The Chinese government still lacks a clear policy to support the economy.

The value of the yuan has slightly weakened because China has set a GDP growth target of around 5% for 2024. Additionally, it aims for an unemployment rate of approximately 5.5% and expects to create up to 12 million new jobs. It is also anticipated that the Consumer Price Index (CPI) will increase by around 3%. Private sector surveys indicate a slowdown in China's service sector to its lowest level in three months. Investors are awaiting further signals from the ongoing meetings, hoping for clearer and more equitable policies from the Chinese government and central bank.

China's People's Bank has reduced interest rates on five-year prime loans by 25 basis points to 3.95% in February, marking the most significant rate cut since the announcement of such rates in 2019. Meanwhile, the central bank has also reduced banks' reserve requirements by another 50 bps last month, allowing for more lending.

China's new credit figures increased to 4.92 trillion yuan in January, higher than the expected 4.5 trillion yuan. This increase in new credit is attributed to government support aimed at bolstering the economy. Household loans, mainly mortgages, increased by 980.1 billion yuan, while business loans increased by 3.86 trillion yuan. Additionally, non-performing loans increased by 10.4%.

The Chinese government has set a GDP growth target of around 5% for 2024, while aiming for a fiscal deficit of 3% of GDP, down from 3.8%. Fiscal revenues are expected to increase by 3.3%. Furthermore, the government has announced plans to issue special long-term government bonds worth 1 trillion yuan within this year.

The yield on China's 10-year government bonds has dropped to around 2.35% due to the government's 5% growth target, with investors seeing no significant economic support signals. Moreover, there are persistent challenges such as a long-standing real estate market downturn, pressures from monetary tightening, declining consumer demand, and geopolitical tensions with the West, particularly the increasingly aggressive stance of Western nations and the United States. These are considered significant challenges for the Chinese government.

Techical analysis data (5H)

Resistance: 7.1998, 7.2004, 7.2013

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 7.1974 - 7.1983 but cannot break the support at 7.1983, you may set a TP at approximately 7.2004 and SL at around 7.1969 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 7.1998 - 7.2004, you may set a TP at approximately 7.2013 and SL at around 7.1974 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 7.1998 - 7.2004 but cannot break the resistance at 7.1998, you may set a TP at approximately 7.1974 and SL at around 7.2013 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 7.1974 - 7.1983, you may set a TP at approximately 7.1969 and SL at around 7.2004 or according to your acceptable risk.

Pivot point March 6, 2024 03:26 PM. GMT+7