Australia 200 for Monday, March 16, 2015
Over the last couple of weeks the ASX200 index has reversed from its highs near 6000 and now has established a new medium term down trend forming a peak around 5870 and then moving lower towards the recent trough around 5740. If it is to move lower through the trough around 5740, then lower values should be expected with the next obvious support level around 5700. 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.
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.
Australia’s low debt, by world standards, is encouraging foreigners to buy the majority of commonwealth government bonds, a senior Reserve Bank official says. Guy Debelle, a central bank assistant governor, says Australia’s AAA credit rating has also boosted the popularity of Commonwealth government securities (CGS) among overseas investors since the global financial crisis. Part of the attraction is Australia’s low debt levels, as a proportion of gross domestic product, compared to other nations. “The stock of debt on issue remains considerably less as a share of GDP than nearly all other jurisdictions,” Dr Debelle told a capital markets summit in Sydney on Monday. “The vast majority of the post-crisis CGS issuance has been purchased by non-residents attracted to the Australian government’s AAA credit rating and favourable level of yields relative to other highly-rated sovereign issuers.” Shorter-dated yields have fallen, despite an increasing supply of Australian government bonds, because investors are increasingly attracted to haven assets. “Yields are being held down by a shortage of risk-free assets as demand for these assets has increased,” Dr Debelle said. Three-year yields fell below two per cent in January, and are now trading at 1.885 per cent. They hit a record low of 1.77 per cent in February.
Australia 200 March 16 at 01:50 GMT 5808 H: 5808 L: 5760
Australia 200 Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 5800 | 5400 | 5150 | 6000 | — | — |
During the hours of the Asian trading session on Monday, the Australia 200 Index is trading in a narrow range right around 5800.
Further levels in both directions:
• Below: 5800, 5400 and 5150.
• Above: 6000.
Economic Releases
- 00:01 UK Rightmove House Price Index (Mar)
- 00:30 AU New motor vehicle sales (Feb)
- 12:30 US Empire State Survey (Mar)
- 13:15 US Capacity utilisation (Feb)
- 13:15 US Industrial production (Feb)
- 14:00 US NAHB Builders survey (Mar)
- 20:00 US Net Long-term TICS Flows (Jan)
- JP BoJ Monetary Policy meeting (to 17th)
- WLD OPEC release monthly oil market report