ASX 200 Technical Analysis: Rise Puts 2019 Peak Back In Focus
ASX 200 Technical Analysis Talking Points:
- The ASX has risen above its previously dominant downtrend channel
- It is closing in on the recent significant peak, but has yet to get there
- Gains do depend on fundamental risk appetite however, and this is volatile
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The ASX 200 has ridden this week’s wave of resurgent global risk appetite above the downtrend channel which had previously held since the peaks of March 8 which are also this year’s highs.
The Sydney mainboard has now been above that channel’s upper boundary for three sessions. Still, for all this new-found bullishness it has yet to top that peak, even though it is close at current market levels.
The index is now in a range limited by March 8’s intraday high of 6284.6 and its close, 6239.9. If the bulls can demonstrate comfort within this range over the next few days, then it could well be a sign of bullish consolidation and a prelude to a push still higher.
If so that would put focus on the multi-year highs scaled last August in the 6380 region. However, it is worth noting that those peaks did not hold for long, with sellers soon emerging in force, as it often tends to whenever this index spends too much time above the psychologically crucial 6,000 mark.
Still, if the ASX can consolidate around current levels a retest of those highs does look likely.
On the other hand, setbacks are likely to find initial support around last week’s lows in the 6100 region. This may not stand up to a vigorous bear test, however. A more enduring prop may be found at 6057.6. That is the first, 23.6% Fibonacci retracement level of this year’s rise.
Below that comes 5916.8, the second, 38.2% retracement, but that might not stop any fall through the 6000 point for long.
It is worth remembering, however, that much of the current bullishness has its roots in overall, global risk appetite and, with many uncertainties around, from the US/China trade position to Brexit, this is likely to be a shaky foundation.
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--- Written by David Cottle, DailyFX Research
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.