The Australia 200 Index is currently trying to rally higher as it is relying upon support at the 5400 level yet again and falling sharply back in the last day or so. Over the last couple of weeks the Australian 200 Index has fallen and broken back down through the key 5500 level towards a four week low around 5400 before consolidating and rallying slightly higher. These two levels have firmly established themselves as significant and any substantial break to either side will most likely be a significant move and be closely monitored. It is quite likely many are sitting on the sidelines waiting for the break before committing as they continue to watch the index move between these two levels. A few weeks at the end of May, it moved back and forth between the two key levels of 5500 and 5550 before the recent fall.
Over the last couple of months the Australia 200 Index has formed an amazing attraction to the key 5500 level as it spent a considerable amount of time trading around it. A couple of weeks ago, the index fell away heavily back down to support around 5400 before returning to the key 5500 level just as quickly, as if gravity had pulled it back. Throughout the last couple of months it has been placing ongoing pressure on the resistance level at 5500 and a few weeks ago it was finally able to move through to a three week high before easing back again to this key level. Several weeks ago it slowly but surely eased away from its multi-year high achieved near 5560 however the following week it fell reasonably sharply and started looking towards the 5400 level which is near where it currently sits. In doing so it returned to back under the key 5500 level which has provided some reasonable resistance over the last few months.
For the bulk of the last few months, the Australia 200 Index has traded roughly between 5300 and 5500 therefore its return to back under 5500 was not surprising. The index has done well over the last couple of months to move steadily higher from support around 5300 up to beyond 5500, forming higher peaks and higher troughs along the way. The support level at 5300 may also be called upon should the index fall lower and will also likely play a role in providing some buffer from any decline. Since February, most of the trading activity has occured between 5400 and 5500 therefore the former level may also be called upon to prop up prices. The index has done very well over the last couple of years moving from below 4000 to its present trading levels around 5500.
Australian households will keep on paying the carbon tax from July 1 — and the bill will be even bigger. Under laws brought in by the former federal Labor government, the so-called “price on pollution” will rise by five per cent from next week to raise an estimated $11.8 million a day from electricity generation alone. There is now no chance the Coalition’s legislation to axe the tax will pass Parliament prior to its preferred end date of July 1 because until then Labor and the Greens have blocking numbers in the Senate. While some major electricity retailers have vowed to refund carbon tax collected from the start of the new financial year, not all have or will. Origin Energy, which has 4.3 million customers Australia-wide, would not commit yesterday. It may ultimately decide to do so, but smaller retailers — which combined hold 20 per cent of the market — may not. “They (smaller retailers) probably can’t pass back if they don’t get it (back) from generators,” a senior energy industry source said. Electricity generators pay carbon tax, which they recoup from retailers who then charge it to consumers.
Australia 200 June 25 at 02:55 GMT 5401 H: 5411 L: 5379
Australia 200 Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 5400 | 5300 | 5000 | 5550 | --- | --- |
During the hours of the Asian trading session on Wednesday, the Australia 200 Index is trying to rally back higher after threatening to break through the lower support level at 5400 in the last day or so. For most of this year the Australia 200 Index has moved well from the lower support level at 5000 up to the multi-year highs above 5500 in the last month or so.
Further levels in both directions:
• Below: 5400, 5300 and 5000.
• Above: 5550.
Economic Releases
- 10:00 UK CBI Distributive Trades (Jun)
- 12:30 US Core PCE Price Index (3rd Est.) (Q1)
- 12:30 US Durable goods orders (May)
- 12:30 US Durables ex defence (May)
- 12:30 US Durables ex transport (May)
- 12:30 US GDP Annualised (3rd Est.) (Q1)
- 12:30 US GDP Price Index (3rd Est.) (Q1)