ASX 200 Technical Analysis: Five Week Rally Carries On
- Index might be heading to 5,700 for possible resistance
- A move below 5,570 could put focus on 5,500
- Another positive week will mark the longest winning streak since 2013
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The ASX 200 surge higher continued for the fifth consecutive week. The index has seen impressive conviction to the upside and broke the range bound “structure” with a move above the 5,380-5,400 resistance.
The index was 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 leg from 2012.
After moving above the range top resistance, the ASX continues to print new 2016 highs, and has yet to see a compelling corrective dip for more favorable bullish entries. Another positive week will mark the longest winning streak since 2013.
At the time of writing, the index is trading above an area of resistance around 5,570-5,600, with the next possible resistance sitting at the 5,700 level, which is around the August 2015 highs. A failure to hold above 5,570 could indicate a correction might be taking place.
As price moves higher buyers might be tempted to take profits off the table. A move lower could put focus on 5,500 or 5,380 for possible support. A “higher low” at this stage will complete the technical bullish picture and indicate the long term uptrend may have resumed.
ASX 200 Daily Chart: August 1, 2016
--- Written by Oded Shimoni, Junior Currency Analyst for DailyFX.com
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.