Technical Analyst, Saxo Bank
Summary: ASX 200 fast approaching all -time high. Likely to take it out
Hang Seng nearing strong resistance at 22,500
China A50 uptrend getting stretched but could continue
S&P ASX200 has broken above 7,375 and is set for a test of the previous high at around 7,633. A close above could give energy to even higher levels for ASX. 2.0 Fibonacci projection of the latest correction gives a potential target around 7,845 in same area as the 2.0 projection of the double bottom like formation potential in Q2-Q4 2022 illustrated by the two vertical arrows.
To reverse the medium-term bullish scenario a close below 6,900 is needed.
Hang Seng Index is fast approaching strong resistance at around 22,500. A correction should be expected from that level.
However, a correction could be short and swift. Hang Seng is in a bullish uptrend that could take the index to close to 25K where next strong resistance is and the 0.618 Fibonacci retracement at 24,847.
For Hang Seng to reverse the medium-term uptrend a close below 18,885 is needed. Short-term the key not to be broken is support at 19,303.
FTSE China A50 future was rejected at the 0.786 retracement at 14,190. The A50 is still trading in a rising channel pattern and could perform a minor correction down to test the lower rising trendline possibly also the 13,500 level.
But RSI is bullish indicating higher levels are likely. If A50 can push above 14,190 July 2022 peak at around 15,015 could be reached.
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.