Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
Technical Analyst, Saxo Bank Group
Hang Seng Index is showing divergence on daily RSI indicating a weakening of the downtrend. If Hang Seng closes above 17,080 a nice little rebound to 17,682-18.000 could be seen. That means the gap will be closed and further upside will be likely.
However, the upper trendline in the short-term falling channel could become a bit of a struggle to break. If HSI does break above the short-term falling trendline there is resistance at the upper falling trendline (dark blue) and 18,235.
China A50 Index future has been in a falling trend after peaking in 2021 peak but now seems to have found support at 12,294. Divergence on weekly RSI indicates China A50 is in for a rebound possibly to test its falling (black) trendline.
If the Index closes above its falling trendline resistance at 15,015 could be tested. If A50 closes above, it has confirmed a double bottom pattern with potential up to around 17K
Short-term A50 has formed a falling channel pattern. Rebounding from support it is likely to test its upper falling trendline, but the Index future needs to close above 13,502 to gain further upside towards 14K
If A50 future drops below lows at 12,326 bear trend resumes which can take the future down to 2020 lows at 11,498.
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