The thing about all of this is that with each passing day, market players will really have to think about the ramifications of all these tariffs and restrictions. It is clear that all of this is going to have a negative impact on the global economy. But I reckon there is still some quarter in the market that is hoping that things don't go too far, so as to not worry about thinking at all.
I will admit that I myself may not even have a full grasp of the extent of the pain this could have on the global economy. But it's all about reading sentiment when it comes to trading, and I would argue that you can't just ignore the economic pain and fallout from the trade war even if things do not get much worse. Because at present, it is already bad enough.
Taking that into consideration, I'll go back to the question that needs to be asked at this stage. Are we shifting more to a risk landscape of selling on rallies rather than buying on dips? Perhaps. With every day that passes, we are moving one step closer. At least until the turbulence goes away and we have more clarity on the damage that is done.
This article was written by Justin Low at www.forexlive.com. Read More Details
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