The Trade: ASX 200 movements and their impact on forex trading
IG's Tony Sycamore explores the latest trends in the ASX 200 alongside movements in forex and cryptocurrency markets.
(AI video summary)
This video was created on 16 October for IG audiences by ausbiz.
IG's Tony Sycamore provides insight on how recent developments in the ASX 200, along with forex and cryptocurrency market trends, influence trading strategies through technical analysis and macroeconomic factors.
Technical analysis driving ASX 200 adjustments
The ASX 200 recently surged to a record high of 8331 after five weeks of gains on Wall Street, driven by optimism surrounding China's economic policy pivot.
Despite initially breaking above the trend channel resistance, the index retreated again following a pullback in US markets. For a sustained upward movement, market participants are watching for a consistent close above this level. Critical support lies between 8110 and 8100, providing essential insights for traders utilising technical analysis to forecast future market behaviour.
Forex market trends and the Aussie dollar
The foreign exchange market is closely monitoring events influencing both the Australian dollar and US dollar. The US dollar has gained strength, fuelled by robust economic indicators like non-farm payrolls and a firmer consumer price index (CPI). Conversely, the Australian dollar has softened, trading around $0.67, influenced by uncertainty over Chinese fiscal stimulus and domestic economic data.
Tomorrow’s jobs report could introduce volatility, with potential Reserve Bank of Australia (RBA) interest rate cuts if the data falls short of expectations.
Cryptocurrency resistance and oil market dynamics
Bitcoin exhibited volatility, testing resistance near $68,000.00 but facing repeated rejections. This trend indicates a need for caution among traders, who should await a clear breakthrough above resistance before considering long positions.
In the oil market, recent geopolitical relief saw prices tumble 4% overnight, with crude oil unable to maintain levels above key support between $72.50 and $71.50. Traders are advised to watch for further declines towards $65.27, marking previous lows as the market navigates ongoing momentum shifts.
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