Technical Analyst, Saxo Bank
Summary: ASX 200 has bounced from key support area. The correction could be over but it will be a struggle to resume uptrend. 6,900 is key level
ASX 200 is bouncing from support around 6,905 despite having dipped just below and now seems to lay the foundation for a short-term uptrend.
RSI indicated divergence i.e., the downtrend in February-March had exhausted. RSI has closed above its falling trendline suggesting ASX200 could bounce to 0.618 retracement and resistance around 7,190. However, a spike up to around 7,268 should not be ruled out. Minor resistance at 7,076.
If ASX 200 takes out last week’s lows at 6,895 downtrend will resume with no strong support until around 6,645.
Medium-term. ASX 200 is currently back above the cloud (shaded area) and if closing the week above the bullish trend is set to resume. RSI is still showing positive sentiment and has bounced from 40 threshold.
If ASX closes above 7,370 the medium-term uptrend is further confirmed with a likely test of previous all-time high to follow.
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