Talking Points:
- AUS 200 Strategy: Hold on to short, keep stop up-to-date
- Strong downturn within the range 4918.4-5074
- Price action looks to repeat January- February’s top and bottom
After falling to break 5074 resistance, the current downward reversal in AUS 200 shows no sign to halt yet. It is trading below a past technical level of 4918.4 on a fourth day of declines. A firm support level ahead is 4754, which is unlikely to be broken after the last two failed attempts.
Range traders who sold near the upper bound earlier may adjust stop loss to preserve gains. On the other hand, the index has not hit bottom thus potential dip buyers may need to wait until next week. If price comes to test support level (and fail), that will make for a new triple bottom at 4754.
There is still room for topside retracement above 4918.4 resistance level, should range-bound pattern diverts. Firm resistance is at 5074.
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--- Written by Nathalie Huynh, Strategist for DailyFX.com
Contact and follow Nathalie on Twitter: @nathuynh
