Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Australia 200: Bounces Strongly Off Support At 5100

Published 10/15/2014, 12:56 AM
Updated 03/05/2019, 07:15 AM

Australia 200 for Wednesday, October 15, 2014

Since the beginning of September the Australia 200 Index has 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 to close out last week. It enjoyed support from the 5200 level and was trying to rally higher after recently threatening to break through this level for the first time since February 2014, however it has since fallen lower to below 5100.  It has since received solid support from the 5100 level which saw it rally well in the last 24 hours.  Several weeks ago 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. It has now fallen sharply to an eight month low at 5120. 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.

The 5400 and 5500 levels firmly established themselves as significant and now that we have seen a substantial break to one side, momentum has kicked in and seen the index fall strongly lower. 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 currency remains overvalued on most measures while any sell-off in global fixed-income markets could be “relatively violent,” central bank Assistant Governor Guy Debelle said in a speech.  “The Australian dollar is still higher than most conventional estimates of fundamentals would indicate, notwithstanding its recent decline,” Debelle said in the text of a speech in Sydney today. “The exchange rate is thus offering less assistance than would normally be expected in achieving balanced growth in the Australian economy. A lower exchange rate would be helpful in achieving that objective.”  Debelle’s address focused on the market’s failure to react in a sustained way to instability in the Middle East and eastern Europe, uncertainty about the turning point in U.S. monetary policy, the future direction of policy in Japan and Europe and concern about the strength of China’s economy. Investors may have been pacified by central banks’ increased forward guidance for interest rates, he said in the text of his speech.

Australia 200 Daily Chart

Australia 200 October 14 at 23:40 GMT   5178   H: 5178   L: 5178

Australia 200 Technical

S3 S2 S1 R1 R2 R3
5100 5500 5650

During the hours of the Asian trading session on Wednesday, the Australia 200 Index is going to try to rally higher and get back above the recent support level at 5200, after recently breaking through this level for the first time since February 2014. 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 5500 in the last month or so.

Further levels in both directions:

• Below: 5100.

• Above: 5500 and 5650.

Economic Releases

  • 21:30 (Tue) NZ BNZ-Business NZ PMI (Sep)
  • 00:30 AU New motor vehicle sales (Sep)
  • 04:30 JP Capacity Utilisation (Aug)
  • 04:30 JP Industrial Production (Final) (Aug)
  • 08:30 UK Average Earnings (incl. bonus) (Aug)
  • 08:30 UK Claimant Count Change & Rate (Sep)
  • 08:30 UK ILO Unemployment Rate (Aug)
  • 12:30 US Empire State Survey (Oct)
  • 12:30 US PPI (Sep)
  • 12:30 US Retail Sales (Sep)
  • 14:00 US Business inventories (Aug)
  • 18:00 US US Federal Reserve releases Beige Book Report
  • EU ECB Governing Council hold non-rate setting meeting

Original post

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.