ASX 200 Technical Analysis: Rally Continues Post Breakout
- ASX 200 continues its rally after breaking the 5,380 level
- Index found support around 5,200 and formed a bullish reversal pattern
- Key initial resistance ahead seems to be 5,500
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The ASX 200 upside momentum continues after the index managed to break the 5,380 resistance level.
The index was trading in a well-defined range between the 5,380 resistance and the 4,750 support until July saw a breakout higher, followed by a sharp decline back inside that range.
The index formed a bullish “Morning Star” pattern around the 5,200 support, and found clear conviction since to reclaim the 5,380 resistance, with momentum still looking strong.
A hold above 5,380 seems likely to shift focus for potential initial resistance at 5,500 followed by the 5,570-5,600 zone.
With that said, a failure to hold above 5,380 may be interpreted as a bearish development, and might have eyes on the 5,300 support followed by the last swing low.
ASX 200 Daily Chart: September 26, 2016
--- Written by Oded Shimoni, Junior Currency Analyst for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.