- Summary:
- ASX 200 index started the week on positive foot mostly boosted by a rally in the banking sector. For one more day better than expected economic data from
ASX 200 index started the week on positive foot mostly boosted by a rally in the banking sector. For one more day better than expected economic data from China, Australia’s main trading partner, offset the worries from rising tensions between the two superpowers, China and the USA.
President Trump banned two popular Chinese apps – WeChat and TikTok – and now U.S. companies and citizens have to stop dealing with two companies in 42 days’ from today. Furthermore, U.S administration announced sanctions on 11 high-level Chinese officials. Investors now await retaliation from China, ahead of the next meeting on August 15, between China and USA to discuss the progress made in the first phase of the trade deal.
Victoria announced 322 new coronavirus cases the lowest figure in the last two weeks, but the death toll hit a daily record of 19.
China continues to feed investors with optimism for a fast recovery. China Consumer Price Index (CPI) registered in at 0.6%, beating the expectations of 0.4% in July. The yearly reading for CPI came in at 2.7% also above the forecasts of 2.6%. The PPI came in at -2.4%, topping the expectations of -2.5%.
ASX 200 Technical Analysis
ASX 200 finished close to daily highs recovering all of Friday’s loses. I have mentioned in my previous ASX 200 analysis that the downside is limited for the index: ASX 200 Downside Capped At 5,962.
Today’s strong gains reiterate the positive scenario for the index at least fot the short term. Immediate resistance is at 6,125 the daily top. ASX 200 needs to clear the 200-day moving average resistance at 6,182, for a new leg higher.
On the flipside, today’s low at 6,004 is the first support area. The 50-day moving average at 5,978, has proved a strong support for the index the last month. A break below 5,978 would open the way for 5,853 the low from August 3.
ASX 200 Daily Chart
