[ad_1]
- The Hong Kong Hang Seng initially dropped just a bit during the session on Wednesday but continues to see buyers on did says it looks like the China reopening trade is starting to truly take hold.
- The HK$22,500 level continues to be an area that people are watching, and if we can break above there then it’s likely that we go much higher. In that environment, I fully anticipate that we could really take off, perhaps aiming toward the $25,000 Hong Kong level initially, and then perhaps even higher than that given enough time.
- After all, we have seen the market you straight up in the air, and of course, we pad the 50-Day EMA break above the 200-Day EMA indicator, firing off the “golden cross.”
On the other hand, if we break down below the HK$21,000 level, then it’s likely that we will test those moving averages for some type of support, and of course, that does make quite a bit of sense considering that it would be right at the HK$20,000 level, an area that obviously would have a lot of psychology attached to it.
Looking to Keep Buying on Dips
Either way, I think you have to look at that through the prism of the “risk on/risk off” scenario, as although Hong Kong itself isn’t necessarily that important, a lot of the Chinese mainland shares are traded on this exchange. As long as there is a feel-good story when it comes to China, there will be a feel-good story when it comes to Hong Kong.
If we were to break down below the HK$20,000 level, that would be very negative, opening up a massive flush lower. I don’t expect that to happen anytime soon, but it is something that you need to keep in the back of your mind. Buying on dips has worked for a while, and I suspect that will probably continue to be the case. However, you should also keep in mind that the Hong Kong Monetary Authority bases its monetary policy directly on the Federal Reserve, so Jerome Powell’s statement and reaction to his babbling will certainly be important as to where we go next. The Hong Kong dollar being pegged to the US dollar is sometimes a good thing, but then again sometimes it’s a bad thing as the HKMA does not make its own monetary policy.
Ready to trade our Forex daily forecast? We’ve shortlisted the best Forex brokers in the industry for you.
[ad_2]