Australia 200 for Thursday, March 26, 2015
Throughout last week the Australia 200 index pushed higher to a multi-week high to just above the key resistance level at 6000, before easing lower in the last few days as the key 6000 level remains firm and a significant obstacle. Over the last couple of weeks the ASX200 index has found some support at the key 5800 level which has propped it up and allowed it to rally a little and move higher. A few weeks ago the ASX200 index reversed from its highs near 6000 and started to establish a new medium term down trend before rallying higher in the last week. If it is to move lower through the trough around 5740, then lower values should be expected with the next obvious support level around 5700, however it presenting is placing pressure on the resistance at 6000.
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.
The moderate support from around the 5300 level held it up well for a a couple weeks before the surge higher. The short-term resistance level at 5500 has returned and now resumes its role of placing selling pressure on the index. 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. It enjoyed a solid resurgence throughout October after getting much needed support from the 5200 level, which has resulted in it moving back above the 5400 and 5500 levels, around a two month high.
The financial stability of Australian businesses is on the improve as companies watch their spending and borrow less. Challenges remain however for businesses in the commercial housing and resources sector. The Reserve Bank’s latest Financial Stability Review reveals financial stress for Australian businesses is falling. Debt levels remain near historical lows, having fallen sharply after the financial crisis and remained in check since. This, combined with record low interest rates, has left businesses in a good financial position. “Business finances appear generally in good shape,” the RBA said. Recent surveys have shown business confidence in Australia is struggling, and businesses are being frugal with their money as a result. “Like households, businesses remain fairly cautious in their spending and borrowing decisions, despite the low interest rates,” the report said.
(Daily chart below)
Australia 200 March 25 at 22:40 GMT 5928 H: 5993 L: 5925
Australia 200 Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 5800 | 5400 | 5150 | 6000 | — | — |
During the hours of the Asian trading session on Thursday, the Australia 200 Index will be looking to the resistance at 6000 again and trying to push higher.
Further levels in both directions:
• Below: 5800, 5400 and 5150.
• Above: 6000.
Economic Releases
- 23:30 (Wed) JP CPI Core (Nation) (Feb)
- 23:30 (Wed) JP CPI Core (Tokyo) (Mar)
- 23:30 (Wed) JP Real Household Spending (Feb)
- 23:30 (Wed) JP Unemployment (Feb)
- 23:30 (Wed) JP Large Retailers Sales (Feb)
- 23:30 (Wed) JP Retail Sales (Feb)
- 09:00 EU M3 Money Supply (sa) (Feb)
- 09:30 UK Retail Sales (Feb)
- 12:30 US Initial Claims (21/03/2015)