Talking Points:
- Strategy: Be mindful of a retracement below the 3-month high
- Upward momentum showed sign of exhaustion
- The index remained range-bound with the upper bound being 50% Fibonacci
The ASX 200 successfully broke above a 3-month high and resistance level at 5227. However, the upward momentum showed sign of exhaustion, as we predicted in the previous article. Downside risk may develop if momentum signals continue to wane into next week.
Investors may take caution with their stop loss and target levels, in case the ASX retraces below 5227 level once more. Upside potential remains limited, with a firm resistance and 50% Fibonacci at 5391.5. The index remains largely range-bound.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Nathalie Huynh, Strategist for DailyFX.com
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