Australia 200 for Tuesday, February 17, 2015
In the last month or so the Australian 200 index has done very well and surged higher to move back above the key 5400 level to reach a new six year high just shy of 5900 in the last few days. In the last day it has retreated however found solid support at the current key level of 5800. In the couple of weeks leading up to the new high, it spent a week or so battling with resistance at the key 5800 level which repeatedly fended off the index, resulting in it easing back a little. Several weeks ago saw the resistance at 5500 stand tall and fend off all advances, however this now been broken strongly through. The recent move higher from below 5300 to above the key level of 5400 is important as it desperately tries to hang on to this important trading range for the index above 5400. In the week prior, the Australia 200 Index eased back again under the 5400 level after making numerous attempts to clear it over the last month, which saw it drop to a three week low below 5250 before its recent surge higher.
The moderate support from around the 5300 level held it up well for a a couple weeks before the surge higher. The short-term resistance level at 5500 has returned and now resumes its role of placing selling pressure on the index. Throughout most of November and December, the Australia 200 Index fell steadily lower down towards support around 5150 and two month lows before rallying back above 5400 again. Over the last few weeks the Australia 200 index has struggled with resistance at 5400 which has forced it lower time and time again. The 5400 level has been a major player for the last 12 months and the index must get back above this level to encourage more buying and bullish sentiment. It enjoyed a solid resurgence throughout October after getting much needed support from the 5200 level, which has resulted in it moving back above the 5400 and 5500 levels, around a two month high.
Throughout most of September the Australia 200 Index declined strongly from its multi-year high after running into resistance around 5650 back to enter its previously established trading range between 5400 and 5500, before falling further below 5200 and to an eight month low around 5120 a few weeks ago. Several weeks ago it received solid support from the 5100 level which saw it rally well to close out a couple of weeks ago. Back in early September the 5400 level was called upon to offer support as the index desperately tried to stay in touch with its range, however it fell through there before rallying strongly back up to 5400. Up until recently, the 5400 level had done well and propped up price to keep it within the range. In its recent fall at the beginning of August it moved down to a three week low around 5375, however it received solid support at the 5400 level which has allowed to consolidate and rally higher.
RBA Governor Glenn Stevens said the economy’s growth will remain lower for longer and policy easing may be less effective than in the past. “The economy needs a bit more growth than we currently have,” Stevens told a parliamentary panel in Sydney today. “The board is also very conscious of the possibility that monetary policy’s power to summon up additional growth in demand could, at these levels of interest rates, be less than it was in the past.” The central bank ended a 17-month pause and cut interest rates this month to a fresh record-low of 2.25 percent as it tried to boost confidence and encourage hiring in an economy where unemployment has risen to a 12 1/2-year high. The economy is on track to record an expansion below its potential for six of the past seven years, the longest stretch since the last recession in 1991.
(Daily chart below)
Australia 200 February 16 at 22:00 GMT 5847 H: 5869 L: 5798
Australia 200 Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 5800 | 5400 | 5150 | 5900 | — | — |
During the hours of the Asian trading session on Tuesday, the Australia 200 Index will be looking to rally off the support at 5800 and attempt to move back through 5900 again.
Further levels in both directions:
• Below: 5800, 5400 and 5150.
• Above: 5900.
Economic Releases
- 23:30 (Mon) AU Westpac-MI Leading Index (Jan)
- 00:30 AU RBA minutes released
- 08:00 EU EU Finance Ministers Hold Meeting in Brussels
- 09:30 UK CPI (Jan)
- 09:30 UK Input & Output Prices (Jan)
- 09:30 UK ONS House Prices (Dec)
- 10:00 EU ZEW (Economic Sentiment) (Feb)
- 13:30 US Empire State Survey (Feb)
- 15:00 US NAHB Builders survey (Feb)
- 21:00 US Net Long-term TICS Flows (Dec)
- JP BoJ Monetary Policy meeting (to 18th)