Technical Analyst, Saxo Bank Group
ASX 200 seems to be running out of steam just short of resistance at around 7,592. A correction down to support at around 7,253 and the 55 daily SMA seems likely to unfold. However, a dip down to lower rising trendline and 0.681 retracement at 7,158 should not be ruled out.
However, the RSI is still showing positive sentiment and no divergence indicating higher levels in ASX 200 following a correction.
Weekly chart: ASX reached 1.382 projection of the December correction before selling hit.
If Buyers regain control and lift ASX above 7,568 all-time highs are likely to be tested and taken out.
Medium-term uptrend remains as long as ASX 200 does not close below 6,930
Hang Seng Index closed Friday spot on the support at 21,187. A break below is likely to fuel a sell-off down to next support around 20,185 possibly dipping down to the 200 daily SMA and the 0.382 retracement at around 19,605.
If Hang Seng manage to move higher instead, to close above 21,638 previous peak at 22,700 could be tested. FTSE China A50 is jumping around the support around 13,500. A tug of war between Bulls and Bears. IF Bulls manage to move the Future back above the lower rising trendline in the channel A50 broke bearish out of, the uptrend is likely to resume towards previous peaks.
The 200 and 55 SMA’s are providing support but a dip down to 0.382 retracement at 13,191 could be seen.
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.
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