ASX

ASX 200 At Three Month Lows – Negative Rates On the Table

ASX 200 index continues lower for the fourth straight session. The correction has accelerated after the index breached below the 100-day moving average the previous week. The sharp correction in Wall Street weighs on risk appetite amid concerns over the delay of a new stimulus package. Rising new coronavirus cases in USA and Europe threatens the economic recovery around the globe. Boris Johnson will announce today new restrictions measures closing the restaurants and pubs at 10 pm. Meanwhile, delays in the coronavirus vaccine production and a global banking scandal also weigh on risky assets.

RBA Assesing FX and Intervention and Negative Rates

Reserve Bank of Australia Deputy Governor Debelle, said that the central bank is assessing all monetary policy options including currency market intervention and negative interest rates to meet its employment and inflation goals and to support the coronavirus battered economy. AUDUSD is under pressure after the Debelle comments and is trading 0.25% lower at 0.7204. 

Banks were under pressure in Australia, on reports that global banks continue to profit from illicit money despite the strict regulations on money laundering. Mining and energy shares were also under pressure after the sharp drop in commodities and crude oil prices. 

ASX 200 Analysis

ASX 200 ended 0.64% lower at 5,785, making fresh three month lows. The technical picture had deteriorated since the previous week when the index breached below the 100-day moving average. 

ASX 200 first support stands at 5,763 the daily low. Next support is at 5,724 the low from June 18. If the bear’s break that support the next level to watch is 5,612 the low from May 26. 

On the contrary, resistance for ASX 200 would be met at 5,822 the daily high. More sellers wait at 5,866 the top from yesterday’s trading session. The critical resistance is the 100-day moving average at 5,904. 

 

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ASX 200 Daily Chart

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