Hang Seng Index Forecast: Bullish Trend & Liquidity
- The Hong Kong 33 CFD Index, mirroring the Hang Seng, has surged 27% since april, buoyed by optimism surrounding US-China trade relations.
- President Trump's decision to reduce tariffs on Chinese goods to 30% for 90 days, after initial negotiation talks, has fueled market optimism.
- The Hang Seng's recent gains were also supported by a phone call between President Trump and president Xi, leading to further trade negotiations.
The Hang Seng Index is on a bullish trend. As April, the Hong Kong 33 CFD Index has rallied 27%, driven by easing US-China trade tensions and a weaker dollar. President Trump’s tariff cuts fueled the rally, creating a “TACO” trade theme. Weakness in the U.S. dollar makes Asian stocks, including the Hang Seng, more attractive to investors seeking liquidity. Technical signals also support the uptrend. News Directory 3 is following the developments. With key support at 22,690, watch for a break that could reverse the trend. Discover what’s next for the Hang Seng Index.
Hang Seng Index Rallies on US-China trade Optimism
Updated june 10, 2025
The Hong Kong 33 CFD Index, mirroring the Hang Seng, has surged 27% since april, buoyed by optimism surrounding US-China trade relations. This rally follows a period of uncertainty when the index declined by 18%, hitting a medium-term support level of 19,700.
President Trump’s decision to reduce tariffs on Chinese goods to 30% for 90 days, after initial negotiation talks, has fueled market optimism. This has led to the emergence of the ”TACO” trade theme, reflecting expectations that Trump will soften his stance after initial tariff threats.
The Hang Seng’s recent gains were also supported by a phone call between President Trump and president Xi, leading to further trade negotiations. Beyond trade dynamics, a weak U.S.dollar and improving credit conditions in China are contributing to the index’s upward momentum.
The dollar’s weakness stems from concerns about the U.S. budget deficit and trade policies, pushing U.S. Treasury yields above 5% in May. This has made U.S. assets less attractive, benefiting the Hong Kong stock market.
Year-to-date, the Hang Seng has outperformed major U.S. stock indices, gaining 23.5% compared to smaller gains in the S&P 500, Dow, and Nasdaq. The ongoing weakness of the U.S. dollar suggests continued outperformance for the Hong Kong 33 CFD Index.
China’s Credit Impulse Index, a measure of new loans as a percentage of GDP, has rebounded since November, indicating increased liquidity in the Chinese economy. Historically, bottoms in this index have preceded major uptrends in the Hang seng Index.
Technical analysis also points to a potential uptrend, with the index showing a “V-shaped” recovery after testing its 50-day moving average. The daily RSI momentum indicator is displaying bullish signals.
key support is seen at 22,690, with resistance levels at 25,080 and 26,200. A failure to hold the 22,690 support could lead to a decline towards 21,225, the 200-day moving average.
What’s next
Traders will be closely watching the 22,690 support level. A break below this level could signal a trend reversal, while holding above it would reinforce the bullish outlook for the Hang Seng Index.