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In this comprehensive analysis, Ultima Markets brings you an insightful breakdown of the China A50 for OCT 10th, 2024.
Key Takeaways
China will continue to stimulate the economy: the central bank and the Ministry of Finance have established a joint working group on the sale of treasury bonds. The Ministry of Finance will introduce the situation of increasing the countercyclical adjustment of fiscal policy on October 12.
US inflation affects market sentiment: Today, the United States released the unadjusted CPI data for September. The annual rate of CPI is expected to be 2.3%, and the previous value is 2.50%. Traders are not fully pricing in a 25-basis point rate cut. If inflation is as strong as the job market, the probability of a rate cut in the United States this year will continue to decrease, and the strong position of the US dollar may affect the risk appetite of the global market.
Stochastic oscillator: The indicator sends a short signal in the oversold area, and then the fast and slow lines quickly turn downward, suggesting that the bullish sentiment will subside in the short term, and the current trend is mainly a correction.
Fibonacci retracement level: The sentiment of the surge has begun to subside, and the current decline is prioritized as an adjustment structure. Investors need to pay attention to the 61.8% Fibonacci retracement level of the previous upward trend, which is also near the very critical 850-day MA.
850-day MA: According to the Kondratieff cycle theory, 850 days, or nearly 2 and a half years, is a small economic cycle. After the index breaks through this MA strongly, you can pay attention to the price behavior near the subsequent MA. Investors can only pay attention to the long-term bullish trend of the A50 index after waiting for the index to completely stand above the 850-day MA.
H1 Chart Insights
(China A50 Daily H1 Chart, Source: Trading View)
Stochastic oscillator: The indicator sent a bullish signal in the oversold area yesterday and formed a bottom divergence structure with the market price. Although it fell again afterwards, the second bullish signal made it clear that the bearish sentiment has eased.
False breakout: After forming a bottom divergence pattern yesterday, the index broke down falsely and then rose, destroying the current downward trend line. There is a certain probability that the current downward adjustment has ended, but it still needs to break through the long-short conversion line of 14130 to confirm. If the index continues to fall, pay attention to the price behavior near the fair value gap below.
Pivot Indicator
(China A50 M30 Price Chart, Source: Trading View)
According to the Ultima Markets APP, the central price of the day is established at 13477.50,
Bullish Scenario: Bullish sentiment prevails above 13477.50, first target 13880, second target 14180;
Bearish Outlook: In a bearish scenario below 13477.50, first target 13417, second target 13315.
Conclusion
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