The Hang Seng Index has reacted positively following the People's Bank of China's (PBoC) announcement of new easing measures. This development came alongside strong economic indicators, notably Retail Sales and Industrial Production, both surpassing expectations significantly. These factors could attract dip-buyers to re-enter the market following the substantial correction witnessed last week.
On the daily chart, the Hang Seng Index demonstrates a bounce around the 20,000 level, supported by the 50% retracement level. The price zone between 19,600 and 20,000 has emerged as a robust support area for buyers, making it a focal point for those anticipating a new cycle high. Conversely, sellers are likely eyeing a break below this support area to amplify bearish sentiment and drive the index down towards the 18,200 level.
Analyzing the 4-hour chart, the recent bounce is more discernible, spurred by the freshly introduced Chinese easing measures. For upward momentum to persist, buyers need to target the swing level at 21,635. A breakout above this point could galvanize bullish positions and push the index towards new highs. Sellers, meanwhile, might find an opportunity to counter at this swing level, aiming for a corrective drop back towards the 20,000 support zone.
On an even more granular view, the 1-hour chart reveals a breakthrough in the minor downward trend observed earlier today. This is a potential indicator of shifting momentum. Despite a price rally reaching the top of today’s average daily range, further gains may be limited in the immediate term. Buyers would gain confidence if the price ascends beyond the 20,781 mark, allowing them to aim for new highs. Meanwhile, sellers are likely positioning themselves around this level anticipating a downturn back into the 20,000 support zone.
Overall, the market is finely poised with significant potential influence from both recent Chinese economic policies and strong macroeconomic performance. Defining levels of support and resistance will be crucial for market participants moving forward. Both bulls and bears have defined targets and will be closely monitoring these levels for strategic positioning.
