FTSE ASFA Australia 200 for Thursday, June 19, 2014
Over the last couple of weeks the Australian 200 Index has slowly fallen back and broken back down through the key 5500 level towards a four week low around 5400 where it has found some support over recent days. It moved lower strongly to finish out last week and will now look at the support level at 5400 to provide some assistance in rallying back to the key 5500 level. In the couple of weeks prior 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 few weeks 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 Leading Indexes were listless in May, and point to a slowdown in the economy. The MI Leading Index managed a paltry gain of 0.1%, its highest level in 2014. The CB Leading Index posted a decline of 0.1%, its worst showing since last September. Australia's key export sector is being squeezed by falling commodity prices while the high Australian dollar is making Australian goods less competitive on global markets. At the same time, consumer confidence and spending remains at very low levels. If key economic data points downward, the high-flying Aussie could lose ground.
(Daily chart below)
Australia 200 June 19 at 00:40 GMT 5405 H: 5405 L: 5405
Australia 200 Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 5400 | 5300 | 5000 | 5550 | --- | --- |
During the hours of the Asian trading session on Thursday, the Australia 200 Index will again be trying to rally and use the support from the 5400 level after falling heavily back down to there over the last few days to finish out last week. 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
- 04:30 JP All Industry activity index (Apr)
- 05:00 JP Leading indicator (Final) (Apr)
- 08:30 UK Retail Sales (May)
- 10:00 UK CBI Industrial Trends (Jun)
- 12:30 US Initial Claims (14/06/2014)
- 14:00 US Leading Indicator (May)
- 14:00 US Philadelphia Fed Survey (Jun)