Hang Seng Index Rebounds Sharply

* The China Stimulus plan boosts the Hang Seng Index to jump near 1000 points this week.

* German Factory Order came significantly higher at 8.9%, which fuels the euro.

* Gold and oil prices rose on the back of the easing dollar’s strength.

Fundamental Overview

The Hang Seng Index shows resilience for the second consecutive session, supported by the Chinese government directing its sovereign fund to stabilize domestic equity markets. In contrast, the U.S. equity market grapples with uncertainty amid perceptions of extended Fed tightening. 

The U.S. dollar pulls back from a three-month high, prompting a technical rebound in commodities like gold and oil. Traders await Chinese CPI and PPI readings, set to impact oil prices and Chinese equity indexes, shaping market sentiment in the dynamic global financial landscape.

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Current rate hike bets on 20th March Fed interest rate decision: 

Source: CME Fedwatch Tool

0 bps (65%) VS -25 bps (35%)  

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Economic Calendar

(MT4 System Time)

Source: MQL5  

Market Movements

DOLLAR_INDX, H4

The US dollar retraced slightly after reaching its highest point in nearly three months, propelled by robust economic data and a hawkish Federal Reserve stance on interest rates. Despite the technical corrections and profit-taking activities driving this retreat, there’s a notable shift in market sentiment regarding rate cuts. Traders now project a mere 19.5% chance of a cut in March, down from the earlier expectation of 68.1% at the year’s outset, as positive US economic performance may defer rate cuts, enhancing the dollar’s long-term appeal. 

The Dollar Index is currently trading lower post-retracement from the resistance level. The MACD signals increasing bearish momentum, and with the RSI at 53, there’s an indication that the index might continue its decline, particularly as the RSI retreats sharply from overbought territory

Resistance level: 104.60, 105.65

Support level: 103.85, 103.05

GOLD，H4

Gold prices stabilised after experiencing sharp declines in the past week, as the dollar’s rally paused for a technical correction. However, uncertainties linger regarding rising geopolitical tensions and the possibility of higher US interest rates, with markets even considering the Federal Reserve’s stance to remain static until June. Investors are advised to monitor gold’s resistance level at 2035, along with US economic data and geopolitical developments in the Middle East for trading signals.

Gold prices are trading higher while currently testing the resistance level. MACD has illustrated increasing bullish momentum, while RSI is at 51, suggesting the commodity might extend its gains after breakout since the RSI stays above the midline.

Resistance level: 2035.00, 2055.00

Support level: 2015.00,  1985.00

HK50, H4:

Chinese equity markets witnessed a remarkable rally, marking their most significant upturn in years. Sovereign wealth funds expressed their commitment to intensifying share purchases, responding to China’s ongoing stimulus measures aimed at bolstering the economy. This rally comes after a substantial $6.1 trillion market value erosion since the peak in February 2021. Central Huijin Investment, the equity arm of China Investment Corp, expanded its ETF holdings on mainland stock markets, supported by a statement from the China Securities Regulatory Commission endorsing such investment plans.

HK50 is trading higher while currently testing the resistance level. MACD has illustrated increasing bullish momentum, while RSI is at 61, suggesting the index might extend its gains after it successfully breakout since the RSI stays above the midline. 

Resistance level: 16270.00, 17180.00

Support level: 15485.00, 14945.00