Australia 200: Enjoys Support From 5800

Australia 200 for Tuesday, April 21, 2015

The Australian 200 index is once again enjoying solid support from the 5800 level which is allowing time and space to rally and return to near the 6000 level. Throughout last week the Australian 200 index showed some positive signs and moved well towards the resistance at 6000 before finishing the week strongly lower. In the immediate term, it will be looking for support at the key 5800 level and at the same time, will remain fixed on the 6000 level. If the 6000 level is broken, it is reasonable to expect a large shift towards bullish sentiment and potentially the index could really take off – it seems as if everyone is just waiting for it to happen. Several weeks ago the Australia 200 index pushed higher to a multi-year high to just above the key resistance level at 6000, before easing lower throughout the last couple of weeks to below 5900. It is receiving ongoing support at 5800, which is helping its latest push towards 6000. The key 6000 level remains firm and a significant obstacle and the index and markets are firmly fixed on it.

Back in mid-March the ASX200 index found some support at the key 5800 level which has propped it up and allowed it to rally a little and move higher, and of course it will be hoping to receive the same again. Back in early March the ASX200 index reversed from its highs near 6000 and started to establish a new medium term down trend before rallying higher a couple of weeks ago. 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. 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.

Australia’s jobless rate unexpectedly fell in March, spurring a jump in the local dollar on optimism the central bank’s effort to shore up the economy with record-low interest rates is paying off. Unemployment dropped to 6.1 percent from a revised 6.2 percent in February, as the number of people employed rose 37,700, the statistics bureau said in Sydney on Thursday. The currency extended gains as traders pared bets on the scale of rate cuts, after the report reinforced data showing improved business confidence in March. The Reserve Bank of Australia kept borrowing costs at 2.25 percent last week, after cutting in February, as it seeks to encourage spending by consumers and companies to offset falling mining investment.

Get The News You Want

Read market moving news with a personalized feed of stocks you care about.

Get The App

(Daily chart below)