Australia 200: Desperately Trying To Move Away From 5500 Level
MarketPulse | May 28, 2014 03:42AM ET
Australia 200 For Wednesday, May 28, 2014
To start this week the Australia 200 Index moved away a little from the key 5500 level and is trying to move towards 5550. Over the last month or so, 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. During last week, 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. Throughout the last few weeks it has been placing ongoing pressure on the resistance level at 5500 and a couple of weeks ago it was finally able to move through to a three week high before easing back again to this key level. Several weeks ago it slowly but surely eased away from its multi-year high achieved near 5560, however the following week it fell reasonably sharply and started looking towards the 5400 level which is near where it currently sits. In doing so, it returned to back under the key 5500 level which has provided some reasonable resistance over the last few months.
For the bulk of the last few months, the Australia 200 Index has traded roughly between 5300 and 5500, therefore its return to back under 5500 was not surprising. The index has done well over the last couple of months to move steadily higher from support around 5300 up to beyond 5500, forming higher peaks and higher troughs along the way. The support level at 5300 may also be called upon should the index fall lower and will also likely play a role in providing some buffer from any decline. Since February, most of the trading activity has occured between 5400 and 5500 therefore the former level may also be called upon to prop up prices. The index has done very well over the last couple of years moving from below 4000 to its present trading levels around 5500.
Prime Minister Tony Abbott denies he’s facing internal party backlash on his budget and won’t surrender it in the face of pressure to compromise over its most unpopular measures. Mr Abbott is confident the coalition’s first budget will pass the Senate because the alternative would be a double dissolution election. Senior government ministers have signalled compromising on key budget reforms such as higher education interest rates and the GP co-payment, amid a fierce public backlash and a hostile Senate. Continuing the budget sell, Mr Abbott said his team “absolutely” understood the “iron necessity” of sticking with difficult and unpopular budget measures. “We are not going to surrender our budget commitments,” Mr Abbott told reporters in Adelaide. But negotiations were inevitable. “You have got to negotiate your legislation through the parliament,” he said. Mr Abbott was confident that the government would get the budget through the Senate in the end, because the alternative would be a double dissolution election.
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Australia 200 May 28 at 03:10 GMT 5540 H: 5546 L: 5529
Australia 200 Technical
During the hours of the Asian trading session on Wednesday, the Australia 200 Index is trying to push higher after slowly plodding higher towards 5550. 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 few weeks.
Further levels in both directions:
• Below: 5400, 5300 and 5000.
• Above: 5550.
Economic Releases
- 00:30 AU Westpac-MI Leading Index (Apr)
- 01:30 AU Construction Work Done (Q1)
- 08:00 EU M3 Money Supply (Apr)
- 09:00 EU Business & Consumer Survey (May)
*All release times are GMT
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