ASX 200 Outlook: 8700 Battleground as Bears Maintain Control

The ASX 200 is approaching a critical inflection point, with price pressing into the 8700 support zone after its most bearish run since June. While oversold conditions raise the risk of a near-term bounce, futures positioning and rising open interest suggest sellers remain in control. Traders now face a clear decision point: whether support can stabilise price in the short term, or give way to a deeper move lower.

View related analysis:

ASX 200 Tests 8700 Support as Bearish Momentum Holds

ASX 200 Market Snapshot

The ASX 200 cash market fell for a fifth consecutive day – its most bearish daily sequence since June
9 of its 11 sectors declined – led by XUJ Utilities (-2.8%) and XEJ energy (-1.9%), XMJ materials (0.6%) led the two higher though healthcare was effectively flat
The average daily range for the ASX on Tuesdays has been 109.2 points over the past three months, well above its 788.9 average over the past year
The ASX is tracking the DAX and FTSE lower and being left for dust by Wall Street, with the S&P 500 and Nasdaq reaching fresh record highs heading into tech earnings

Source: ASX, LSEG

ASX 200 Correlations Signal Short-Term Noise, Longer-Term Risk Alignment

Short-term (3-day): correlations unstable — ASX moving inversely to several markets → choppy, headline-driven trade
10–20 day: mixed signals — strong links to gold and FTSE, but divergence from US indices
60-day: broader risk-on alignment — ASX still positively correlated with global equities
Takeaway: near-term noise, but bigger picture still tied to global risk sentiment

Source: ASX, LSEG

ASX 200 Technical Analysis

ASX 200 Slides Toward Key Support As Momentum Weakens

The daily chart shows the ASX 200 cash index declined for a fifth consecutive session on Monday — its most bearish run since June. The RSI (2) has been heavily oversold for several days, while the 200-day EMA sits nearby alongside the 8700 options barrier and prior swing lows, highlighting a potential support zone.

These factors point to a possible swing low, but with SPI 200 futures trading lower overnight and open interest rising — suggesting fresh shorts are entering — bulls may need to remain patient before stepping in.

ASX 200 Tests 8700 Support As Downside Pressure Builds

The ASX 200 is in a short-term downtrend, with futures pointing lower again and momentum rolling over. While 8900 remains a clear ceiling, the focus shifts to whether downside support can hold. Put positioning is clustered between 8750 and 8700, but it’s not especially strong at 8800 — leaving room for price to probe lower before finding firmer support.

That puts the spotlight on 8700 as the key floor, where stronger downside protection sits. Any bounces toward 8875 are likely to fade, keeping pressure on the downside unless we see clear acceptance back above resistance.

Source: ASX, TradingView

Futures Signal Bearish Pressure Into Key 8700 Support Zone

The ASX futures chart (left) shows open interest rising as prices fall, suggesting bears are driving the move rather than longs covering. The intraday ASX chart (right) highlights a confluence of support between 8663–8687, where the monthly pivot point, weekly S1, and prior swing lows align — making this a key zone to watch after the open.

With strong options positioning around 8700, bears may want confirmation before calling a sustained breakdown. A failure to hold below support could instead trigger a near-term bounce towards the weekly pivot point (8845).

Pivotal zone around 8700 is key in the near term
Break below 8700 opens downside towards 8660s support cluster
If support holds, risk of a bounce towards ~8850
Bias: near-term bounce, but rallies likely to fade below 8900

Source: ASX, ASX24, TradingView

View the full economic calendar

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Products and services available depend on your location and the entity holding your account. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.

Contracts for Difference (CFDs) are not available to US residents.

FOREX.com is a trading name of GAIN Capital - FOREX.com Canada Limited, 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA is a member of the Canadian Investment Regulatory Organization and Member of the Canadian Investor Protection Fund. GAIN Capital – FOREX.com Canada Limited is a wholly-owned subsidiary of StoneX Group Inc.

Complaints are taken very seriously at FOREX.com. You can view our complaints procedure here.

Know your advisor