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CHNComp tests key resistance

Chinese equities had a robust session as optimism stemming from China’s shifting policy on Covid overshadowed fears of a global recession at least for the moment. CHNComp hovers near its highest levels since end-August 2022 after Beijing further relaxes covid restrictions, allowing citizens to travel between different parts of the country even without negative virus tests and stopping local officials from locking down large areas. The 10 new measures issued this week followed 20 measures announced in November as the Chinese government faced severe pressure to ditch its strict zero-Covid policy that has weighed heavily on the economy and led to civil unrest and demonstrations.

CHNComp is currently testing key resistance at 6715 pts, which is marked with 61.8% Fibonacci retracement of the downward wav launched in February 2022,  200 SMA (red line) and upper limit of the descending channel. Should a break higher occur, the next target for buyers can be found at 7765 pts, which is marked with 38.2% retracement. However overall sentiment remains bearish, therefore another downward impulse cannot be ruled out. In this case, support at 5900 pts may be at risk. Source: xStation5

Daily summary: Weak start to the week for global equities
Alibaba plunges 7.0% amid HQ move reports
EV makers under pressure
EUR/USD remains steady
CHNComp pulls back from crucial resistance