ASX 200: China started an anti-dumping probe into Australian Wine

Summary:

ASX 200 index trade close to daily highs before the closing bell recovering almost all of yesterday’s losses as the index struggles below the 200-day moving

ASX 200 index trade close to daily highs before the closing bell recovering almost all of yesterday’s losses as the index struggles below the 200-day moving average. The lower number of new coronavirus infections in the country helped sentiment.

Wall Street ended higher yesterday led by Nasdaq which stalled just five points away from record highs.

Investors ignored the rising trade tensions between China and the USA after President Trump said that would put further pressure on more Chinese companies and will stop the access of Huawei to available chips. U.S. administration last week, banned TikTok and WeChat in the USA.

News that China has started an anti-dumping probe into Australian wine pushed Treasury Wine Estates (TWE) 13% lower as the company generates almost 25% of its sales in China. Australia denies and illegality in its wine exports.

The mining sector in ASX is among the winners getting a boost from a weak dollar and higher commodities prices. Banks are lower today, and Westpac gives up over 3% after the quarterly earnings report disappointed while it announced that it would not pay an interim dividend.

ASX 200 Technical Analysis

ASX 200 is 0.77% higher at 6,123 as the index continues the consolidation phase between 6,050 and 6,156. The technical picture points to a continuation of the consolidation unless the index manages to break above the 200-day moving average.

ASX rejected three times at the 200-day SMA. Suppose the index breaks above that resistance, the next target for bulls would be 6,186 the top from August 11. More selling pressure would emerge at 6,210 the high from June 9 trading session.

On the downside, support for ASX stands at 6,075 today’s low. A break below might test 5,997 the 50-day moving average. Below that level sellers would be in control for the short term and might challenge the next support at 5,859 the low from August 3.