The ASX 200 index pares early losses following the release of weekly employment data, which showed that total payrolls in Australia dropped by 1.1% between mid-June and the middle of this month. This is largely a result of regional lockdowns across Victoria as new COVID-19 infections are on the rise.
In Victoria state alone, the number of payroll jobs dipped by 2.2% following a decision by authorities to extend the state’s lockdown by another six weeks. This brings the total number of payrolls 5.6% below pro-Coronavirus levels, back in March.
Investors are worried about growing numbers of new COVID-19 cases across Australia, the U.S. as well as the most recent decision by U.K. authorities to slap a two-week quarantine requirement on all travellers arriving in the country from Spain.
Yesterday’s announcement by Moderna, however, saying that it plans to start testing a Coronavirus vaccine among 30,000 volunteers, did help Wall Street to end on a higher note. Moreover, speculation that stimulus measures in the U.S. are gaining momentum contributed further.
Markets await a major Fed decision, expected to be announced tomorrow, for forward guidance as the U.S. economy is likely to face a new round of restrictions amid a significant jump in the number of Coronavirus infections across the country.
Meanwhile, Asian indices are trading mixed on Tuesday; the Nikkei 225 ended 0.26% lower, at 22,675. The Hang Seng is 0.25% higher, at 24,662, while the Shanghai Composite is 0.20% higher, at 3,212.
ASX 200 Technical Analysis
ASX 200 is 0.39% lower – at 6,020 – as a rally following March record lows does continue but it faces strong resistance at the 200-day moving average. The technical picture for the ASX index is positive in the short term, but bulls need a break above the 6,211 – 200-day SMA – to start a fresh leg higher.
Looking north, the index will face intraday resistance at 6,113. A break above 6,113 may challenge the high from July 22, 6,164. Again, the 200-day moving average is the next critical barrier, at 6,211.
On the other side, the first support for the ASX 200 index will be met at 6,019 today’s low. If the ASX 200 index does break below, then the next support will be reached at 5,915, the 50-day moving average. More bids would emerge at 5,775, the June 29 low.
ASX 200 Daily Chart