Forex today witnessed softer risk tones following Friday’s stand-off between the US and China on the trade talks and weekend’s tweets from the US President Trump that escalated trade war risks. The safe-haven Yen reversed Friday’s corrective slide against its American peer, sending USD/JPY to 109.60 lows before recovering to 109.75 region. Meanwhile, the risk currencies and the Chinese proxies, the Antipodeans, suffered losses in tandem with the Chinese Yuan, as escalating trade war fears knocked-off the Chinese 10-year yields to monthly lows. The Aussie was the main laggard and eyed 4-month troughs near 0.6560 region amid risk-aversion and increased RBA rate cut bets following dismal Australian home loans data release. The Kiwi remained on the offers below the 0.66 handle, down nearly -0.25% so far. The oil-linked Loonie traded weaker near 1.3440 levels, as both the crude benchmarks struggled to extend their recovery mode. Amongst the European currencies, the EUR/USD pair traded in a tight range below the 1.1250 level amid subdued gold prices, as trade tensions weighed. The Cable remained better bid around the 1.30 handle despite the renewed Brexit jitters and negative risk sentiment. Main Topics in Asia US-China trade updates China unveils its demand for ‘equality and dignity’ China will never concede on `issues of principle’ – Global Times / Trump: We are right where we want to be with China Beijing vows retaliation on US trade – People’s Daily Trump-Xi trade talks likely at G20 summit, says U.S. – FT USD/CNH technical analysis: Prints highest level since January 3 with RSI at 10-month high China’s 10-year bond yield hits one-month lows China should hit back smartly at US – Global Times China’s door to talks with US on trade always open – People’s Daily Other Headlines UK PM May: Pull plug on Brexit talks with labour – Times S. Korean FinMin Dong-yeon: Will act to stabilize markets if volatility increases Brent technical analysis: Struggle for strong bounce from 50-day MA support continues Saudi OilMin Al-Falih: Attack on two Saudi vessels targeted security of oil supply US Sec of State Pompeo: Will hold talks in Brussels on Monday on Iran before heading to Sochi Australian opposition holds slim lead over Govt ahead of May 18 election – The Newspoll Key Focus Ahead Following plenty of US-China trade war-related headlines over the weekend, the EUR, GBP traders are poised for a quiet start to the new week. Both the EUR and NA calendar remain data-dry for today, with the US-China trade developments induced risk-on/off sentiment and USD dynamics to remain the main market drivers. Meanwhile, the ongoing uncertainty around the Brexit deal and PM May’s resignation will also continue to weigh on the investors’ sentiment. In absence of any economic releases, markets will closely hear the speeches by the RBA Assistant Governor Debelle (due at 0700 GMT) and FOMC Vice President Clarida (due at 1310 GMT) for fresh trading impulse. EUR/USD has crossed key hurdle, focus on trade tensions EUR/USD has violated key descending trendline, but the 50-day moving average (MA) at 1.1249 may prove a tough nut to crack amid trade tensions. GBP/USD trades around 100-day MA, Brexit angst may cap gains The spot has been able to post marginal gains despite escalating US-China trade tensions and the resulting risk aversion. The gains, however, could be erased in the European session, courtesy of Brexit uncertainty. Gold Technical Analysis: Bulls still need a close above 1298 to negate the bearish bias The price struggles at trendline resistance that meets a prior major support level that now acts as resistance. Bulls still need a close above 1298 to negate the bearish bias. China’s Options A breakdown in the trade talks with the promise of a long and painful bout of tariffs and export shrinkage might well drive the Shanghai Composite back to the range of 2013 and 2014. Trade, the Dollar, and the Week Ahead Next week’s US economic highlight include April retail sales and industrial output figures. Consumption is likely to slow from March’s heady 1.6% headline. Half that strength in April would still be seen as strong. FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next US Dollar Index struggles for direction near 97.30 FX Street 3 years Forex today witnessed softer risk tones following Friday's stand-off between the US and China on the trade talks and weekend's tweets from the US President Trump that escalated trade war risks. The safe-haven Yen reversed Friday's corrective slide against its American peer, sending USD/JPY to 109.60 lows before recovering to 109.75 region. Meanwhile, the risk currencies and the Chinese proxies, the Antipodeans, suffered losses in tandem with the Chinese Yuan, as escalating trade war fears knocked-off the Chinese 10-year yields to monthly lows. 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