ASX200 Analysis: Lower high will it be followed by a lower low?

Since the last report, the index made two days up and three days down.

So we have a lower high, but it hasn’t taken the low at 5270 level of support.

12_06_2016

This low (I believe) will be taken as the volume increased on Friday (the last bar on the daily chart above – a long red candle bar).

The next support is between 5223 (0.38 Fibonacci level of the minor trend) and 5245 (0.5 Fibonacci retracement level of the major trend), but this look like a weak correction.

The real support I guess would come within the black band (see above chart) between 5130 and 5210. This support comes from:

  • form reading (bar formation in March then in April).
  • 200 MA daily at 5130 and 200 MA weekly at 5210.
  • 0.5 Fib retrenchment of the minor trend at 5160 and 0.38 Fib of the major trend at 5150.

12_06_2016W

The big question is the timing – when will these levels be reached?

Hard to predict when these levels will be hit as there are great uncertainties in the market in the week after this: the ‘Brexit’ vote on the 23rd of June and the US central bank decision on interest rates.