Hang Seng Index Technical: Bullish consolidation above 26,200 on China housing recovery

[Redator]

This is a follow-up analysis and an update of our prior publication, “Hang Seng Index Technical: Recent sell-off overdone, bullish trend remains intact”, published on 5 September 2025.

The Hong Kong 33 CFD Index (a proxy of the Hang Seng Index futures) has staged the expected bullish breakout above its prior 4-week “Ascending Wedge” range resistance of 25,890 and hit the next intermediate resistance at 26,120, as highlighted in our prior report.

Thereafter, it extended its gains and scaled up to a 4-year high of 26,583 on 12 September 2025, a rally of 4.7% on the backdrop of a stronger Chinese yuan and robust bullish sentiment in China's Big Tech, such as Alibaba, Baidu, NetEase, and Semiconductor Manufacturing International Corp, riding on the tailwinds of China’s Artificial Intelligence (AI) self-reliance policy, with less usage of external semiconductor chips such as Nvidia’s H20.

Let’s now examine the latest related fundamental factors that have an impact on the Hong Kong 33 CFD Index

China’s home prices continued to decline at a slower pace

Fig. 1: China’s industrial production, retail sales, house price index for Aug 2025 (Source: MacroMicro)

Today’s release of China’s industrial production and retail sales for August, which came in below expectations, does not cause a negative material impact on the intraday movements of the China and Hong Kong stock markets, where China’s CSI 300 and Hong Kong’s Hang Seng Index closed higher by 0.2% each, respectively.

The “bullish relief” stemmed from signs of recovery in China’s housing market, a key factor in preventing an entrenched deflationary spiral. New home prices for August, released today, marked their 10th straight month of improvement since the 10-year low of -5.9% y/y recorded in October 2024.

China’s new home prices across 70 cities fell 2.5% y/y in August 2025, moderating from July’s 2.8% decline. This marks the slowest pace of contraction since March 2024 and helps ease concerns over a potential deflationary spiral in the Chinese economy (see Fig. 1).

Hence, a slower pace of decline in China’s new home prices, coupled with a firmer offshore Chinese yuan against the US dollar since April 2025, managed to trigger a positive feedback loop back into the Hong Kong 33 CFD Index.

Here comes the latest short-term (1 to 3 days) trajectory and key technical levels to watch on the Hong Kong 33 CFD Index

Fig. 2: Hong Kong 33 CFD Index minor trend as of 15 Sep 2025 (Source: TradingView)

Preferred trend bias (1-3 days)

Bullish consolidation above adjusted key short-term pivotal support at 26,200. The minor bullish impulsive up move sequence of the Hong Kong 33 CFD Index remains intact.

A clearance above 26,530 sees the next intermediate resistances coming in at 26,740/26,790 and 26,940 (also a Fibonacci extension cluster) (see Fig. 2).

Key elements

• The upper boundary of the medium-term ascending channel in place since 2 June 2025, now stands at 26,940.
• The 1-hour RSI momentum indicator remains above its ascending support at around the 50 level.

Alternative trend bias (1 to 3 days)

Failure to hold at the 26,200 key short-term support negates the bullish tone on the Hong Kong 33 CFD Index for a deeper minor corrective decline to materialise and retest the former “Ascending Triangle” range resistance, now turns medium-term pull-back support at 25,860.

Opinions are the authors'; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. The provided publication is for informational and educational purposes only.
If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please refer to the MarketPulse Terms of Use.
Visit https://www.marketpulse.com/ to find out more about the beat of the global markets.
© 2025 OANDA Business Information & Services Inc.