Market Analysis Thursday 30th of May

ANALYSIS 30-05-2013

HK Shares End Lower Depressed Profit Taking

Hong Kong shares ended lower on Wednesday on profit taking after two days of gains, and investors remain cautious on the outlook for the Chinese economy.

Technically, the index in the trading session today, Thursday (30/05) likely to weaken, test negative trends, the impact of Wall Street. On the bearish engulfing formation M15 chart gives an opportunity for the index to move downside. However, the volume is likely to increase, an early indication of a bullish index. In addition, RSI, on the M15 chart, is in the oversold area, cue upside.

Expected, the index tested the first support level ie 22110 and 22023. If it fails in 22238, we then estimated the index tends to retest the resistance level of 22351 and continued up to the possibility of being in the 22443 area.

Euro Helped German Inflation Data

The euro turned higher against the U.S. dollar after data showed German inflation that exceeded expectations. Inflation in Germany drove at an annual rate of 1.5% in May, faster than the estimated 0.2%.

Technically, today’s trading session on Thursday (30/05), the pair euro dollar likely to move in a positive trend.

A stronger Euro is mainly expected to soon re-test the resistance at 1.3120 minimum and maximum 1.3235. Meanwhile, if the Euro was unable to break and stays below 1.2945 then another alternative scenario the Euro likely to test support at the 1.2820 area and 1.2709.

Gold Up On Strong Demand Physical, Decrease in Equity

Gold rose around 1% on Wednesday, reversing losses from the previous session as the decline in the dollar and equities decline sparked buying of physical gold.

Technically, gold in the trading session today, Thursday (30/05) potential reversal, tested positive trend, but prone to profit taking. Indicator RSI resistance likely to re-test the bullish channel and into the area, but the Bollinger Bands are starting to shrink, thus giving impetus to gold to the downside.

Estimated gold price immediately prior to test resistance at least in the area of ​​1435.33 and re-test the maximum level of 1458.96. However, if the gold price could not break and stays below 1391.25 then estimated the price of gold has the potential to test Support the 1363.65 and 1337.65.