ASX 200 index trade higher for second straight day rebounding from the monthly lows mirroring the strong rally in Wall Street. Nasdaq and S&P 500 registered fresh record highs despite the correction in big tech companies. Investors sentiment has improved on hopes for more stimulus and liquidity from governments around the globe. ASX had two volatile sessions; yesterday had the best day in a month while the previous had the worst monthly session.
Australia Services PMI At 49
The Commonwealth Bank Services PMI registered in at 49, beating the estimates of 48.1 in August, while the Composite PMI rises to 49.4 in August from 48.8 in July. The AiG Performance of Construction Index dropped to 37.9 in August from 42.7 in July, amid the new lockdown in Victoria state.
Australia Trade Balance came in at 4607M below the expectations of 5400M in July, as the Exports fell from previous 3% to -4% while Australia Imports climbed to 7% in July from 1% in June. Yesterday reported that the Aussie GDP shrank by 7% disappointed analysts marking the first Australian recession in the last 30 years.
China Economic Data Point to Fast Recovery
Robust services data from China also supports Australian equities. China Caixin Services PMI came in at 54 above the estimates of 50.4 in August; the July reading was at 54.1.
The energy and mining sector in ASX 200 is under pressure after the slump in crude oil price and gold. BHP trades ex-dividend and give up almost 2%.
ASX 200 Daily Technical Analysis
ASX 200 managed to reverse the negative bias that formed the previous week as in only two trading session managed to break above the 50-day moving average and stopped at the 200-day moving average. Now the index would face for one more time the strong resistance at 6,200 where the index rejected several times.
ASX 200 support stands at 6,063 the low of today’s trading session. The 50-day moving average would offer the next support level at 6,037. If the bears break below, then the next target is 5,956 the low from yesterday’s trading session.
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