$EEM - Emerging Markets Under Pressure
As volatility has come back to the global markets with a vengeance, one headwind that continues to blow even stronger continues to be the US-China trade war. On August 2nd, the US unexpectedly imposed additional tariffs on Chinese goods, with the Chinese now threatening to retaliate in kind. As a result of this renewed volatility, Emerging Market stocks ($EEM) have been rattled heavily over the past few trading sessions.
On a technical basis, $EEM prices are below all three of its EMAs, with a death crosses forming on i) the 10-Day and 50 & 200-Day EMAs, and ii) the 50-Day EMA and the 200-Day EMA, something that has not been seen since May. Further, its RSI continues to fall, indicating that momentum is quickly increasing to the downside as global investors lose faith in Emerging Markets. Lastly, $EEM prices seem to to be in a downward trend since July 25th, with the EEM/SPY price ratio continuing its march lower, as global investors (continue to) invest in the US over Emerging Markets.
Given the increase in rhetoric between the two economic giants, Emerging Market stocks are currently under heavy bearish pressure, with no end in sight. If these pressures continue on the space, we see $EEM heading lower to $38.45 as its next stop.
On a technical basis, $EEM prices are below all three of its EMAs, with a death crosses forming on i) the 10-Day and 50 & 200-Day EMAs, and ii) the 50-Day EMA and the 200-Day EMA, something that has not been seen since May. Further, its RSI continues to fall, indicating that momentum is quickly increasing to the downside as global investors lose faith in Emerging Markets. Lastly, $EEM prices seem to to be in a downward trend since July 25th, with the EEM/SPY price ratio continuing its march lower, as global investors (continue to) invest in the US over Emerging Markets.
Given the increase in rhetoric between the two economic giants, Emerging Market stocks are currently under heavy bearish pressure, with no end in sight. If these pressures continue on the space, we see $EEM heading lower to $38.45 as its next stop.
