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MENAFN- Daily Forex)
The ASX200 initially tried to rally a bit during the trading session on Thursday, only to turn around and show signs of weakness. All things being equal, though, we are going sideways, and the 8100 level underneath is going to be a major support level. The market has seen that as a potential support level not only due to previous action but also the 50-day EMA.
In general, I think that the short-term pullbacks I think offer opportunities for those who are nimble because this is a short-term back and forth market that's trying to work off some of that excess momentum that we had seen going back to the month of July. Longer term, the question now is whether or not we can break above the $8,300 level, which has been a bit like a ceiling in this market.
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The $8,300 level opens up the possibility of a move to the $8,500 level, but keep in mind commodity markets of course are going to be a major influence on where we go in the future, as there is a certain amount of market memory in these areas. Ultimately, it will be interesting to see how this all plays out, but I believe that the buyers will eventually find a way to push this market higher.
Commodities and the ASX 200
The ASX features quite a few major commodity players such as BHP and Rio Tinto. Some of the other ones include Macquarie, James Hardie, for example, all can contribute to the ASX 200 rallying, but right now, commodities seem slightly bullish but not aggressively so, and therefore I think you will see a little bit of a drag on the ASX 200 as a result, but eventually the fundamentals, I think, come into the picture as central banks start cutting rates and start flooding the markets with liquidity, and this normally means traders start buying stocks and other assets.
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