A50 Index Focus on the Declining Trend Line
The A50 Index has rebounded around 13% from the March on the hope of economic recovery after the COVID-19 outbreak....
Share this:
The A50 Index has rebounded around 13% from the March on the hope of economic recovery after the COVID-19 outbreak.
Last week, China's CPI grew 3.3% on year in April, worse than the expectation of the increase of 3.7%, compared with the growth of4.3% in March, according to the government. In the below chart, the growth of CPI is slower since February, but has not reversed up.
Source: Trading Economic
On the other hand, China's industrial production rose 3.9% on year in April, better than the expectation of an increase of +1.5%. In the below chart, the industrial production data has reversed up since March and returned to the positive in recent data. It indicates that the industrial activities are recovering in China.
Source: Trading Economic
On a daily chart, the index prices remain capped by a declining trend line drawn from January top, indicating a bearish outlook. However, the index stays above both rising 20-day and 50-days moving averages, which suggests a positive bias. As the technical views are mixed, it is better to stay at neutral bias.
On the upside, only a break above 13720 (the high of May 11) would validate a bullish breakout of declining trend line and call for a rise to the resistance level at 14250 (the high of March).
On the downside, a break below the previous low at 12800 would violate the higher tops and higher bottoms pattern and bring a return to 12390 (the low of April).
Source: GainCapital, TradingView
Last week, China's CPI grew 3.3% on year in April, worse than the expectation of the increase of 3.7%, compared with the growth of4.3% in March, according to the government. In the below chart, the growth of CPI is slower since February, but has not reversed up.
Source: Trading Economic
On the other hand, China's industrial production rose 3.9% on year in April, better than the expectation of an increase of +1.5%. In the below chart, the industrial production data has reversed up since March and returned to the positive in recent data. It indicates that the industrial activities are recovering in China.
Source: Trading Economic
On a daily chart, the index prices remain capped by a declining trend line drawn from January top, indicating a bearish outlook. However, the index stays above both rising 20-day and 50-days moving averages, which suggests a positive bias. As the technical views are mixed, it is better to stay at neutral bias.
On the upside, only a break above 13720 (the high of May 11) would validate a bullish breakout of declining trend line and call for a rise to the resistance level at 14250 (the high of March).
On the downside, a break below the previous low at 12800 would violate the higher tops and higher bottoms pattern and bring a return to 12390 (the low of April).
Source: GainCapital, TradingView
The A50 Index has rebounded around 13% from the March on the hope of economic recovery after the COVID-19 outbreak.
Last week, China's CPI grew 3.3% on year in April, worse than the expectation of the increase of 3.7%, compared with the growth of4.3% in March, according to the government. In the below chart, the growth of CPI is slower since February, but has not reversed up.
Source: Trading Economic
On the other hand, China's industrial production rose 3.9% on year in April, better than the expectation of an increase of +1.5%. In the below chart, the industrial production data has reversed up since March and returned to the positive in recent data. It indicates that the industrial activities are recovering in China.
Source: Trading Economic
On a daily chart, the index prices remain capped by a declining trend line drawn from January top, indicating a bearish outlook. However, the index stays above both rising 20-day and 50-days moving averages, which suggests a positive bias. As the technical views are mixed, it is better to stay at neutral bias.
On the upside, only a break above 13720 (the high of May 11) would validate a bullish breakout of declining trend line and call for a rise to the resistance level at 14250 (the high of March).
On the downside, a break below the previous low at 12800 would violate the higher tops and higher bottoms pattern and bring a return to 12390 (the low of April).
Source: GainCapital, TradingView
Last week, China's CPI grew 3.3% on year in April, worse than the expectation of the increase of 3.7%, compared with the growth of4.3% in March, according to the government. In the below chart, the growth of CPI is slower since February, but has not reversed up.
Source: Trading Economic
On the other hand, China's industrial production rose 3.9% on year in April, better than the expectation of an increase of +1.5%. In the below chart, the industrial production data has reversed up since March and returned to the positive in recent data. It indicates that the industrial activities are recovering in China.
Source: Trading Economic
On a daily chart, the index prices remain capped by a declining trend line drawn from January top, indicating a bearish outlook. However, the index stays above both rising 20-day and 50-days moving averages, which suggests a positive bias. As the technical views are mixed, it is better to stay at neutral bias.
On the upside, only a break above 13720 (the high of May 11) would validate a bullish breakout of declining trend line and call for a rise to the resistance level at 14250 (the high of March).
On the downside, a break below the previous low at 12800 would violate the higher tops and higher bottoms pattern and bring a return to 12390 (the low of April).
Source: GainCapital, TradingView
Latest market news
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
S&P 500 forecast: Stocks extend drop as correction risks grow
US and global equity markets have extended Wednesday’s sell-off, with Wall Street opening lower after a weak handover from Asia and Europe. The deterioration in risk appetite has been spreading across global markets. The dollar was firmer, Treasury yields were holding onto yesterday’s gains, while gold, silver and bitcoin were all under pressure alongside equities and major currencies.
ASX 200 Rebound Stalls Despite Wall Street Surge
The ASX 200 rebound is struggling for traction despite a powerful Wall Street rally, leaving 8800 resistance and downside risks in focus.
Nikkei threatens breakout as tech rebound broadens
Breakouts across the SOX and Nasdaq are being matched by rebounds across Asia, with the Nikkei now threatening to join the move.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.