Australia 200 (ASX) May Maintain the General Uptrend Amidst Cautious Mood

The Australia 200 index had retreated from nearly 8,400 AUD due to selling pressure from the technology sector. However, a rebound occurred on Monday, bringing the market back in line with the overall uptrend established since October 2023. Meanwhile, today’s trading activity remains in positive territory as investors watch for the US CPI release, a key indicator for future interest rate decisions. This release will likely impact sentiment around the ASX, potentially providing investors with more momentum.

Key Price Levels:

Resistance Levels: AUD 8,400, AUD 8,600, AUD 8,800

Support Levels: AUD 8,200, AUD 8,000, AUD 7,800

Australia 200 Market Forces Respect the General Trend

The ASX market has experienced modest gains since the beginning of the week, keeping the index above the upward-sloping trendline that has been in place since October 2023. However, current price action lies below most of the moving average (MA) lines on the chart.

The most recent green candle appears below the crossover between the 20-day and 100-day MA curves. Meanwhile, the Stochastic Relative Strength Index (RSI) indicates a general downward bias, though the lead line suggests that a trend reversal may be developing. This could result in a significant bounce off the AUD 8,200 support level.

ASX Bulls Sustain Above the 61.80% Fibonacci Retracement Level

Zooming in on the 4-hour chart for the Australia 200 index reveals a pattern of higher lows, signaling bullish activity. However, the 100-day MA line appears to have formed resistance, as price action rebounded off it in the previous session. Despite this, the current session shows that bulls are in control, keeping the index above the 61.80% Fibonacci retracement level.

Additionally, the RSI lines remain in the overbought region, with a crossover confirming bullish strength. However, the indicator’s sideways movement suggests that upside momentum has not yet diminished. Should additional tailwinds emerge from key fundamentals, prices could approach the AUD 8,400 resistance level.

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