CHN50’s longer-term trend is up
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The weekly chart of FXCM's CHN50 CFD shows a series of higher troughs followed by higher peaks. This is an uptrend. Its RSI is also on the bullish side of 50 (green rectangle). The longer it maintains this position, the greater the likelihood of further price appreciation.
Investor sentiment is positive. It accompanies November's end of the harsh lockdown. Freer domestic movement will unlock pent-up demand. This will be backed by the opening of its borders to international travel.
Policy makers are also easing restriction in strategically important areas. The tech-industry crackdown is being curbed, which will be price supportive, and borrowing restrictions for property developers are also being eased. In effect, policy is shifting towards a growth focus.
The current risk is the spread of COVID infections and related data is being suppressed. If there is a sustained outbreak, economic activity will be affected.
Image by Clker-Free-Vector-Images from Pixabay
Russell Shor
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.
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