What Happened
Rabobank’s Global Strategist Michael Every flagged that US-China talks — including a potential Trump visit to Beijing — are driving renewed uncertainty across global markets. Speculation around a so-called “Grand Bargain” between the two superpowers is lifting risk appetite selectively, while China’s leverage over Iran adds another layer of geopolitical complexity. The yuan is also being pushed as part of the broader negotiation dynamic, with implications for commodities priced in USD.
Key Levels to Watch
ASX 200: Support sits at 7,980 and 7,850. Resistance is at 8,120 and 8,250. Any positive US-China headline could push the index toward the upper resistance zone.
Iron Ore (SGX futures): Current support at $98/tonne and $94/tonne. Resistance at $104/tonne and $110/tonne. A trade deal or tariff rollback would be a direct catalyst for a move higher.
Gold (XAU/USD): Support at $3,180 and $3,120. Resistance at $3,280 and $3,350. A stronger yuan or reduced safe-haven demand from a US-China détente could pressure gold lower.
Technical Picture
The ASX 200 remains in a medium-term uptrend above its 50-day moving average (~7,920), but momentum has stalled near the 8,100 resistance zone. RSI sits around 55 — neither overbought nor oversold — suggesting the index is coiling ahead of a catalyst. Iron ore has been range-bound for three weeks, reflecting uncertainty rather than conviction. Gold’s RSI has pulled back from overbought territory (above 70) to a neutral 58, suggesting the safe-haven premium is slowly deflating.
What Traders Are Watching
- Any confirmed US-China meeting or joint communiqué — bullish for BHP, RIO and the broader ASX
- Yuan movement: a stronger yuan (below 7.20 vs USD) would support iron ore and base metals
- Gold breaking below $3,180 would signal safe-haven unwinding and risk-on rotation
- BHP above $44.50 and RIO above $120.00 would confirm a materials sector breakout
Bias
Cautiously Bullish — ASX Materials & Iron Ore. If US-China talks produce even a modest framework agreement, Australian resource stocks stand to be the clearest beneficiaries. However, the “Grand Bargain” remains speculative, so position sizing matters.
Source: Read original article