ASX 200 technical outlook
ASX 200 index is scoped to rise further while the short term technical is bullish.
ASX 200 short-term technical outlook – bullish
Australia's ASX 200 broke above key resistance and opened the door for further gains in the coming weeks/months.
The index’s break above the barrier at the August high of 7138 has triggered a double bottom (the June 2022 and the October 2022 lows), pointing to a potential rise toward 7865. This follows a hold last year above crucial support on the 200-week moving average, coinciding with a 38.2% retracement of the 2020-2021 rise (see chart).
Fibonacci retracements of 38.2%-50% are considered reasonable and corrective, rather than a reversal of the trend. In the case of the ASX 200, the 2021-2022 decline was a correction of the post-Covid bull run and not the start of a bear market.
The price objective of the bullish double bottom pattern implies a break above the record high of 7633 hit in 2021 to new cycle highs. On the downside, there is quite strong support at the early-January low of 6905, near the 200-day moving average.
ASX 200 weekly chart
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