price has since moved back higher. It is not all the way back to the 108.15, but has gotten to within 10 or so pips of the start point.
In other markets, they too are recovering some of their declines but price action remains volatile.
These event headlines matter and uncertainty matters too. We are reminded once again, the increased risks associated with both.