Australia 200 for Thursday, November 27, 2014
Over the last few weeks the Australia 200 index has returned some of its recent gains falling from above 5550 down to a one month low below 5300 before finding a little support around 5340, which has propped it up a little to finish out last week. Over the last few days the index has been content to consolidate just below the 5400 level and in recent days has been starting to make a move back above the 5400 level. Prior to that it had 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. Throughout most of September the Australia 200 Index declined strongly from its multi-year high after running into resistance around 5650 back to enter its previously established trading range between 5400 and 5500, before falling further below 5200 and to an eight month low around 5120 a few weeks ago. Several weeks ago it received solid support from the 5100 level which saw it rally well to close out a couple of weeks ago. Back in early September the 5400 level was called upon to offer support as the index desperately tried to stay in touch with its range, however it fell through there before rallying strongly back up to 5400. Up until recently, the 5400 level had done well and propped up price to keep it within the range.
In its recent fall at the beginning of August it moved down to a three week low around 5375, however it received solid support at the 5400 level which has allowed to consolidate and rally higher. The solid move higher throughout July saw it move strongly up through both the 5500 and 5550 levels to reach a then six year high around 5620. In recent weeks it has discovered a new key level to deal with after running into a short term resistance level at 5550, which earlier last week provided some solid support. It reversed strongly several weeks ago bringing it back down to almost touch the 5400 level before rallying back higher again. At the beginning of June the Australian 200 Index fell and broke back down through the key 5500 level towards a four week low around 5400 before consolidating and resting on support there for an extended period.
Back at the end of May, it moved back and forth between the two key levels of 5500 and 5550 before the recent fall. Over the last couple of months the Australia 200 Index has formed an amazing attraction to the key 5500 level as it spent a considerable amount of time trading around it. A couple of weeks ago, the index fell away heavily back down to support around 5400 before returning to the key 5500 level just as quickly, as if gravity had pulled it back. The index has done very well over the last couple of years moving from below 4000 to its present trading levels around 5500.
Australia’s dollar is likely to drop in line with commodity export prices, central bank Deputy Governor Philip Lowe said, as the currency hit a four-year low. “If the exchange rate is to play its important stabilizing role, it needs to go down when the terms of trade and investment are declining,” Lowe said in a speech in Sydney late yesterday. “We have seen some adjustment, but if our assessment of the fundamentals is correct we would expect to see more in time.” While the Australian dollar has fallen more than 8 percent in the past three months, it remains elevated as the nation’s key interest rate of 2.5 percent attracts investors away from the U.S., Japan and Europe where benchmarks are at or near zero. The yield difference has helped the Aussie resist a fall in the terms of trade, or export prices relative to import prices, that normally guide its trajectory.
Australia 200 November 26 at 23:15 GMT 5416 H: 5418 L: 5396
Australia 200 Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 5340 | 5100 | — | 5650 | — | — |
During the hours of the Asian trading session on Thursday, the Australia 200 Index will be trying to find some more support from the 5400 level and look to rally higher and return to above 5500 again. For most of this year the Australia 200 Index has moved well from the lower support level at 5000 up to the multi-year highs above 5600 in September.
Further levels in both directions:
• Below: 5340 and 5100.
• Above: 5650.
Economic Releases
- 23:30 (Wed) JP CPI Core (Nation) (Oct)
- 23:30 (Wed) JP CPI Core (Tokyo) (Nov)
- 23:30 (Wed) JP Real Household Spending (Oct)
- 23:30 (Wed) JP Unemployment (Oct)
- 23:50 (Wed) JP Industrial Production (Prelim.) (Oct)
- 23:50 (Wed) JP Large Retailers Sales (Oct)
- 23:50 (Wed) JP Retail Sales (Oct)
- 00:30 AU Capital Expenditure (Q3)
- 09:00 EU M3 Money Supply (sa) (Oct)
- 10:00 EU Business Climate Index (Nov)
- 10:00 EU Consumer Sentiment (Nov)
- 10:00 EU Economic Sentiment (Nov)
- 10:00 EU Industrial Sentiment (Nov)
- 13:30 CA Current Account (Q3)