Australia 200 for Tuesday, January 20, 2015
During the last week or so the Australia 200 Index has eased back again under the 5400 level after making numerous attempts to clear it over the last month, which has seen it drop to a three week low below 5250. It is presently in a short term down trend. The short-term resistance level at 5500 continues to loom large and is placing selling pressure on the index as well as battling with resistance at 5400 too. 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. 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.
A private gauge of Australian inflation braked to the slowest pace in two-and-a-half years in December as petrol prices plunged, suggesting there was expanding scope for another cut in interest rates if needed to support the economy. The TD Securities-Melbourne Institute’s monthly measure of consumer prices was unchanged in December from November, when it edged up by 0.1 percent. December is normally a strong month for prices but this time a steep fall in petrol kept inflation restrained. The annual pace slowed sharply to 1.5 percent, from 2.2 percent in November. That was the lowest reading since July 2012. Importantly for monetary policy, measures of underlying inflation also showed a marked moderation in price pressures, with the trimmed mean up just 1.7 percent on a year earlier and down from 2.4 percent in November. The Reserve Bank of Australia (RBA) focuses on underlying inflation when setting interest rates, aiming to keep it in a range of 2 to 3 percent over the long run. The slowdown in the TDMI figures will thus only add to market speculation about a cut in the current 2.5 percent cash rate. Interbank futures are fully priced for a move by May, though they imply only a slight chance of an easing at the RBA’s next policy meeting on Feb. 3.
Australia 200 January 19 at 22:15 GMT 5286 H: 5355 L: 5275
Australia 200 Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 5150 | 5100 | — | 5400 | 5650 | — |
During the hours of the Asian trading session on Tuesday, the Australia 200 Index will be trying to reverse and rally back above the key 5400 level again.
Further levels in both directions:
• Below: 5150 and 5100.
• Above: 5400 and 5650.
Economic Releases
- 23:30 (Mon) AU Westpac Consumer Confidence (Jan)
- 09:00 EU Trade Balance (Nov)
- 10:00 EU ZEW (Economic Sentiment) (Jan)
- 13:30 CA Manufacturing sales (Nov)
- 13:30 CA Wholesale Sales (Nov)
- 15:00 US NAHB Builders survey (Jan)
- EU EU General Affairs Ministers Hold a Meeting in Brussels
- JP BoJ Monetary Policy meeting (to 21st)