ASX 200 Technical Analysis: Failure to Break 5,380 Range Top
- The ASX 200 is contained inside a range below resistance at 5,380
- Failed attempt at a break might imply a move lower
- Long term up-trend may be resuming if the index finds upside conviction
The ASX 200 reversed after posting a high for the year this Wednesday, and now appears to have failed the break-out attempt of a range top resistance at 5,380. The price has been trading for the past 9 months in a well-defined range between the 5,380 resistance and the 4,750 support, which coincided with the 0.618 Fib level of the long term up trend from 2012.
The index appears to have rejected higher prices at the time of writing, which means the price is contained inside the range at this time, perhaps implying that a move lower is of higher likelihood. If this is the case, focus may be put on the 5,200 support zone, from which it appears the last attempt higher was initiated.
However, should the index find some interim support and hold price in proximity to the range top, this might imply buying pressure which may signal further tests of the resistance level are ahead. A break above 5,380 might signal that the bulls have taken control, and that the long term up trend is resuming.
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ASX 200 Daily Chart: May 13, 2016
--- Written by Oded Shimoni, DailyFX Research
To contact Oded Shimoni, e-mail firstname.lastname@example.org
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.