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ASX 200 Technical Analysis: 5,600 Now in Focus

ASX 200 Technical Analysis: 5,600 Now in Focus

Oded Shimoni, Junior Currency Analyst

Talking Points:

- Index finds support at the 5,500 area with pin bar rejections possibly shifting focus to 5,600

- Daily close and a hold above 5,600 may imply that bulls are firmly in control

- 20-day ATR reading at its lowest level since September 2014

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The ASX 200 is trading sideways, between the 5,500 support and the 5,600 resistance area.

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 a break above the 5,380-5,400 resistance, the index rise came to a halt around 5,600 but price action has seen some pin bar rejections at the 5,500 level, potentially indicative of another push higher to test the last high.

Volatility has seen a decline to its lowest levels since September 2014 (based on a 20-day ATR study), perhaps on the backdrop of the “summer lull”.

At this stage, a break above 5,600 may complete the technical bullish picture and indicate the long term uptrend may have resumed, which could signal further bullish intentions.

Short term resistance could potentially be found at 5,700 following a break.

If the index fails to hold above the 5,500 level, support might be found at the aforementioned range highs around 5,380-5,400.

ASX 200 Daily Chart: August 15 2016

--- Written by Oded Shimoni, Junior Currency Analyst for DailyFX.com

To contact Oded Shimoni, e-mail oshimoni@dailyfx.com

Follow him on Twitter at @OdedShimoni

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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