It has a bullish trading session for the Hang Seng Index Futures (HKEX: HSI), which is currently trading 1.52% higher today as the equities seemingly brushed off the expected 25-basis point hike from the Fed after it signalled that a rate pause could be on the horizon. The Hong Kong Monetary Policy followed suit after it announced a 25-basis point rate hike earlier today. However, the interest decision wasn’t enough to overpower the sentiment of an imminent Fed rate pause in driving the equities higher.

The index futures’ positive performance was primarily driven by the gains in the index’s main components as well as the financial stocks. Alibaba Group Holding Ltd closed 0.44% higher, while China Construction Bank and the Industrial and Commercial Bank of China closed 3.92% and 5.05% higher, respectively.

Technical

The 4H chart shows that the index futures are trading within a wide ascending channel. With the index futures recently bouncing off the channel’s lower bound, the bulls could look to attack the 20010 resistance level, with the 200-day moving average acting as the immediate resistance. A sustained break above the 20010 price level would bring the 20087 resistance level into play.

However, the bulls’ failure to sustain a move above the 50% Fibonacci retracement level would leave the 19719 support level in play. A sustained break below the initial support level would bring the golden ratio into play. A break below the golden ratio would signal the presence of sellers and would aid the bears’ charge towards the 19501 support level.

Summary

The index futures bulls’ charge was primarily aided by the sentiments towards a Fed rate pause on the horizon. With the lack of significant economic data from the US or China, the sentiment could continue to drive the index futures’ trading during the session. Therefore, a short-term trading opportunity could exist at 20010 if the price action could sustain a break above the 200-EMA. However, failure to break above 200-EMA would leave the 19719 support level in play.

Sources: TradingView, Reuters, Market Screener.

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