Talking Points:
- Index finds resistance around 15,600
- Price trading sideways between 5,500 and 5,570 since the beginning of the month
- 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 (5,570-5,600).
Volatility has seen a decline to its lowest levels since September 2014 (based on a 20-day ATR study), perhaps due to the “summer lull”.
Against this backdrop, the technical picture appears quite clean, as a break to either side of this trading range could prove influential:
A clear move above 5,600 could indicate the long term uptrend may have resumed and signal further bullish intentions, possibly exposing the 5,700 level for potential resistance initially.
A break below the 5,500 area seems likely to shift focus to possible support around the 5,380-5,400 zone, which might still be seen as corrective within the context of the last months rally higher.
ASX 200 Daily Chart: August 18 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
