Fall of Shanghai Stock Exchange worries investors.

[RTFX-Trading]

Fall of Shanghai Stock Exchange worries investors.

The Shanghai Stock Exchange, the SSE Composite, fell by a further 4.30% today, which weighed on other financial markets. The Shanghai Composite index closed today at 2'785.584 points, its lowest level in two months and is 20% below a peak reached in early August. This sharp decline follows that on Monday, when the Chinese index fell 5.79%. On Monday, Chinese investors feared a strong and rapid rise in stocks, given the resumption of growth in China. Today, they express their disappointment at the lack of action on the part of Chinese authorities to support prices.

A break of the 55 day moving average could signal a long term decline of the Chinese stock market.

[IMG]http://www.realtimeforex.com/images/news/SSEComposte190809.gif[/IMG]

The summer period is coming to an end soon, with movements of funds expected from September. Personally, I think a drop in “carry trades” is possible. Perhaps it is time to follow the evolution of RTFX-Trend, especially in my view, the NZD / JPY, which obtained a good performance since the beginning of the financial crisis.

[IMG]http://www.realtimeforex.com/images/news/RTFX-TREND_NZDJPY.gif[/IMG]

Nicolas Longchamp

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