Australia 200 for Tuesday, January 27, 2015
In the last week or so the Australian 200 index has surged higher to move back above the key 5400 level to a three week high just shy of the resistance level at 5500. This move is important as it desperately tries to hang on to this important trading range for the index above 5400. In the week prior, the Australia 200 Index eased back again under the 5400 level after making numerous attempts to clear it over the last month, which saw it drop to a three week low below 5250 before its recent surge higher. The moderate support from around the 5300 level held it up well for a a couple weeks before the surge higher. The short-term resistance level at 5500 has returned and now resumes its role of placing selling pressure on the index.
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.
The Aussie dollar’s slide below 80 U.S. cents for the first time since 2009 is being fueled by speculation the central bank will need to reduce borrowing costs from a record low. The Bank of Canada’s surprise interest-rate cut and the European Central Bank’s quantitative-easing program have raised the odds of looser monetary policy in Australia. Traders on Thursday saw a 40 percent chance the Reserve Bank of Australia will cut rates at this year’s first policy meeting on Feb. 3, up from 25 percent odds on Jan. 16, according to overnight interest rate swaps. Currency traders turned the most bearish on the Aussie in more than a year, options show. While Australia’s central bank has kept its key rate at 2.5 percent for 17 months, the benchmark is at least 1.25 percentage points higher than any other major developed economy outside New Zealand. Australia has been struggling with the end of a once-in-a-century resources boom and a slowdown in China, which buys more than 35 percent of its overseas shipments.
Australia 200 January 26 at 22:20 GMT 5478 H: 5488 L: 5436
Australia 200 Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 5400 | 5150 | 5100 | 5500 | — | — |
During the hours of the Asian trading session on Tuesday, the Australia 200 Index will be trying to maintain price above the key 5400 level after surging higher in the last week or so and make another run at the resistance at 5500.
Further levels in both directions:
• Below: 5400, 5150 and 5100.
• Above: 5500.
Economic Releases
- 00:30 AU NAB Business Confidence & Conditions (Dec)
- 08:00 EU EU Finance Ministers Hold Meeting in Brussels
- 09:30 UK GDP (1st Est.) (Q4)
- 09:30 UK Index of Services (Nov)
- 13:30 US Durable goods (Dec)
- 14:00 US S&P Case-Shiller Home Price (Nov)
- 15:00 US Consumer Confidence (Jan)
- 15:00 US New Home Sales (Dec)
- US Federal Reserve FOMC meeting (to 28th)