A50 Index: FTSE China A50 Adjusts Components, Several Track Stocks Moved Out due to Declining Market Capitalization

Summary:

On August 31, FTSE Russell released the FTSE China Index Series Quarterly Review in September 2022, announcing index review changes to a number of indices including the FTSE China 50 Index and the FTSE China A50 Index. The changes will officially take effect on September 19. In general, the logic of FTSE-related adjustments lies in market capitalization changes, which are strongly correlated with the staged stock price appearance of individual stocks.

SELL ChinaA50

Close Time

CLOSED

13405.00

Entry Price

13345.00

13455.00

12878.37 -26.00 -0.20%

600.0

Pips

Profit

13345.00

13344.90

Exit Price

13405.00

Entry Price

13455.00

Fundamentals

In order to ensure the accuracy of tracking the index, passive index funds usually complete the transfer of positions before the latest index components officially take effect. The latest date of transfer for the above-excluded stocks is September 16.

FTSE China A50 Index will include Yiwei Lithium Energy, PetroChina, and Shaanxi Coal Industry; remove Anhui Conch Cement, China Pacific Insurance, and Zhangzhou Pien Tze Huang Pharmaceutical. FTSE China A50 alternative stocks include Aier Eye, Guodian Nanrui, Poly Development, Sungrow Power, and Tianqi Lithium. The alternative list is effective immediately until the next quarterly constituent review, if one or more constituents are removed, the alternative stock is selected.

In general, the FTSE-related adjustment logic lies in the market value changes, which have a strong correlation with the staged stock price appearance of individual stocks. For example, in the first quarter of 2022, the Shaanxi Coal Industry, which is on the main line of "steady growth", saw an interval increase of 73.6% in the first half of the year, and as of August 31, the year-on-year increase was as high as 92.16%. This time Shaanxi Coal Industry was adjusted to be included in the FTSE China A50 index constituents. And the track stock Pien Tze Huang Pharmaceutical fell 30.89% in the year.

Technical Analysis

2.1 A50 Index Daily Chart

A50 Index: FTSE China A50 Adjusts Components, Several Track Stocks Moved Out due to Declining Market Capitalization_1

The sideways range is from 13520 to 13360, with support below the uptrend line since August 24, 2022.

2.2 A50 Index Hourly Chart

A50 Index: FTSE China A50 Adjusts Components, Several Track Stocks Moved Out due to Declining Market Capitalization_2

Strong support above the 55-day SMA is at 13440.

A50 Index: FTSE China A50 Adjusts Components, Several Track Stocks Moved Out due to Declining Market Capitalization_3

Long A50 Index (Short Term) at lows during the day.

Entry Price: 13405;

Take Profit: 13345;

Stop Loss: 13455.

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Samantha Luan

Summary:

Demand in Asia's largest manufacturing hubs slowed further in August. The data added a high uncertainty to the global economy, with the world's two largest economies heading in different directions and central bankers scrambling to raise interest rates and fight inflation. Many of China's regional trading partners have seen the negative impact of sluggish Chinese consumer demand through July export data, while Southeast Asian economies have shown some resilience. The release of the regional data comes after data released on Aug. 31 showed that manufacturing activity in China shrank for a second straight month in August. The official manufacturing PMI rose to 49.4 from 49 in July, as power shortages caused by a historic drought posed risks to producers.

SELL HongKong50

EXP

EXPIRED

19695.00

Entry Price

19500.00

19890.00

19466.25 +94.50 +0.49%

Pips

EXPIRED

19500.00

19527.30

Exit Price

19695.00

Entry Price

19890.00

Fundamentals

Demand in Asia's largest manufacturing hubs slowed further in August.

S&P Global data showed that Taiwan's Purchasing Managers' Index (PMI) fell to 42.7 from 44.6 in July, the lowest since May 2020; South Korea's PMI fell to 47.6 from 49.8, the lowest since July 2020. Japan's PMI weakened to 51.5 from 52.1.

The rest of Asia was mixed. Malaysia's PMI slipped to 50.3 from 50.6, while the Philippines, Indonesia and Thailand all rose. A reading below 50 indicates contraction, while a reading above 50 indicates expansion.

The data added a high uncertainty to the global economy, with the world's two largest economies heading in different directions and central bankers scrambling to raise interest rates and fight inflation. Many of China's regional trading partners have seen the negative impact of sluggish Chinese consumer demand through July export data, while Southeast Asian economies have shown some resilience.

The release of the regional data comes after data released on Aug. 31 showed that manufacturing activity in China shrank for a second straight month in August. The official manufacturing PMI rose to 49.4 from 49 in July, as power shortages caused by a historic drought posed risks to producers.

Technical Analysis

Daily Chart of Hang Seng Index

Hang Seng Index: Purchasing Managers' Index of Asia's Major Manufacturing Hubs Slump in August amid Sluggish Demand_1

The sideways range is from 19515 to 19235, with the support of the upward trendline below since August 24, 2022.

Hourly Chart of Hang Seng Index

Hang Seng Index: Purchasing Managers' Index of Asia's Major Manufacturing Hubs Slump in August amid Sluggish Demand_2

The range is from 19600 to 19450.

Hang Seng Index: Purchasing Managers' Index of Asia's Major Manufacturing Hubs Slump in August amid Sluggish Demand_3

It is recommended to go long at the lows of the short-term Heng Seng Index today.

Entry Price: 19695;

Take Profit: 19500;

Stop Loss: 19890.

Risk Warnings and Disclaimers

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Jason

Summary:

The market has sufficiently digested expectations of a 75 basis point rate hike by the European Central Bank (ECB) in September. Meanwhile, market concerns about the risk of recession being exacerbated by its sharp rate hike are beginning to emerge. Euro (EUR) trend will retake the US dollar (USD) as the leading tone. It is only the market's expectation of a rate hike by the Federal Reserve (Fed) that is also temporarily peaking that can form support for the EUR for now.

BUY EURUSD

Close Time

CLOSED

0.99898

Entry Price

1.00769

0.99487

1.02850 -0.00043 -0.04%

41.1

Pips

Loss

0.99487

0.99482

Exit Price

0.99898

Entry Price

1.00769

Fundamentals

The EUR rallied above parity against the USD on Wednesday in oscillation, closing slightly higher by 0.39%, for the third consecutive session of oscillating to the upside. The Eurozone HICP released yesterday showed that inflation hit a record high again in August and will soon reach double digits. Before the data was released, the market had reacted in advance, and the EUR fell sharply in the short term. After the data was released, the market expected that the ECB could offer a series of moves to raise interest rates sharply in order to curb the soaring inflation. The EUR was then supported by interest rate hike expectations and then rose, paring all previous losses.

However, as the sharp interest rate hike will further slow economic growth and exacerbate the recession that is virtually certain to start from winter, it has raised concerns in the market, and the EUR has pulled back from its highs.

The market has sufficiently digested expectations of a 75 basis point rate hike by the ECB in September. The monetary markets expect the ECB to raise rates by a cumulative 125 basis points by October, implying that the ECB will raise rates by 75 basis points and 50 basis points, respectively, in its next two meetings. This repricing suggests that the market is increasingly willing to bet that the ECB will raise rates significantly at the beginning of the rate hike cycle. This is closely related to the shift in attitude at the ECB, with an increasing number of officials favoring an aggressive stance.

The ECB Governing Council Member and Austrian central bank president Holzmann stated in his speech yesterday that the fight against inflation should not be abandoned even if the risk of recession rises. September will see a minimum hike of 50 basis points, with 75 basis points still worthy of discussion. However, if it is decided to raise rates by 75 basis points in September, then a further rate hike of 75 basis points can be introduced in subsequent meetings. That will be close to the neutral rate, and then it can be decided whether to continue raising rates.

Although Holzmann did not explicitly support a 75 basis point rate hike in September, it can be seen that once a 75 basis point rate hike is implemented, it will mean a tough situation for inflation, and then a 75 basis point rate hike will be needed for subsequent meetings as well. In other words, Holzmann's attitude is clearly hawkish.

In addition, Russia officially suspended the only turbine of the Nord Stream-1 still in operation on Wednesday for three days of maintenance. The announcement was made on 25 August, so the news was not sudden. However, European governments are concerned that Russia will extend the suspension of supplies in retaliation for Western sanctions. This also increased market concerns and pressured the EUR.

The only support for the EUR's rise in interest rate expectations has been digested by the market; then, the EUR's trend will retake the USD as the leading tone. Considering that the market is awaiting non-farm payrolls as guidance to form a new round of expectations, the EUR can have a brief "respite" before the non-farm payrolls are released.

Technical Analysis

In the 4-hour chart, the EUR failed in another attempt to hit the ascending channel yesterday and pulled back slightly. It is hovering near the top of the oscillation range of 1.00172 - 0.99107. With the USD falling into oscillation as it awaits guidance from the non-farm payrolls, the EUR will follow its lead. In terms of indicators, Stoch is approaching the oversold territory; in DMI, the ADX has been running sideways for a while, showing that the EUR is in oscillation; -DI is at lows and is at 17.5, indicating that the EUR will have a round of decline; in the Ichimoku chart, the baseline is moving down, and the turning line is running sideways, and the price is above both, showing that the EUR will fall. Considering that the rise of the USD is limited, it is recommended to go long after the EUR has fallen.

EURUSD: With All the Bullish News Absent, Euro Falls into Oscillation; Recommend to Long after the Short-Term Decline_1

Trading Recommendations

Trading direction: Long

Entry price: 0.99898

Target price: 1.00769

Stop loss: 0.99487

Support: 1.0000/0.99521/0.99138

Resistance: 1.00410/1.00769/1.01229

Risk Warnings and Disclaimers

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Thomas

Summary:

Cryptocurrency market sentiment is negative in the short term. The BTCUSDT maintains a bearish trend, and the decline may deepen further in the short term.

SELL BTC-USDT

Close Time

CLOSED

20000.0

Entry Price

18000.0

21200.0

99151.2 +165.3 +0.17%

191.2

Pips

Profit

18000.0

19808.8

Exit Price

20000.0

Entry Price

21200.0

Fundamentals

Recently, many Fed officials continue to make hawkish statements, reaffirming the need to continue to raise interest rates. CME's Fed Watch tool shows that the probability of the Fed continuing to raise rates by 75 basis points in September has risen to 70%. At the same time, the market is also betting on the European Central Bank to raise interest rates by 75 basis points in September.

However, interest rate hikes and high inflation have exacerbated the downside risks, and a series of economic data from Europe and the US are suggesting the possibility of a recession. Out of caution, investors are avoiding riskier assets such as U.S. stocks and cryptocurrencies. A report from cryptocurrency company Coinshares shows that the cryptocurrency market saw net outflows for the third consecutive week last week, especially in Bitcoin, which dominated the market outflows. Market sentiment remains on the negative side.

BTCUSDT: Rally in a Bullish Trap, Go Short at Highs_1

Technical Analysis

BTCUSDT: Rally in a Bullish Trap, Go Short at Highs_2

From the monthly chart, BTCUSDT continues its bearish trend. The closing shows a pattern of "A bull candle between two bear candles", and it shows a slow rise and a sharp fall. The decline may be further deepened in the short term.

BTCUSDT: Rally in a Bullish Trap, Go Short at Highs_3

From the 4H chart, BTCUSDT is hovering around 20000 with a still bearish trend. The indicator RSI is still below 50, and the price is weakly oscillating in the short term. Both bulls and bears are hesitant, however, the rally is just an inducement, and the price is more likely to accumulate energy in the further breaking decline.

It is recommended to mainly go short at highs. After the price rallies to 20000 and stabilizes, try to go short with small positions, targeting the lower support level near 18000 and stop loss above 20560.

Trading Recommendations

Trading direction: Short

Entry price: 20000

Target price: 18000

Stop loss: 21200

Support: 19000/18000

Resistance: 20000/20800

Risk Warnings and Disclaimers

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Damon

Summary:

The market is becoming less volatile and the sentiment is moderate, awaiting the release of U.S. non-farm payroll data tomorrow.

SELL ETH-USDT

Close Time

CLOSED

1610.00

Entry Price

1300.00

1700.00

3323.81 -10.70 -0.32%

900.0

Pips

Loss

1300.00

1700.00

Exit Price

1610.00

Entry Price

1700.00

Hot News

1. Indonesia's Deputy Minister of Trade: The Indonesian government will launch a crypto bourse by the end of 2022.

2. South Korean officials intend to enact the Metaverse Industry Promotion Act, which requires relevant departments to develop a metaverse plan every three years.

3. Thailand imposed stricter regulations on crypto advertising from September 1.

4. Hermes has submitted trademark applications related to cryptocurrency, NFT, and the metaverse.

Sentiment

The Crypto Fear and Greed Index is at 20, representing extreme fear. The index was 23 yesterday and 27 the day before yesterday. The market is becoming less volatile and the sentiment is moderate, awaiting the release of U.S. non-farm payroll data tomorrow.

Technical Analysis

ETH rose to the 1620 level at noon yesterday and then fell under resistance and closed at 1553. The shooting star pattern in the daily chart released a bearish signal, but ETH fluctuated in the 30-min time frame. Therefore, it takes time to see whether to go long or go short. As the downtrend cannot be effectively broken, the overall trend is biased to be bearish. It is recommended to go short at highs.

ETH 30-Min Candlestick Chart

ETH-USDT: Price Falls after Rising in the Daily Chart with a Shooting Star Forming, Not Sure Whether or Not to Short_1

ETH Daily Candlestick Chart

ETH-USDT: Price Falls after Rising in the Daily Chart with a Shooting Star Forming, Not Sure Whether or Not to Short_2

Trading Recommendations

Trading direction: Short

Entry price: 1610

Target price: 1300

Stop loss: 1700

Support: 1530, 1300

Resistance: 1620, 1700

Risk Warnings and Disclaimers

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Winkelmann

Central Bank

Summary:

Rising expectations of a 75-basis point rate hike by the Federal Reserve and the European Central Bank in September have weakened the appeal of gold. Gold prices are still facing greater downward pressure in the short term.

SELL XAUUSD

Close Time

CLOSED

1705.56

Entry Price

1685.00

1732.00

2705.17 +8.24 +0.31%

264.4

Pips

Loss

1685.00

1732.00

Exit Price

1705.56

Entry Price

1732.00

Fundamentals

A series of US economic data has been strong recently, especially in the job market. And Fed officials frequently made hawkish remarks, suggesting that the Fed may continue to raise interest rates dramatically. Meanwhile, the European Central Bank is also under pressure from high inflation, desperately trying to catch up with the Fed. These factors have led more and more ECB officials to call for massive interest rate hikes to deal with inflation that could exceed 10% in the coming months.

For now, expectations of a 75-basis point rate hike by the Fed and the European Central Bank in September are heating up fast. And other major global central banks are also continuing their rate hike process, which will increase the opportunity cost of holding non-yielding gold and continue to depress gold prices. As a result, the bulls can only count on the deterioration of the non-farm payroll data and the continued decline in inflation before which gold remains on the bearish trend.

Technical Analysis

XAUUSD: Rate Hike Expectations Continue Heating Up, Gold Prices Could Test 1680 Again_1

The monthly chart shows XAUUSD closing with a shaven head in August, showing a potential double top pattern at highs. The right-side bearish trend is quite clear, and the decline is expected to continue further to the neckline support level near 1680.

XAUUSD: Rate Hike Expectations Continue Heating Up, Gold Prices Could Test 1680 Again_2

In the 4H chart, the small cycle continues to follow the trend of the large cycle. XAUUSD continues to oscillate downward, having fallen below the important support near 1710. The price is in a weak oscillation in the short term. The indicator RSI may extend further to the oversold area and is likely to further test the 1700 mark or the 1680 level in the coming sessions.

It is recommended to go short with small positions after the price rally to near 1710, with a target set near the lower support level of 1680 and a stop loss set above 1725.

Trading Recommendations

Trading direction: Short

Entry price: 1710.0

Target price: 1685.0

Stop loss: 1732.0

Support: 1700/1680

Resistance: 1710/1720

Risk Warnings and Disclaimers

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Jason

Summary:

Market expectations of a rate hike by the Federal Reserve (Fed) have temporarily peaked, limiting the US dollar's (USD) gains. Then, the USD oscillates in the short term, awaiting guidance from non-farm payrolls.

SELL USDX

Close Time

CLOSED

109.178

Entry Price

108.400

109.580

108.950 +0.070 +0.06%

40.2

Pips

Loss

108.400

109.584

Exit Price

109.178

Entry Price

109.580

Fundamentals

The USD continued to remain oscillating on Wednesday. After falling slightly in the Asian session to 108.511, it started to rise in the European session, once hitting 109.202 during the session. It pulled back from the highs in the New York session, paring all of its gains to close with a slight loss of 0.13%. The ADP released yesterday showed a modest increase of only 132,000 new jobs, but this can exaggerate the extent of the slowdown in the labor market. This is because government data continues to point to strong demand for workers, and labor market conditions remain tight. However, it cannot be denied that the labor market is slowing down, shifting from ultra-strong job growth to more normal conditions.

The USD reacted modestly to the ADP data, which was more influenced by rising market expectations of a rate hike by the European Central Bank (ECB). Eurozone inflation data released earlier showed a further rise in inflation, which means the ECB can offer a series of moves to raise interest rates sharply to curb inflation. Expectations of interest rate hikes supported the Euro's (EUR) rise while suppressing the USD. However, as the Eurozone faces the risk of recession, a sharp increase in interest rates can make it riskier. With market concerns, the EUR pulled back from its highs.

In addition, Cleveland Fed President Mester made a speech, reiterating that it was still too early to talk about inflation peaking. She indicated that there was still much work to be done by the Fed to contain inflation and that further rate hikes were needed to tighten financial conditions. Before reaching that conclusion, it would need to witness several consecutive months of declining month-on-month readings. She also argued that it would be necessary to raise the rate to slightly above 4% early next year and maintain the rate at that level. At the same time, she did not believe that the Fed would cut rates in 2023.

Due to the clarity of the Fed's medium-term monetary policy, the USD is in an ascending trend overall. However, as the Fed's attitude was expected by the market, the USD's rise was limited, and then it fell into oscillation in the short term. The market is awaiting guidance from Friday's non-farm payrolls to measure the extent of the US interest rate hike in September when a new round of expectations will be created.

Technical Analysis

In the 4-hour chart, the USD remains within the oscillation range of 108.081 - 109.178. From the CME FedWatch Tool, since the Jackson Hole conference, the expectations of the interest rate hike of the Fed have been hovering between 70% and 75%, indicating that market expectations have reached their peak temporarily. Then, a new round of guidance from data is needed, and the non-farm payrolls are a promising one. This also suggests that the USD will oscillate in this range until the release of the non-farm payrolls. In terms of indicators, Stoch, DMI, and the Ichimoku chart all suggest that the USD will rise slightly and then fall.

USDX: USD Oscillates in the Short Term as Rate Hike Expectations Reach the Peak Temporarily_1

Trading Recommendations

Trading direction: Short

Entry price: 109.178

Target price: 108.40

Stop loss: 109.580

Support: 108.564/108.081/107.484

Resistance: 109.178/109.580

Risk Warnings and Disclaimers

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Data

A50 Index: FTSE China A50 Adjusts Components, Several Track Stocks Moved Out due to Declining Market Capitalization

Fundamentals

Technical Analysis

Hang Seng Index: Purchasing Managers' Index of Asia's Major Manufacturing Hubs Slump in August amid Sluggish Demand

Fundamentals

Technical Analysis

With All the Bullish News Absent, Euro Falls into Oscillation; Recommend to Long after the Short-Term Decline

Fundamentals

Technical Analysis

Trading Recommendations

BTCUSDT: Rally in a Bullish Trap, Go Short at Highs

Fundamentals

Technical Analysis

Trading Recommendations

Price Falls after Rising in the Daily Chart with a Shooting Star Forming, Not Sure Whether or Not to Short

Hot News

Sentiment

Technical Analysis

Trading Recommendations

Rate Hike Expectations Continue Heating Up, Gold Prices Could Test 1680 Again

Fundamentals

Trading Recommendations

USD Oscillates in the Short Term as Rate Hike Expectations Reach the Peak Temporarily

Fundamentals

Technical Analysis

Trading Recommendations

Risk Disclosure