FXCM's CHN50 basket is in uptrend. It has charted a higher trough followed by a higher peak. The current down-leg appears corrective, retracing to the previous up-leg's 76.4% Fibonacci level (red horizontal). CHN50 could find support at this level and chart the next higher trough (HT?) in the series. Its RSI remains on the bullish side of 50, but is near dropping below (black ellipse). The longer it stays above 50, the greater the chance that a higher trough will be charted.
Overnight, three PMIs were released:
-The Manufacturing PMI beat the forecast of 50.7 and printed at 52.6. This is higher than the previous 50.1.
-The Non-Manufacturing PMI came in at 56.3. This beat the forecast of 55.0 and was higher than the previous 54.4.
-The Caixin Manufacturing PMI was 51.6, against the 50.7 forecast, and beat the previous 49.2.
Values above 50 show expansion and these suggest that the reopening of China is proceeding constructively. The Caixin Services PMI is due out on Friday with a forecast of 54.3.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.