The Australia 200 market has seen a good comeback after price action hit strong support at the 8,420 level. However, the market has not been moving much lately due to counterbalancing forces. Let’s examine how the market may proceed below.
Key Price Levels
Resistance: 8,700, 8,825, 9,000
Support: 8,600, 8,400, 8,200
Australia 200 Market Holds Above the 9-day EMA
Price activity in the ASX 200 market broke through the 9-day Exponential Moving Average (EMA) curve three sessions ago. However, price action has remained at roughly the same level since then. The positive aspect is that downward forces are not prevailing, as the market is simply consolidating sideways.
The Stochastic Relative Strength Index (SRSI) indicator lines appear extended because price action has not moved significantly. Consequently, this suggests that upside forces are weakening. Also, the SRSI appears to be converging in the overbought region, indicating that a downward crossover may be near.
ASX 200 Seems Quietly Yielding to Downward Forces
The Australia 200 market on the 4-hour chart is beginning to show that downward forces are gradually gaining ground. The latest price candle on the futures 4-hour chart is red. Although it looks like a mild contraction, it still stands above the 9-day EMA curve.
Meanwhile, the SRSI indicator lines appear to have delivered another upside crossover just above the 20 level of the indicator. The ensuing lines are still moving sideways for now. Considering that price action remains above the 9-day EMA and the SRSI recently formed an upside crossover, the market still has upside potential and may proceed toward the 9,000 ceiling.
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