- The Australian index has seen a bit of bullish pressure during the trading session on Wednesday as we continue to consolidate overall, but we are pressuring the top of the consolidation area, which could open up the possibility of a fresh, new, massive breakout.
- This could have a little bit of FOMO attached to it, and I think traders would get a little bit aggressive at that point.
On the other hand, we could pull back, perhaps testing the support level that I am watching in the form of AU$1650, an area that had been important previously. With that being said, it’s worth noting that it should have a certain amount of “market memory” attached to it, and this of course would be an area that I think you have a lot of interest. The 50 Day EMA is at the bottom of the consolidation area and rallying, so I think it’s probably only a matter of time before that comes into the picture as well.
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Australia and Commodities
Everybody knows that Australia is highly sensitive to what goes on with the commodity markets, but it’s also worth noting that the Australian index is made up of financial companies that have a lot to do with Asian growth, financing a lot of the big projects. Ultimately, this is a market that if we can break above the AU$8800 level, then we have a shot at going to the AU$90,000 level above, perhaps even higher than that.
Pay close attention to the way New York indices move, because lot of times that can have an influence on what happens in Australia, as it is a much smaller index. There are a lot of concerns when it comes to global growth and tariffs, and if trade starts to shrink, that would be horrible for Australia itself. It does look like there are a lot of major agreements, at least in principle, and that of course is a good sign. I remain bullish, but I also recognize that choppiness due to the fact that we are in the middle of summer probably be expected as well.
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