Talking Points:
- AUS 200 Strategy: (small) trade the rebound for initial target at 23.6% Fibonacci
- Flows around weekend support upside extensions
- Support: 4918 triple bottom. Resistance: 23.6% Fibonacci, then 5200 region
AUS 200 today shows early sign of a rebound from its triple bottom around 4918. This support level is of course still under watch until the rebound proves to last. Short term traders could play this reversal with small target at 23.6% Fibonacci of 5078. Typical profit-taking flows before the weekend may have added to upside extensions.
Those with short positions could investigate profit-taking at opportunistic prices, then re-enter or switch to bullish trade next week. Alternatively, those who prefer to hold shorts should keep their stops tight and get out at repeated failures to challenge the triple bottom.
The index remains largely range-bound. Any breakout on the downside would face 4760-80 firm support area. The 23.6% Fibonacci marks a mid-range level that could be utilised for stops or targets. Above that is 5200 resistance region that topped price action during September.
Losing Money Trading Forex? This Might Be Why.
--- Written by Nathalie Huynh, Strategist for DailyFX.com
Contact and follow Nathalie on Twitter: @nathuynh
