Australia 200 for Tuesday, May 13, 2015
The Australia 200 index has been meeting resistance at the 5650 level to start this week. The last few days to finish last week saw significant declines in the Australia 200 index, which has resulted in it reaching a three month low just below 5550. After making another solid run at the key 6000 level a few weeks ago but again being forced back by overwhelming supply at that level, the Australian 200 index dropped sharply to move through the 5800 level down to a two month low below 5750, before rallying well to finish out that week. It has since reversed again and looks threatening to remain below 5800. Several weeks ago, the Australia 200 index showed some positive signs and moved well towards the resistance at 6000, before finishing the week strongly lower. Several weeks ago, the Australia 200 index pushed higher to a multi-year high to just above the key resistance level at 6000, before easing lower throughout the last couple of weeks to below 5900.
Back in mid-March, the ASX200 index found some support at the key 5800 level, which has propped it up and allowed it to rally a little and move higher; of course, it will be hoping to receive the same again. Back in early March, the ASX200 index reversed from its highs near 6000, and started to establish a new medium term down trend before rallying higher a couple of weeks ago. It enjoyed a strong move higher throughout February, moving from below the key 5800 level up to another multi-year high near 6000, where it met stiff resistance. At the beginning of February, it spent a week or so battling with resistance at the key 5800 level, which repeatedly fended off the index, resulting in it easing back a little. This level has resumed its key role and is currently having an impact on the index.
Throughout the second half of January, the Australian 200 index did very well and surged higher to move back above the key 5400 level and push on through to the new highs. At this time, the resistance at 5500 stood tall and fended off all advances; however, this now been broken strongly through. Throughout most of November and December, the Australia 200 index fell steadily lower down towards support around 5150 and two month lows before rallying back above 5400 again. Over the last few weeks, the Australia 200 index has struggled with resistance at 5400, which has forced it lower time and time again. The 5400 level has been a major player for the last 12 months, and the index must get back above this level to encourage more buying and bullish sentiment.
Australian Treasurer Joe Hockey has thrown $5 billion of tax relief at small business and farmers and given $4.4 billion in support for families to stimulate the economy and kickstart the coalition’s electoral hopes. “This is a budget that unleashes our nation’s potential,” the treasurer declared as he delivered his second budget on Tuesday. A deficit of $35.1 billion for 2015/16 defied economists’ expectations, and the government still expects to return to surplus in 2019/20. But the budget papers still forecast a jobless rate of 6 percent or over until 2018/19, despite a 0.5 percent lift in economic growth. Sensible savings, prudent spending and redirected funding to small business, child care, and infrastructure would boost growth and jobs, Mr. Hockey said. Small business will get a corporate tax rate cut of 1.5 percent, an annual 5 percent tax discount of up to $1000 a year for unincorporated businesses and, from budget night, an immediate tax deduction for all items purchased by a small business up to $20,000.
(Daily chart below)
Australia 200 May 13 at 00:25 GMT 5654 H: 5675 L: 5571
Australia 200 Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 5550 | 5400 | — | 5650 | 6000 | — |
During the hours of the Asian trading session on Wednesday, the Australia 200 index will be looking to continue to rally and move back through the resistance at 5650.
Further levels in both directions:
• Below: 5500 and 5400.
• Above: 5650 and 6000.
Economic Releases
- 23:50 (Tue) JP M2 Money Supply (Apr)
- 01:30 AU Wage Price Index (WPI) (Q1)
- 08:30 UK Average Earnings (incl. bonus) (Mar)
- 08:30 UK Claimant Count (Apr)
- 08:30 UK ILO Unemployment Rate (Mar)
- 09:00 EU GDP (1st Est.) (Q1)
- 09:00 EU Industrial production (Mar)
- 09:30 UK BoE Releases Quarterly Inflation Report
- 11:30 EU ECB minutes of previous meeting to be released
- 12:30 US Import Price Index (Apr)
- 12:30 US Retail Sales (Apr)
- 14:00 US Business inventories (Mar)
- JP Economy Watchers Survey (Apr)
- WLD IEA release monthly oil market report