ASX 200 Technical Analysis: 5,500 in Focus For the Short Term
- ASX 200 continues its rally after breaking the 5,380 level
- Index blasted to the upside after forming a bullish reversal pattern at 5,200
- The 5,500 level seems to be in focus in the short term
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The ASX 200 rally continues after the index broke the 5,380 level, retraced to find support again and the index might now eye the 5,500 resistance.
The ASX 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 blasted to the upside after forming a bullish “Morning Star” pattern around the 5,200 support.
The ASX broke higher and retraced to find support at 5,380 again for what now seems like continued upside momentum.
The hold above 5,380 might shift focus for potential initial resistance at 5,500 followed by the 5,570-5,600 zone.
If current conditions change and the index reverses course, eyes will likely be on 5,380 and a move below that level may be interpreted as a bearish development.
ASX 200 Daily Chart: September 29, 2016
--- Written by Oded Shimoni, Junior Currency Analyst for DailyFX.com
To contact Oded Shimoni, e-mail firstname.lastname@example.org
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.