Australia 200 – Looking Down Towards Support at 5400 Again

Australia 200 – Tuesday 28 July 2015

A few weeks ago the ASX200 enjoyed a solid resurgence back up from support at 5400 to a new three week high above 5650, however over the last week it has met resistance around 5650 and been forced lower. This has resulted in it drifting lower below 5650 however it finished last week enjoying some support from the 5500 level however it also has eyes back on support at 5400.  The 5400 level is likely to be called upon again shortly.  Over the last month the index has been able to find some much needed support around 5400 however with lower peaks over the same period. During this time the 5400 level has been severely tested but it has held up very well. Several weeks ago there was a strong reversal and sharp fall as the ASX200 index had resumed its medium term down trend and reached a five month low below 5400 in the process.

Throughout the last month or so it has fallen sharply a number of times yet enjoyed solid support from 5500, however this level has now given way. In the second half of May the medium term down trend in the ASX 200 had reversed however just as quickly it has taken out the lows around 5550 and moved lower to its lowest levels in five months. The 5500 level has been solid in the last few weeks and provided reasonable support to the index however too much bearish sentiment broke through this level. A little higher up at 5800, this level remains large and continues to apply downwards pressure on the index, as this has been a significant level for the index throughout this year. It will be interesting to see whether the index can garner enough support from the short term support level around 5500 which has propped the index up over the last week or so.

Back in early May the Australia 200 index declined sharply from highs around the key 6000 level and whilst it paused a little around 5800 and enjoyed some support, it continued to decline down to a three month low around 5550. Even if it was able to rally higher and move back through the key 5800 level, the index will rejoin the congestion range between 5800 and 6000 and likely find it difficult to move through there quickly. Accordingly the 6000 level which was spoken about at length for most of this year is now a distant level and is probably some time away from being seen again.

(Daily chart below)


Australia 200 July 28 at 00:25 GMT   5521   H: 5565   L: 5492

Australia 200 Technical

S3 S2 S1 R1 R2 R3
5500 5400 5650 5800 6000

During the early hours of the Asian trading session on Tuesday, the Australian 200 index will be trying to rally and get back through the resistance at 5650.

Further levels in both directions:

• Below: 5500 and 5400.

• Above: 5650, 5800 and 6000.

Economic Releases

  • 23:50 (Mon) JP Large Retailers Sales (Jun)
  • 23:50 (Mon) JP Retail Sales (Jun)
  • 06:00 UK Nationwide House Prices (Jul) (28th-2nd)
  • 08:30 UK GDP (1st Est.) (Q2)
  • 08:30 UK Index of Services (May)
  • 12:30 CA Industrial product price index (Jun)
  • 12:30 CA Raw Materials Price Index (Jun)
  • 13:00 US S&P Case-Shiller Home Price (May)
  • 14:00 US Consumer Confidence (Jul)
  • US Federal Reserve FOMC meeting (to 29th)

* All release times are GMT

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