{"id":6254,"date":"2024-10-21T13:37:51","date_gmt":"2024-10-21T13:37:51","guid":{"rendered":"https:\/\/alchemymarkets.com\/?post_type=market_insights&#038;p=6254"},"modified":"2025-05-13T08:19:37","modified_gmt":"2025-05-13T08:19:37","slug":"hsi-oct-2024","status":"publish","type":"market_insights","link":"https:\/\/alchemymarkets.com\/sv\/education\/market-insights\/chart-of-the-day\/hsi-oct-2024\/","title":{"rendered":"China Cuts Rates: Potential Bounce on Hang Seng Index"},"content":{"rendered":"\n<p>On October 21st, the People\u2019s Bank of China announced a 0.25% cut on their 1Y Loan Prime Rate, and a 0.05% cut on the 5Y Loan Prime Rate. These cuts in the short term interest rates are meant to bolster the Chinese economy and give businesses more funds to sustain themselves.<\/p>\n\n\n\n<p>With this in mind, the Hang Seng Index is technically overbought, and could see a retracement to lower levels at approximately $19,706 HKD.<\/p>\n\n\n\n<p>But, fundamentally, the HSI should be bullish due to these rate cuts \u2013 so, in the event that HSI will bounce; where will the targets be?<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Technical Analysis on the Hang Seng Index<\/h2>\n\n\n\n<p>The HSI could potentially be in a rising parallel channel on the weekly timeframe. As the price is retracing, traders should be mindful of the pivot high formed during May 2024, and the 0.618 Fibonacci level.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"597\" src=\"https:\/\/alchemymarkets.com\/wp-content\/uploads\/2024\/10\/HSI_2024-10-21_18-38-18-1024x597.png\" alt=\"\" class=\"wp-image-6257\" srcset=\"https:\/\/alchemymarkets.com\/wp-content\/uploads\/2024\/10\/HSI_2024-10-21_18-38-18-1024x597.png 1024w, https:\/\/alchemymarkets.com\/wp-content\/uploads\/2024\/10\/HSI_2024-10-21_18-38-18-300x175.png 300w, https:\/\/alchemymarkets.com\/wp-content\/uploads\/2024\/10\/HSI_2024-10-21_18-38-18-768x447.png 768w, https:\/\/alchemymarkets.com\/wp-content\/uploads\/2024\/10\/HSI_2024-10-21_18-38-18.png 1483w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>Additionally, a quick glance at the weekly EMA 20 and EMA 50 tells us that a definitive EMA Cross has occurred \u2013 which hints at a bullish trend emerging. That being said, a bullish close above the January 2023 Highs at $22,700.85 HKD is absolutely required for the HSI to convincingly flip bullish.<\/p>\n\n\n\n<p>If the price does retrace, here are the levels to view:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>May 2024 High<\/strong> at $19,706.12<\/li>\n\n\n\n<li><strong>0.618 Fibonacci Retracement<\/strong> at $19,379.76, aligns closely with Weekly EMA 20<\/li>\n\n\n\n<li><strong>0.786 Fibonacci Retracement <\/strong>at $18,317.45, aligns with Weekly EMA 50<\/li>\n\n\n\n<li><strong>Bottom of the Parallel Channel <\/strong>at approximately $15,500 to $14,800 HKD<\/li>\n<\/ul>\n\n\n\n<p>If the price of HSI does rise from here, or bounce at the aforementioned levels, we should be mindful of various resistances above:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>January 2023 High<\/strong> at $22,700.85 (Could create a double top)<\/li>\n\n\n\n<li><strong>Top of Parallel Channel <\/strong>at approximately $23,500 HKD<\/li>\n\n\n\n<li><strong>0.618 Fibonacci Retracement<\/strong> at $24,922 HKD<\/li>\n\n\n\n<li><strong>Bearish Market Gap from July 2021 <\/strong>from approx. $26,750 to $27,000 HKD<\/li>\n\n\n\n<li><strong>0.786 Fibonacci Retracement<\/strong> at $27,676 HKD<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Event of Collapse \u2013 Global Implications<\/h2>\n\n\n\n<p>In the event the HSI does collapse, it could indicate that despite the rate cuts, the confidence in the Chinese economy is simply too weak.<\/p>\n\n\n\n<p>This would send ripples throughout the global economy, affecting the S&amp;P 500, Nasdaq, and potentially oil and metal prices \u2013 as the Chinese economy is a huge consumer of these natural resources.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\" \/>\n\n\n\n<p><strong>You may also be interested in:<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-embed aligncenter is-type-wp-embed is-provider-alchemy-markets wp-block-embed-alchemy-markets\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"wp-embedded-content\" data-secret=\"eU7YNi8Dvc\"><a href=\"https:\/\/alchemymarkets.com\/education\/market-insights\/weekly-outlook\/a-packed-earnings-week-and-major-central-bank-decision-looms\/\">A Packed Earnings Week and Major Central Bank Decision Looms<\/a><\/blockquote><iframe loading=\"lazy\" class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; visibility: hidden;\" title=\"&#8220;A Packed Earnings Week and Major Central Bank Decision Looms&#8221; &#8212; Alchemy Markets\" src=\"https:\/\/alchemymarkets.com\/education\/market-insights\/weekly-outlook\/a-packed-earnings-week-and-major-central-bank-decision-looms\/embed\/#?secret=HCoGXMCN2E#?secret=eU7YNi8Dvc\" data-secret=\"eU7YNi8Dvc\" width=\"500\" height=\"282\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe>\n<\/div><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>As of UTC 1:00AM today, the People\u2019s Bank of China has announced a cut on their 1Y and 5Y Loan Prime Rates, as a method of revitalising the Chinese economy. How will this cut affect the Hang Seng Index?<\/p>\n","protected":false},"author":159,"featured_media":6255,"parent":0,"comment_status":"closed","ping_status":"closed","template":"","market_insights_categories":[18],"class_list":["post-6254","market_insights","type-market_insights","status-publish","has-post-thumbnail","hentry","market_insights_categories-chart-of-the-day"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>China Cuts Rates: Potential Bounce on Hang Seng Index - Alchemy Markets<\/title>\n<meta name=\"description\" content=\"The People\u2019s Bank of China has announced a cut on their 1Y and 5Y Loan Prime Rates. 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