Talking Points:
- AUS 200 Strategy: Buy the dip near lower boundary for range trade
- Momentum signals indicate further downside development
- Range 4754-5043 firmly contains price action
AUS 200 followed London and New York stock markets to slide under a previous triple top at 4918.4, with short-term momentum hinting at further downside. This level may provide a cap to intraday price action. January’s range of 4754-5043 still firmly contains index movements.
Short-term traders could take advantage of the area below 4918.4 for upcoming volatility, all the way toward lower bound of range at 4754. Downside extensions near 4754 may facilitate dip buying.
Choppy trading is not ruled out this week amid thin Asian market, although there is slim chance for AUS 200 to climb back above the previous support trend line.
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Daily Chart - Created Using FXCM Marketscope
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--- Written by Nathalie Huynh, Strategist for DailyFX.com
Contact and follow Nathalie on Twitter: @nathuynh
