Technical Analyst, Saxo Bank
Hang Seng Index was rejected at the 55 daily Moving Average after retracing approx. 50% of the January – March downtrend.
RSI rejected at 60 threshold i.e., still in a negative sentiment. Hang Seng is set to resume downtrend. A downtrend where key support at around 18,814 could be tested.
For Hang Seng to reverse this scenario and build an uptrend a close above 21K is needed
FTSE China A50 future has retraced almost 0.382 of the downtrend after breaking bullish out of the falling Wedge like pattern. The bounce seems to be coming to an end however, with RSI so far failing to close above 60.
Strong key resistance at around 13,651
If A50 breaks below its very short-term rising trend line to close below 13,154 bear trend has resumed with a test of support at around 12,800 likely to follow.
A close below 12,800 a move to the 0.618 retracement at 12,415 is in the cards
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.