Asian Indices: Key Support Ahead of FOMC

Stay updated on Asian indices’ critical support levels before the FOMC decision—essential insights for traders.

Asian markets, including the Hang Seng Index, Kospi, and Topix, are currently grappling with crucial support levels in anticipation of the upcoming US Federal Reserve interest rate decision. This analysis dissects the recent price actions and outlines the pivotal levels traders must monitor closely.

Asian Indices: Key Support Ahead of FOMC

Hang Seng Index: Uphill Battle Amidst Downward Momentum

Since early 2023, a persistent downtrend has trapped the Hang Seng Index with lower highs and lower lows. It is teetering on the edge of a declining channel established since the beginning of the year. A decisive break below the current support could usher in a further decline, possibly targeting the 2022 low of 14600. The downward pressure persists despite occasional pauses due to oversold conditions and policy interventions. The Index must breach the mid-October high of 18300 to reverse this trend. Multiple obstacles, including the upper channel boundary near the August high of 20350, need to be surmounted for a sustained rebound.

Kospi: Testing Critical Levels After Bullish Momentum Wanes

Kospi’s nine-month recovery came to an abrupt halt with a failure to surpass the January low of 2590 earlier in the year. The subsequent decline led to the realization of the double top pattern’s target around 2380, formed by the June and August highs—currently, the Index hovers near this critical support. Further downside risks become significant if Kospi drops below the 2022 low of 2135, slightly above the 200-month moving average at approximately 2085. A sustained breach below this level could amplify bearish sentiments. The last time Kospi decisively dipped below the long-term moving average was in 2003, emphasizing the gravity of such a move.

Topix: Finding Stability Amidst Market Uncertainty

Topix has held above a robust support line established in mid-2023 at approximately 2200. This steadfast support has been instrumental in maintaining a pattern of higher highs and higher lows in recent months. However, a breach below this level could disrupt this sequence, potentially leading to a temporary easing in upward pressure. The subsequent target might be the 200-day moving average at about 2150. By taking a broader perspective, it becomes evident that the Index has demonstrated resilience, notably by surpassing a mid-1990s horizontal trendline. The more comprehensive bullish outlook remains intact as long as Topix remains above the 2021 high of 2120.

In conclusion, Asian indices are delicately balanced on crucial support levels, making the upcoming FOMC decision a pivotal event for market participants. Traders must closely monitor these support thresholds and adjust strategies according to evolving market dynamics.

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