Australia 200 for Wednesday, January 14, 2015
The last few days has seen the Australia 200 Index ease back again under the 5400 level after making numerous attempts to clear it over the last month. 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.
Home loan approvals in Australia unexpectedly fell in November as policymakers try to cool down an investment-led housing boom. Total home loan approvals fell 0.7 per cent in November, versus predictions for a 1.7 per cent gain. The slide follows a downwardly revised 0.2 per cent gain in October, said the Australia Bureau of Statistics. The value of mortgage loans to investors fell by 2.2 per cent, breaking a five-month upward streak. That’s the biggest fall since last January. A 1 per cent gain the prior month was also cut in a half, in revisions. In recent months the Australian Prudential Regulation Authority has been increasing its scrutiny of the lending market, as policymakers become concerned that it had become unbalanced due to speculative demand. In December the APRA tried to persuade banks to cap lending growth to investors at 10 per cent a year.
(Daily chart below)
Australia 200 January 13 at 22:05 GMT 5350 H: 5420 L: 5339
Australia 200 Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 5150 | 5100 | — | 5400 | 5650 | — |
During the hours of the Asian trading session on Wednesday, the Australia 200 Index will be trying to reverse and rally back above the key 5400 level.
Further levels in both directions:
• Below: 5150 and 5100.
• Above: 5400 and 5650.
Economic Releases
- 23:50 (Tue) JP CGPI (Dec)
- 23:50 (Tue) JP Key Machinery Orders (Nov)
- 10:00 EU Industrial production (Nov)
- 13:30 US Import Price Index (Dec)
- 13:30 US Retail Sales (Dec)
- 15:00 US Business inventories (Nov)