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ASX 200 Technical Analysis: Index Trading At a Crucial Support Area

ASX 200 Technical Analysis: Index Trading At a Crucial Support Area

2016-08-31 05:23:00
Oded Shimoni, Junior Currency Analyst
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Talking Points:

- Index trading at potential support after a push to the downside

- Key for current levels to hold if bullish control is to remain

- A break below 5,380-5,400 could be interpreted as a bearish sign

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The ASX 200 is trading lower for the sixth consecutive day, after the index failed to hold above a support area around 5,500.

The Index was trading sideways since the beginning of the month, between the 5,500 support and the 5,600 resistance area, which meant that a break below 5,500 could see participants focus on the 5,380-5,400 zone for potential support.

Indeed, the index seems to have found a slight pause to the decline around May swing highs at 5,431.

At this stage, keen buyers might attempt to re-enter the market, which means that reversal signs at this general area may still imply that the downside move was corrective.

A break and hold below 5,380 could be interpreted as a bearish sign with buyers failing to regain control.

It’s important to note that volatility is still printing its lowest levels since September 2014 (based on a 20-day ATR study).

ASX 200 Daily Chart: August 31, 2016

ASX 200 Technical Analysis: Index Trading At a Crucial Support Area

--- 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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