Australia: S&P/ASX 200 (.AXJO) RBA Governor Lowe Signal in Focus

Australia: S&P/ASX 200 (.AXJO) RBA Governor Lowe Signal in Focus

Australia: S&P/ASX 200 (.AXJO) RBA Governor Lowe Signal in Focus

Bullish momentum continues for the ASX 200, which records a 4th consecutive weekly gain. Subsequently, the index is now testing the 6760-70 resistance zone, which has curbed futures upside for now. Eyes will be on RBA Governor Lowe, which may be key in breaking topside resistance for a test of 6800.

On the downside, initial support is situated at 6710 (prior weeks double top) before the 61.8% Fibonacci retracement at 6685. That said, with the October rate decision now seen as a live meeting for another 25bps rate cut, a confirmation from Governor Lowe could see risks remain tilted to the upside.

Technical Indicators

Overall, the bias in prices is: Upwards.

The projected upper bound is: 6,891.58.

The projected lower bound is: 6,571.39.

The projected closing price is: 6,731.49.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 30 white candles and 20 black candles for a net of 10 white candles.

A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 68.3758. This is not an overbought or oversold reading. The last signal was a sell 0 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 63.49. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 54 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 154.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 4 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 17 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed up 13.300 at 6,730.800. Volume was 86% above average (neutral) and Bollinger Bands were 1% narrower than normal.

Open     High      Low     Close     Volume___
6,717.5006,775.6006,717.5006,730.8001,249,392,384
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 6,672.29 6,625.07 6,282.68
Volatility: 5 16 13
Volume: 793,907,584 684,017,664 640,191,040

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

S&P/ASX 200 is currently 7.1% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect very strong flows of volume into .AXJO (bullish). Our trend forecasting oscillators are currently bullish on .AXJO and have had this outlook for the last 10 periods.

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