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 was rejected at the 55 daily Moving Average after retracing approx. 50% of the January – March downtrend.
RSI rejected at 60 threshold i.e., still in a negative sentiment. Hang Seng is set to resume downtrend. A downtrend where key support at around 18,814 could be tested.
For Hang Seng to reverse this scenario and build an uptrend a close above 21K is needed
FTSE China A50 future has retraced almost 0.382 of the downtrend after breaking bullish out of the falling Wedge like pattern. The bounce seems to be coming to an end however, with RSI so far failing to close above 60.
Strong key resistance at around 13,651
If A50 breaks below its very short-term rising trend line to close below 13,154 bear trend has resumed with a test of support at around 12,800 likely to follow.
A close below 12,800 a move to the 0.618 retracement at 12,415 is in the cards
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