Talking Points:
- Index gapped above the 5,200 prior support turned resistance
- The ASX 200 appears to be testing the 5,300 level for possible resistance
- A break above 5,300 could potentially expose the 5,380 range top level
Learn Good Trading Habits with the “Traits of Successful Traders” series
The ASX 200 currently trades below the 5,300 prior support, and now appears to test the level for resistance.
Following six consecutive days of declines, the index closed last week above its 200 day SMA after bouncing from the 5,100 support. The index gapped higher above possible resistance at 5,200 on market open, alongside sentiment linked currencies.
The ASX 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.
At this stage, it looks like the index might be testing the 5,300 level which could cap gains on a “support turned resistance” basis. If that’s the case, focus may be put on the 5,200 level again for support.
A move below 5,200 could potentially put the spotlight on possible support at 5,100, followed by the 5,000 handle.
With that said, if the index manages to move higher and close above 5,300 this might put the focus again the long term range top at 5,380.
ASX 200 Daily Chart: June 21, 2016
--- Written by Oded Shimoni, Junior Currency Analyst for DailyFX.com
To contact Oded Shimoni, e-mail instructor@dailyfx.com
