ASX 200, Hang Seng, Nikkei 225 Futures: Bull Rallies Face Resistance

Asian equity markets remain technically in bull territory, with strong gains from April lows across the ASX 200, Hang Seng, and Nikkei 225. Yet while all three indices have outperformed in recent weeks, signs of momentum divergence are emerging. The ASX 200 is stalling just shy of record highs, the Nikkei 225 appears to be coiling within a continuation pattern, and the Hang Seng is leading the charge with a cleaner bullish breakout. As key macro data from China, Japan, and Australia cross the wires, traders should stay alert for signs of consolidation or breakout extensions across regional markets.

View related analysis:

ASX 200 Futures (SPI 200) Technical Analysis

While the ASX 200’s rally from the April low to recent highs is an impressive 19.7%, it still falls just short of the technical 20% threshold that defines a bull market. And if we measure it on a daily-close basis — as is typically done — the gain is reduced to 16.8%. Still, the move is close enough to suggest that ASX bulls are eyeing another run at the February record high of 8,631. That said, a pullback may be due first.

ASX 200 outlook remains constructive, but momentum is clearly slowing. The daily chart shows prices trading in a tight range and struggling to test 8,590, with a bearish divergence on the RSI (2) and a minor one on the RSI (14) within overbought territory. Higher wicks have also formed throughout the range, suggesting bulls are not yet ready to break the ASX 200 higher.

The 1-hour chart reveals a sideways range with a high-volume node (HVN) at 8,554. This could initially provide support, though a break beneath it may open the door to a fall towards the lower bound of the range around 8,530. A break beneath the 8,525 low would suggest a deeper pullback toward the 8,500 handle or the 8,486 VPOC (volume point of control).

Hang Seng Outlook: Rally Outpaces ASX 200 as 24,500 Comes Into Focus

Meanwhile, the Hang Seng entered a technical bull market three weeks ago. Its rally from the April low now stands at 27.8%, making the Hang Seng the outperformer relative to the ASX 200.

Its trend structure also appears more conducive to further gains. Prices broke above a retracement line last Wednesday, and bullish momentum delivered a decisive close above the 23,770 high on Monday. The 24,500 level is now likely in focus for bulls.

Take note of the weekly VPOC at 24,626 and the March high at 24,791, which could prompt a pullback. But overall, it looks like the Hang Seng may eventually break above the March high. Bulls could seek dips towards the 23,770 high.

Nikkei 225 Technical Analysis: Bull Market Holds, But Momentum Stalls

It was the Nikkei that first reached a technical bull market, crossing the 20% threshold over four weeks ago. Its high-to-close rally sits above 26%, though it’s now struggling to break to new highs — hinting at near-term weakness. That said, a potential continuation triangle could be forming, although it may also allow for a recycle or two lower before the trend resumes higher.

The high-volume node at 38,940 could serve as a near-term upside target for bulls, with a break above it bringing the 40,000 level into focus. But given the strength of the broader trend and signs of near-term weakness, bulls may want to seek dips while prices remain above the May low.

Economic Events in Focus (AEST / GMT+10)

09:01: GBP BRC Retail Sales Monitor (May) (GBP/USD, GBP/JPY, FTSE 100)
09:50: JPY M2 Money Stock, M3 Money Supply (USD/JPY, EUR/JPY, Nikkei 225)
10:30: AUD Westpac Consumer Sentiment (Jun) (AUD/USD, ASX 200)
11:30: AUD NAB Business Confidence, Business Survey (May) (AUD/USD, ASX 200)
16:00: GBP Average Earnings, Employment Data, Unemployment Rate (Apr/May) (GBP/USD, GBP/JPY, EUR/GBP, FTSE 100)
16:00: JPY Machine Tool Orders (May) (USD/JPY, Nikkei 225)
17:00: CHF SECO Consumer Climate (May) (USD/CHF, CHF/JPY, EUR/CHF)
18:30: EUR Sentix Investor Confidence (Jun) (EUR/USD, EUR/GBP, EUR/JPY, DAX)
20:00: USD NFIB Small Business Optimism (May) (USD, S&P 500, Nasdaq 100, Dow Jones)
02:00: USD EIA Short-Term Energy Outlook (USD, WTI Crude Oil, Natural Gas Futures)
03:00: USD 3-Year Note Auction (USD, US Treasury Yields)

View the full economic calendar

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

FOREX.com is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment and CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.forex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.forex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 42.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.

Delayed London Stock Exchange (LSE) Data

The London Stock Exchange (LSE) market data displayed or referenced on this website is provided on a delayed basis and is not in real time. The delay period may vary but is typically at least 15 minutes. This data is intended for information purposes only and should not be relied upon for trading, investment, or other financial decisions. We do not guarantee the completeness, reliability, or suitability of the data for any particular purpose. Users should consult real-time data sources and obtain professional advice before making any financial decisions.