Australia 200 for Wednesday, April 22, 2015
The Australian 200 index is once again enjoying solid support from the 5800 level which is allowing time and space to rally and return to near the 6000 level. It has throughout the last few days relied upon support from this level. Throughout last week the Australian 200 index showed some positive signs and moved well towards the resistance at 6000 before finishing the week strongly lower. If the 6000 level is broken, it is reasonable to expect a large shift towards bullish sentiment and potentially the index could really take off – it seems as if everyone is just waiting for it to happen. 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. It is receiving ongoing support at 5800, which is helping its latest push towards 6000. The key 6000 level remains firm and a significant obstacle and the index and markets are firmly fixed on it.
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, and 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.
Australia’s central bank is willing to cut interest rates again if needed, but is cautious about the likely impact on house prices and debt levels, a top policy maker said on Monday. Speaking in New York, Reserve Bank of Australia (RBA) Governor Glenn Stevens also reiterated that the Australian dollar was “very likely” to fall further over time. The central bank cut interest rates to a record low of 2.25 percent in February, but it surprised many analysts by skipping further moves at its policy meetings in March and April. “The (RBA) Board has clearly signalled a willingness to lower it even further, should that be helpful in securing sustainable economic growth,” Stevens told the American Australian Association. “The Board has been proceeding with a degree of caution that is appropriate in the circumstances,” he added, “It also has, I would say, a realistic assessment of how much monetary policy can be expected to achieve in supporting the adjustment the economy needs to make.” Financial markets imply around a 50-50 chance of a cut to 2 percent at the RBA’s next meeting on May 5, having lengthened the odds after a surprisingly strong jobs report out last week.
(Daily chart below)
Australia 200 April 22 at 02:40 GMT 5820 H: 5867 L: 5816
Australia 200 Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 5800 | 5400 | 5150 | 6000 | — | — |
During the hours of the Asian trading session on Wednesday, the Australia 200 Index is relying on support at 5800 again after falling so sharply to finish last week.
Further levels in both directions:
• Below: 5800, 5400 and 5150.
• Above: 6000.
Economic Releases
- 00:30 AU Westpac-MI Leading Index (Mar)
- 01:00 AU Internet Skilled Vacancies (Mar)
- 01:30 AU CPI (Q1)
- 08:30 UK BoE MPC minutes released
- 13:00 US FHFA House Price Index (Feb)
- 14:00 EU Flash Consumer Sentiment (Apr)
- 14:00 US Existing home sales (Mar)