Futures on HSCEI Index (CHN.cash) trimmed loses today by almost 2%, now losing -0.8%, but the Chinese benchmark felt well below SMA200 support zone at 59450 and the index is still traded below it.
- If bulls will fail to rebound above 6000 points, other significant technical support zones are near 5700 and 5500 points, where we can see 61.8 and 71.6 Fibonacci retracement levels of the upward wave started January 2024.
- Dropping below 5500 level may signal further, downward pressure below 5000 points, where we can see lows from the fall of 2022 and the beginning of the 2024 year.
- However, we can see that today correction in the Chinese stock market was a little lower than market downturn on Wall Street or among Japanese equities.
- We can assume that, weak sentiments were seen on the Chinese exchanges also last weeks, so today declines didn't have as much 'surprise' effect and wasn't triggered by any significant situation on Chinese market directly.
- On the other hand, potential recession in European and US market would have very high consequences for Chinese exporters and also local market valuations. The US is still the biggest China trade partner, so any short or medium-term economic slowdown would have numerous negative consequences.
CHN.cash (D1 interval)
Source: xStation5
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