Technical Analyst, Saxo Bank
Hang Seng Index closed Thursday above short-term falling trend line and back above 200 daily Moving Average and the 20,000 mark.
RSI has been showing divergence for quite some time indicating an exhaustion of the downtrend. Hang Seng seems set for a correction or trend reversal.
The Index has moved back in to the cloud and could bounce further to the 55 daily Moving Average but a bounce to the upper part of the cloud and the 0.618 retracement at 21,221 should not be ruled out. If that scenario plays out and Hang Seng closes above 21K a new uptrend is established.
If Hang Seng closes below 18,829 downtrend is resuming.
FTSE China A50 future is still trading in a falling channel like pattern but has bounced from support around 12,787. If A50 closes above the upper falling trendline could lead to a move to the lower cloud resistnace and resistance at around 13,651. A close above 13,651 will confirm uptrend towards January peak around 14,445.
However, if A50 fails to close above upper falling trendline the strong support at 12,787 could once again be challenged. A close below is likely to fuel a sell-off down 11,864 with some support at the 0.618 retracement at 12,415.
Japan 225 cfd is short-term very volatile and seems without clear direction. But looking at the bigger picture the it is still range bound between 25,500 and 28,500 in a more and more narrow range. Japan 225 has once again closed below medium-term falling trendline - weekly chart - and could drop to test the lower range. Break out of range is needed for direction.
A close above 28,720 could fuel a rally to strong resistance at around 31,000. 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.