Technical Analyst, Saxo Bank
ASX 200 Closed the week below key support at 6,511 dipping lower within a few points from the 0.382 retracement of the 2020-2022 uptrend and 1.3282 projection of the January - April rally.
On the weekly chart, RSI closed well below 40 threshold confirming down trend indicating lower levels are likely.
A bearish move into the Consolidation area between 6,200 – which is also the 1.618 projection level - and 5,775 is likely.
The 0.50 retracement is in the middle of the consolidation area and just a few points above 6,000. ASX is likely to find support around that level.
AUDUSD bounced off support at around 0.6850 retracing before sellers took back control. RSI below 40 no divergence indicating AUDUSD is likely to break the support. IF AUDUSD breaks below there is support at around 0.6775. a break below the falling trend line on the weekly chart is likely to accelerate the down trend.
To reverse that scenario a break above 0.7070 is needed for a move to 0.7120 possibly 0.7180.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.