Better than forecast Australian data bullish for AU200
Technical Analysis Summary ASX 200 Index: Buy
| Indicator | Value | Signal |
| RSI | Neutral | |
| MACD | Buy | |
| Donchian Channel | Neutral | |
| MA(200) | Sell | |
| Fractals | Buy | |
| Parabolic SAR | Buy | |
| Fibonacci | Buy |
Chart Analysis
On the daily timeframe AU200: D1 is rebounding toward the 200-period moving average MA(200) which is falling. We believe the bullish momentum will continue after the price breaches above the upper Donchian boundary at 5603.71. This level can be used as an entry point for placing a pending order to buy. The stop loss can be placed below 5251.56. After placing the pending order the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the expected profit/loss ratio to the breakeven point. If the price meets the stop-loss level (5251.56) without reaching the order (5603.71) we recommend cancelling the order: the market sustains internal changes which were not taken into account.
Fundamental Analysis of -
Australia’s consumer confidence improved while trade surplus increase bigger than forecast. Will the AU200 rebound continue?
Australia’s economic data in the last couple of weeks were not as bad as feared: unemployment rise in April was not as steep as feared whereas consumer confidence improved in May. The Westpac Bank Consumer Confidence improved 16.4% in May after 17.7% deterioration in April. At the same time unemployment didn’t increase as much as feared: the unemployment rate rose to 6.2% in April from 5.2% in March, when a jump to 8.3% was expected. Furthermore, Australia’s balance of trade surplus rose more than expected: the surplus jumped to A$10.6 billion in March from 3.87 billion in previous month when an increase to 6.8 billion was expected. Better data are bullish for AU200. On the other hand, further deterioration of Australia’s economic performance is a downside risk: the Commonwealth Bank is due to report the composite PMI for Australia on Thursday, and a slight improvement in private business activity is forecast. An accelerating contraction in private sector activities in May will be bearish for AU200.