Hong Kong and mainland China are the most vulnerable economies at risk of a financial crisis over the next three years as over 40 out of 60 economic indicators are sending alarm signals, including runaway property prices and soaring levels of private debt. Twenty years on from the Asian financial crisis, the region is once again vulnerable, but the financial stress points are more domestic.
Many economists believe Asia is more resilient to shocks in the financial system now because many countries in the region have more flexible exchange rate policies, their current account deficits have turned to surpluses and foreign reserves have increased, but the Nomura analysts are among the few flagging the dangers.
Hong Kong’s decline was made most obvious last year, when the territory fell from third to fourth place in the 19th global financial centres index, ceding its position to Singapore.
To make matters worse, Hong Kong is facing a brain drain. A Chinese University of Hong Kong survey shows that about 40 per cent of Hong Kong residents who were polled by researchers want to leave the city.
For Hong Kong, which had successfully transformed itself into a thriving global city and seen meteoric growth in jobs and revenue from the engines of financial services and trade in the 1990s and early 2000s, there is a sense that its administrators can do better than this.
Many ask if the Hong Kong government knows what it wants and how it can go about sustaining Hong Kong’s financial hub status. I argue that a lack of centralisation in its policy processes has proven to be its Achilles’ heel.
Overall, the bias in prices is: Sideways.
Short term: Prices are stalling.
Intermediate term: Prices are ranging.
By the way, prices are vulnerable to a correction towards 7.79.
The projected upper bound is: 7.81.
The projected lower bound is: 7.79.
The projected closing price is: 7.80.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 29 white candles and 19 black candles for a net of 10 white candles.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 8.3059. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 3 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 46.98. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 3 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -119.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 4 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 2 period(s) ago.
Rex Takasugi – TD Profile
FOREX HKD= closed down -0.002 at 7.802. Volume was 60% below average (consolidating) and Bollinger Bands were 35% wider than normal.
Open High Low Close Volume
7.806 7.806 7.801 7.802 3,222
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 7.81 7.80 7.77
Volatility: 1 1 0
Volume: 7,817 8,547 7,537
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
FOREX HKD= is currently 0.4% above its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of HKD= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on HKD= and have had this outlook for the last 117 periods.
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