Hong Kong Economy is influence by the performance of US dollar where Hong Kong dollar is pegged to US dollar, action by the US Central Bank Federal Reserve to loosen or tightening its monetary policy could see inflow or ouflow of funds from Hong Kong.
Hong Kong being a country 2 systems administration of China, had a world leading international financial hub centre is a gateway of the west and east,
The weakening of US dollar could see Hong Kong Dollar weakening and could invite fund inflows into Hang Seng pushing assets and equities price higher, higher inflationary pressure seen, Hong Kong tourism will see a boost as well.
Not forgetting Hong Kong/ Hang Seng is influence by the Chinese economy as well, for they are one country 2 systems, lsdt year trade war tensions had seen China Shanghai Stock Index correcting 32% from its recent high hence Hnag Seng is influence by the selloff as well correcting 26.7%, anything figures more than 20% plunge is consider a technical bear market.
Lets see if trade war tariffs is going to be worsen or going to be resolve a turnaround from the technical bear selloff of over 20% in Hang Seng.
Lets take a look at Hang Seng Chart.
Hang Seng 11.1.19
Hang Seng with Technical Analysis 11.1.19 Monthly Chart
Based on worldwide fund flow analysis, current maecro economic environment is bullish for commodities sector where worldwide govt is spending heavily on infrastruture to boost economy growth, US dollar weakening probably by US central Bank Federal Reserve gradually or pause hiking rates in year 2019 and beyond, High demand for Dr. Copper, Crude Oil (Wti) and increase activity in Baltic Dry Index (seafreight activity transporting commodities) Seaborn trade is booming not contracting by the trade war between US and China.
Technical Charts in Hang Seng is observe reaching 33484 in Jan 2018 as its latest all time high, a correction has seen taking place after trade war tensions in year 2018, from 33484 to 24540, 26.7% correction into technical bear market territory. 24540 support is seen holding with classical neckline in blue color. price is seen moving in a trajectory in a price channel between upper and lower band of Orange Color lines with Green color line as its median. Price is expected to reach the upper band of Orange color line in year 2019 and beyond.
Disclaimer: All news, information and charts shared is purely by my research and personal views only. This is not a trading recommendation or advice but on the basis of sharing information and educating the investment community. Different traders and investors adopt different trading strategies and risk management approach hence if in doubt please approach or seek clarifications with your Financial Adviser, Broker and Banker.
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