ASX 200 Technical Analysis: 5,300 in Play After Failed Breakout
- The ASX 200 currently trades below long term range top levels at 5,380-5,400
- Failure to hold above those levels might imply a move lower
- Index now hovering above the short term 5,300 support level
The ASX 200 is trading below key levels at 5,380-5,400 (at the time this report was written) as the index appears to have failed an attempt to break out of a long term range.
The ASX 200 has been trading for the past 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.
After holding above the range top levels for four consecutive days, the index stalled at 2016 highs, before losing conviction and turning lower below 5,380. The failure to hold above the range top might imply further momentum to the downside.
With that being said, the index is now trading near the 5,300 short term support level that proved influential in the last couple of weeks. If buyers come back at that area, it might imply another test higher is ahead.
A clear break and a hold above 2016 highs at 5,431 might signal that the bulls have taken control, and that the long term up trend is resuming.
A move below 5,300 may expose the 5,200 support zone, from which it appears the last leg to the upside was initiated.
ASX 200 Daily Chart: June 1, 2016
--- Written by Oded Shimoni, DailyFX Research
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.