Talking Points:
- Strategy: Prepare for a test of the resistance level
- Strong upward momentum indicates upside development ahead
- Support levels are at 5074, then 4918.4
The ASX 200 is heading up to a 3-month high of 5227 which previously capped the mid-March rally. Strong upward momentum signals point to further upside development, although it is unclear whether the index could break through resistance. An immediate support level comes in at 5074, followed by a firm support level at 4918.4.
Investors who look to trade the range may find opportunities as the ASX approaches resistance level, or even reverses down after failures to break. Those who are waiting to trade an uptrend may find strong hindrance ahead as the index is getting closer to the upper boundary of a range that has contained price action since August 2015.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Nathalie Huynh, Strategist for DailyFX.com
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