Technical Analyst, Saxo Bank
Hang Seng has broken bearish out of its rising channel. The Index is likely to test the support at 20,697. A close below is likely to trigger a sell-off down to around 19,950-19,890.
RSI has broken its rising trend line and is close to test the 40 threshold. If RSI closes below 40 sentiment is negative supporting the bearish scenario that will play out if Hang Seng closes below 20,697
To reverse the bearish picture Hang Seng must close above 21,962 for a re-test of medium term (black) falling trend line.
The HK50 cfd/Hang Seng future has found support at the 0.50 retracement level at 20,778 after breaking short-term rising trend line.
If HK50 closes below 20,587 it is in a confirmed downtrend, likely supported by RSI closing below 40. RSI is still positive, however bouncing off the 40 threshold.
If HK50 breaks below 20,587 next support at around 19,864. To reverse the likely bearish outlook, a close above 22,030 is needed.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.