Short-term technical outlook Australia 200 Index (Fri, 24 Aug)
Key technical elements
- The on-going medium-term uptrend of the Australia 200 Index (proxy for the ASX 200 futures) in place since 04 Apr 2018 low of 5701 is now at risk of breaking down after a test and retreat from the 6380 upper limit of the medium-term neutrality range on 17 Aug 2018, U.S. session. Click here for a recap of our latest weekly technical outlook.
- Current price action has started to exhibit bearish elements; the Index has broken below the medium-term ascending channel support from 04 Apr 2018 now turns pull-back resistance at 6285 when also confluences with the upper boundary of the minor descending channel in place since 17 Aug 2018 (see daily & hourly chart).
- The Index has also traced out a minor bearish reversal “Head & Shoulders” configuration in place since 09 Aug 2018 with the neckline support at 6230 that confluences closely with the 23.6% Fibonacci retracement of the up move from 04 Apr 2018 low to 17 Aug 2018 U.S. session high of 6380.
- The significant short-term supports are at 6183 followed by 6150 (the former medium-term swing high areas of 10 Jan/ 10 May 2018, a Fibonacci retracement/projection cluster and the exit potential of the impending minor bearish reversal “Head & Shoulders” breakdown.
- The daily RSI oscillator is now attempting to stage a bearish breakdown from its corresponding significant support at the 50% level. These observations suggest a potential reversal in medium-term momentum from positive to negative.
Key Levels (1 to 3 days)
Intermediate resistance: 6264
Pivot (key resistance): 6285
Supports: 6230, 6183 & 6150/140
Next resistance: 6325/335
Therefore, as long as the 6285 short-term pivotal resistance is not surpassed and a break below 6230 is likely to add impetus for a further potential push down to target the next near-term supports at 6183 and 6150/140 in the first step.
On the other hand, a clearance above 6285 negates the bearish tone for a continuation of the corrective rebound to retest the next resistance at 6325/335 (former minor swing high area of 15 Aug 2018 & 61.8% Fibonacci retracement of the on-going decline from 17 Aug 2018 high to today, 24 Aug 2018 current intraday low of 6235.
Charts are from City Index Advantage TraderPro
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.