Short Term Outlook of FTSE China A50 Index Key Resistance Level at 13637
The China economy is affected by an outbreak of Coronavirus.....
Share this:
The China economy is affected by an outbreak of Coronavirus. The government announced that 1Q GDP dropped 6.8% on year (-6.0% expected) last week, recording the first contraction within 30 years. Besides, industrial production fell 1.1% in March (-6.2% expected) and retail sales declined 15.8% (-10.0% expected). In addition, China exports dropped 6.6% on year (-13.9% expected) and imports fell 0.9% (-9.8% expected). We can see that industrial production, exports and imports data for March are much better than the expectation. It suggests that China's trading and production activities do not look so bad.
On the other hand, a break above 13637 would indicate a breakout of the declining trend line and bring a stronger rebound to the second resistance level at 14198.
Source: GAIN Capital, TradingView
Secondly, China's economy is reopening as the new Coronaviurs infected cases in China are being low. The new cases of Coronavirus added less than 100 within this week. However, China still faces a challenge for weaker demand of the global economy as the number of new cases in the worldwide remains serious.
The investors should focus on official April manufacturing PMI (51.0 expected) and non-manufacturing PMI (50.5 expected) next week as the data could give an insight of the recent China economic performance.
From a technical point of review, the A50 Index would be bearish as the prices remain capped by a declining trend line drawn from January. The RSI stays around 50 and has not crossed above the previous high at 59, suggesting the lack of upward momentum for prices. Therefore, as long as 13637 (around the high of March 13) holds on the upside, the index prices would return to the overlap support base at 12416 and 12085 in extension.On the other hand, a break above 13637 would indicate a breakout of the declining trend line and bring a stronger rebound to the second resistance level at 14198.
Source: GAIN Capital, TradingView
The China economy is affected by an outbreak of Coronavirus. The government announced that 1Q GDP dropped 6.8% on year (-6.0% expected) last week, recording the first contraction within 30 years. Besides, industrial production fell 1.1% in March (-6.2% expected) and retail sales declined 15.8% (-10.0% expected). In addition, China exports dropped 6.6% on year (-13.9% expected) and imports fell 0.9% (-9.8% expected). We can see that industrial production, exports and imports data for March are much better than the expectation. It suggests that China's trading and production activities do not look so bad.
Secondly, China's economy is reopening as the new Coronaviurs infected cases in China are being low. The new cases of Coronavirus added less than 100 within this week. However, China still faces a challenge for weaker demand of the global economy as the number of new cases in the worldwide remains serious.
The investors should focus on official April manufacturing PMI (51.0 expected) and non-manufacturing PMI (50.5 expected) next week as the data could give an insight of the recent China economic performance.
From a technical point of review, the A50 Index would be bearish as the prices remain capped by a declining trend line drawn from January. The RSI stays around 50 and has not crossed above the previous high at 59, suggesting the lack of upward momentum for prices. Therefore, as long as 13637 (around the high of March 13) holds on the upside, the index prices would return to the overlap support base at 12416 and 12085 in extension.
On the other hand, a break above 13637 would indicate a breakout of the declining trend line and bring a stronger rebound to the second resistance level at 14198.
Source: GAIN Capital, TradingView
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: SPX Continues to Drift Away from Record Highs
Recent trading sessions have done little to restore confidence in the equity market. Over the last four sessions, the S&P 500 has declined by nearly 1.00%, a move that highlights growing short-term weakness and keeps the index moving further away from its record-high territory.
RBA delivers 25bp hike, Bullock now the main event
The RBA delivered the expected 25bp hike, but Bullock’s press conference now looms as the bigger volatility risk for AUD/USD and the ASX 200.
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.
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.