Never miss a story from David Cottle

Subscribe to receive daily updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from DailyFX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to David Cottle

You can manage your subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

ASX 200 Technical Analysis Talking Points:

  • The ASX made a new high for 2019 last week
  • However, the retreat from that top took it below its uptrend channel
  • That need not be terrible news but bulls need to hang on

Get live, interactive coverage of all major Australian economic data at the DailyFX Webinars

The ASX 200 shows tentative signs of exhaustion on its daily chart as a new week gets under way and so the next few sessions could prove to be most instructive.

The Sydney blue-chip benchmark crept below the well-respected uptrend channel which has marked the ascent from the lows of December on a daily closing basis last week for the first time ever. This is not yet a major setback for the bulls, however, as, given the length and strength of the rise, some consolidation was probably in order.

ASX 200 Index, Daily Chart

However, the magnitude of any immediate retracement will probably be a key directional clue. If falls can be limited to a support zone near at hand between 6126 and 6040 then they will probably seen as a healthy pullback in an overbought market and, conceivably, a platform for further gains.

That trading band held the index between February 6 and 20 last year. Although that period was marked by the small daily ranges which can indicate a degree of indecision, it also encompasses the 6069 point which is the first, 23.6% Fibonacci retracement of the rise up from those December lows to 2019’s peak- 6285.3.

If that gives way on a daily or weekly close, then things could be getting more serious for the bulls. The next retracement level comes in at 5935.3 but, given the crucial psychological importance of the 6000 level to this index, the surrendering of that point could see 50% retracement at 5827 come into rapid focus.

The ASX is also showing some signs of topping out on its monthly chart, with the clear risk of a lower low being made below last August’s peak. This will also bear watching.

ASX 200, Monthly Chart

Resources for Traders

Whether you’re new to trading or an old hand DailyFX has plenty of resources to help you. There’s our trading sentiment indicator which shows you live how IG clients are positioned right now. We also hold educational and analytical webinars and offer trading guides, with one specifically aimed at those new to foreign exchange markets. There’s also a Bitcoin guide. Be sure to make the most of them all. They were written by our seasoned trading experts and they’re all free.

--- Written by David Cottle, DailyFX Research

Follow David on Twitter@DavidCottleFX or use the Comments section below to get in touch!