According to the graph in my previous post, EUR was successful in breaking the downtread line due to the news and was likely to heading upwards. I believe only other breaking information would change its direction such as "accidentally" discover another financial problem in Spain / Portugal.
Dow Jones Industrial Index broke the resistance line yesterday, but we still have to wait for 2-3 days before confirming its trend. But I predict that DJI would have its trend going upwards.
Now, let's get back to Hang Seng Index.
We can see that HSI raised through the fibonacci line and was attempting to break the 125-day moving average. This is really a big resistance! With my prediction on DJI, HSI could be brought up by DJI and the next point should be at 21,640. However, there is still a worry for such prediction of HSI: interest rates of China.
After such a long time of recovery, China seemed to have signals of improving economy. Last time, China government raised the reserve rates of its banks. This time, it is almost time for China to make a second step (given current high asset price) to increase its interest rate. If it is so, the China enquity markets would probably fall in a short period (say around few months), and HSI would follow such and become bearish. This is what we have to worry about before entering long positions in Hong Kong market.
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