Futures on the SP500 index were trading 1.4% lower during the morning session on Tuesday and the index was seen hovering around 2,735 USD after another risk-off wave has hit the markets.
Earlier in the day, Donald Trump directed the U.S. Trade Representative to identify 200 billion USD worth of China goods for additional 10% tariffs.
“Further action must be taken to encourage China to change its unfair practices, open its market to United States goods and accept a more balanced trade relationship with the United States,” Trump said in a statement.
The trade wars have begun and China immediately pledged to take strong measures, should the US continue to place tariffs on new list of goods.
The index is now testing the first major support of previous highs, which is located near 2,740 USD. If bears will be stronger further, the price could decline to previous lows near 2,700 USD, where the 100 day moving average is also seen.
On the upside, should the dip be bought later in the day, which is the usual tactic, the first resistance is now at 2,750 USD and afterward around 2,760 USD. In all cases we strongly recommend to have rigorous money and risk management.
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