Australia 200 for Monday, October 13, 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. 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 gyrating jobs figures are making it harder for the central bank and investors to gauge the impact of record-low interest rates on the nation’s economy. The number of people employed fell by 29,700 last month after rising 32,100 in August, the statistics bureau stated. Last week it announced a review of methodology designed to smooth seasonal factors that produced a record 121,000 increase in jobs in August and would’ve shown a 172,000 loss in September. “The admission of statistical discrepancies has essentially muddied the state of the labor market,” said Savanth Sebastian, an economist at a unit of Commonwealth Bank of Australia in Sydney. “Not only does it make it difficult for investors and analysts to get a clearer picture of employment growth, but it will result in Reserve Bank policy makers being more cautious when it comes to interest-rate decisions.”
Australia 200 October 12 at 23:10 GMT 5121 H: 5121 L: 5121
Australia 200 Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 5100 | — | — | 5500 | 5650 | — |
During the hours of the Asian trading session on Monday, the Australia 200 Index is going to try to rally higher and stay 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
- 23:01 (Sun) UK BRC Retail Sales Monitor (Sep)
- 23:50 (Sun) JP M2 Money Supply (Sep)
- 23:50 (Sun) JP CGPI (Sep)
- EU Eurogroup meeting in Luxembourg