Talking Points:
- AUS 200 Strategy: Be mindful of a clean break of 4754
- Below which is uncharted territory devoid of technical levels
- No stopping to wild swings in equities until liquidity improves next week
The stock rout resumed in Asian trade after a halt during US session.AUS 200briefly broke lower bound of range and 2-year low at 4754, similar to what happened in the Nikkei index. Question remains on the possibility of a clean breach, which would open up the area consisting of levels last seen in 2013.
AUS has gingerly retracted above 4754 support, although not by far. Next firm support below that is 2013’s low at 4598. Like with Nikkei, the area between 2015’s low and 2013’s low is uncharted territory lacking of strong technical levels. Today’s close will be a critical hint on whether the lower bound could hold.
Traders who are not yet stopped out should keep their stops tight, near support level. Extreme volatility amid Asian thin market will likely induce wild swings until next week.
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--- Written by Nathalie Huynh, Strategist for DailyFX.com
Contact and follow Nathalie on Twitter: @nathuynh
