Australian Stock Index Technical Analysis | Australian Stock Index Trading: 2019-07-05 | IFCM UAE
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Australian Stock Index Technical Analysis - Australian Stock Index Trading: 2019-07-05

Improving trade surplus bullish for AU200

Trade surplus and retail sales rose in Australia. Will the AU200 stock index continue advancing?

Recent economic data from Australia were positive: Australia's retail sales rose in May and trade surplus hit record high. Retail sales rose by 0.1% in May after 0.1% decline in April, driven by stronger spending in restaurants and on household goods. Australia's trade surplus rose to a record A$5.745 billion in May following A$4.820 billion surplus in April, as exports rose by 4%, while imports rose by 1%. The increasing export was supported by rising prices for commodities as well as weaken currency as the Reserve Bank of Australia lowered interest rates. The Reserve Bank of Australia cut interest rates for the second time in as many months on Tuesday to 1.00%, down from 1.25%, adding to a cut in June. Rising trade surplus and consumer sentiment is bullish for Australia’s stock market index.

AU200 gaining above MA(200)  07/05/2019 Technical Analysis IFC Markets chart

On the daily timeframe AU200: D1 is gaining after hitting seven-month low in the end of February.

  • The Donchian channel indicates an uptrend: it is widening upward.
  • The Parabolic indicator has formed a buy signal.
  • The MACD indicator is above the signal line and the gap is widening, which is a bullish signal.
  • The RSI oscillator is rising and is reaching the overbought zone.

We believe the bullish momentum will continue after the price closes above the upper boundary of Donchian channel at 6768.61. This level can be used as an entry point for placing a pending order to buy. The stop loss can be placed below the lower Donchian boundary at 6605.31. After placing the order, the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the expected profit/loss ratio to the breakeven point. If the price meets the stop loss level (6605.31) without reaching the order (6768.61), we recommend cancelling the order: the market has undergone internal changes which were not taken into account.

Technical Analysis Summary

PositionBuy
Buy stopAbove 6768.61
Stop lossBelow 6605.31

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Note:
This overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or а recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.

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