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On January 28th, Westpac joined other major banks in predicting a 25 basis point rate hike by the Reserve Bank of Australia (RBA) at its February meeting. Westpac believes that persistently high inflation has cast a "decisive vote" for policy tightening, while maintaining its basic assessment that this rate hike will be a one-off move, not the start of a long-term rate hike cycle. Westpac argues that accurately identifying spare capacity in an economy nearing full employment and full capacity utilization is difficult. In this environment, inflation outcomes become the most reliable policy guide. The bank points out that underlying inflationary momentum is currently higher than the level needed for a smooth return to the RBAs 2-3% target range, leaving the RBA with little room to delay action. Nevertheless, Westpac does not expect automatic and continuous rate hikes. Current policy is considered to be at a restrictive level, and the remaining task of cooling inflation is relatively modest. The most likely outcome is a wait-and-see approach after February, while clearly conveying that the RBA is prepared to act again if inflation fails to slow as expected.January 28 – Following the completion of necessary internal procedures by both parties, the Hong Kong-Turkey Investment Promotion and Protection Agreement (Investment Agreement) will come into effect on February 4. According to the agreement, both governments commit to providing protections for each others investors, such as fair, equitable, and non-discriminatory treatment of their investments, compensation in the event of investment expropriation, and allowing the free transfer of investments and profits overseas. The agreement also stipulates that investment disputes can be resolved in accordance with internationally recognized rules, including arbitration. Hong Kongs Secretary for Commerce and Economic Development, Edward Yau, stated that by strengthening investment protections, the Investment Agreement will enhance investor confidence, expand investment flows between Hong Kong and Turkey, and benefit the economic development of both places.On January 28, the World Health Organization (WHO) responded to the recent Nipah virus outbreak in India, stating that a case of Nipah virus infection has been confirmed in West Bengal, eastern India. Since the case was reported, the WHO has maintained close communication with local health authorities, conducting risk assessments and providing technical support. Necessary resources, including laboratory support, have been mobilized, and enhanced surveillance and infection prevention measures have been implemented. Based on current information, the WHO assesses that the risk of further spread from these confirmed cases is low. The local authorities have the capacity to effectively manage such outbreaks, and local health teams are fully implementing the public health response measures recommended by the WHO. To date, there is no evidence of increased human-to-human transmission of the virus.On January 28th, Pang Xiaogang, Vice Chairman of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC), stated at a press conference held by the State Council Information Office that state-owned enterprises (SOEs) will further promote the "AI+" special action in the next step. First, they will strengthen investment-driven development. This includes planning the "15th Five-Year Plan" strategic plan for artificial intelligence for central SOEs, accelerating the construction and efficient utilization of information and communication networks, the national integrated computing power network, and domestic intelligent computing clusters, and promoting high-quality industrial development through effective investment. Second, they will deepen scenario cultivation. Focusing on key areas such as embodied intelligence and energy and power, they will explore the establishment of "AI+" industrial communities, increase the openness of scenarios, and create more comprehensive major scenarios, industry-integrated scenarios, and high-value niche scenarios. Third, they will optimize data supply. Under the premise of security and compliance, they will accelerate the open development of data resources in key areas such as transportation and logistics, smart energy, green and low-carbon development, and financial services, providing strong support for model optimization and iteration, intelligent computing facility construction and use, and large-scale application in industry scenarios.The Hang Seng Tech Index rose to 1%, while the Hang Seng Index is currently up 1.63%.

The Dollar Index's Top-to-Bottom Reversal Indicates a Potential Momentum Shift

Drake Hampton

Apr 11, 2022 10:52

On Friday, the US Dollar fell versus a basket of foreign currencies after gaining more than 100 points for the first time in over two years. It reached a high of 100.20 during the session, its highest level since May 2020.

 

Despite the fact that it formed a potentially bearish closing price reversal top, it ended the week up 1.3 percent. Throughout the week, the dollar index was mostly supported by a rise in US Treasury yields and a weaker Euro.

 

The June US Dollar Index closed at 99.753 on Friday, down 0.007 or -0.01 percent. The Invesco DB US Dollar Index Bullish Fund ETF (UUP) closed at $26.68, an increase of $0.01 or 0.02%.

 

On Friday, the US Treasury 10-year yield surpassed 2.7 percent for the first time in three years, aided by the likelihood of more aggressive Federal Reserve tightening. Additionally, this week's release of the Fed's March meeting minutes revealed that "many" members were prepared to raise rates in future months in 50-basis-point increments.

 

In other news, the Euro was under pressure as the election battle between President Emmanuel Macron and far-right contender Marine Le Pen tightened in France, the Euro Zone's second-largest economy. Macron continues to lead polls.

Technical Analysis of the Daily Swing Chart

According to the daily swing chart, the primary trend is upward. However, Friday's closing price reversal top implies that momentum is about to move downward.

 

A move above 99.745 will confirm the price reversal top at the close. This could initiate a 2-3 day adjustment. A break of 100.200 will invalidate the chart pattern and suggest the resumed uptrend. The primary trend will revert to the downside upon a break of 97.730.

 

Minor values range from 97.730 to 100.200. The nearest support level is at its 50% level, or pivot, of 98.965.

 

The critical support level is the long-term Fibonacci retracement level around 98.200.

Scenario of the Bear

Persistent movement below 99.975 indicates the existence of sellers. Taking out 99.745 will confirm the price reversal top at the close. If this generates sufficient downside momentum, expect the selling to extend towards the minor pivot at 98.965.

Scenario of Bullishness

Sustaining a move over 99.975 indicates the presence of buyers. The initial objective on the upside is 100.200.

 

If 100.200 is breached, the closing price reversal top will be invalidated, signaling the resumption of the uptrend. If buying is sufficiently strong, we may see an acceleration to the upside, with the next big objective of 100.560 – 100.930.

 

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