Retreat Finds Support explained by professional Forex trading experts the “ Retreat Finds Support FX trading team.
Retreat Finds Support
The ASX 200 topped 6,000 last week for the first time in a decade, however it has been unable to hang on above that dizzy height even if – by the same token – it hasn’t retreated far either.
There’s some sound fundamental reason for caution. Aussie Inc. hasn’t blown profit forecasts out of the park recently, and the global risk-on exuberance which drove Wall Street to a series of record highs this year has abated somewhat. The last six weeks’ rise has been very impressive. Some pause for thought was surely in order.
Technically speaking the ASX has just broken conclusively below a medium-term uptrend line in place since October 19. It has hardly done so catastrophically for the bulls though, and seems to be settling into a range bordered to the downside by 5911.9. That level has limited intraday lows in the past six sessions and it also coincided with a previous close, that of October 29.
In theory this period of consolidation should end with a return to the status quo ante, which would suggest a rising market and another try to push beyond 6,000.
However, there is clearly no overwhelming appetite to own the index above that level yet, and it may take some sort of leftfield, fundamental shift to bring one on. If 5911.99 gives way, a deeper retracement of the sharp rise up from October 14’s lows will be on the cards.
The first Fibonacci retracement of that rise comes in at 5959.9. That’s only just below current levels so keep an eye on Tuesday’s close which may be instructive if it holds above that line.
Retreat Finds Support Conclusion
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