ASX 200 Rebounds, But Resistance Looms
The ASX 200 has rebounded from the July low, but resistance around 8800 and 8875 could test the recovery.
Share this:
The ASX 200 has bounced from the July low after falling nearly 7% from its record high, supported by a bullish RSI divergence and firmer Wall Street sentiment. But with resistance clustered around 8800 and 8875, the rebound may soon face a more meaningful test.
- ASX 200 Slides as Oil, Yields and Rate Risks Hit Sentiment
- Crude Oil Rally Running Low on Gas?
- GBP/USD Teases Support Ahead of UK CPI and Fed Decision
- US Dollar Rallies on Hawkish Fed Hike, Though Upside Could be Limited
ASX 200 Rebound Faces Resistance Around 8800
The ASX has fallen nearly 7% since reaching its record high just over five weeks ago. Correlations between sectors and the broader index strengthened sharply as macro themes took hold, but the ASX has since found support around the July low, accompanied by a bullish RSI divergence.
With Wall Street also regaining bullish momentum, the rebound could have further to run over the near term. The daily chart points to 8800 as the main upside pivot, with 8875 the broader resistance level if the recovery extends. Above current prices, the 200-day averages just above 8800 could also provide an important technical test.
Source: ASX, TradingView
- 8775 is the first resistance level, followed by the more important 8800 battleground.
- A clean break above 8800 would bring 8875 into focus.
- On the downside, 8700 is the key support level, with 8675 providing the next line of defence if selling resumes.
- On the daily timeframe, 8600 is the more relevant deeper support should volatility expand materially.
This content was created by an affiliate of FOREX.com and represents the views and opinions of the author/speakers, not the views and opinions of FOREX.com, StoneX Group Inc., or its subsidiaries. The content has not been independently reviewed by FOREX.com.
Source: Forex.com, TradingView
ASX 200 Sector Correlations Ease as Selloff Loses Momentum
The fact that correlations between the ASX and its sectors are no longer at extremes could be a sign that the worst of this phase of the selloff is behind us. This could mean lower volatility and choppier price action than we saw during the recent decline.
That is useful information when managing expectations and choosing strategies. And with the weekend approaching, intraday setups may be preferable, alongside tighter risk management and more conservative targets. We can then reassess conditions next week.
Source: LSEG
Related tags:
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
USD/JPY forecast: US dollar strengths amid hawkish Fed despite recent oil weakness
The US dollar has extended its gains this morning, even if oil prices finished lower for the fifth consecutive day yesterday. Oil prices have bounced back in this first half of today’s session, causing a bit of pressure on currencies that rely on energy imports such as the euro, pound, Swiss franc, and Japanese yen. But it was the dollar that was exerting the most pressure, amid hawkish FedSpeak. Meanwhile, European indices and precious metals were also under a bit of pressure amid the strength of the dollar.
USD/JPY and USD/CHF Could Diverge as CHF/JPY Approaches Resistance
USD/JPY and USD/CHF retain bullish structures, but CHF/JPY resistance could expose a divergence between the two US dollar pairs.
EUR/AUD, GBP/AUD Outlook: Rates, risk and metals reinforce bearish technical case
EUR/AUD and GBP/AUD are coiling near support, with recent correlations suggesting the Aussie’s strength is being driven more by rates, risk and metals than energy.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.