Talking Points:
- Strategy: Position for higher moves though be cautious of support level
- The path is clear until new resistance at 5293
- Upward momentum halts within overbought zone
After a break above the previous double top at 5074, ASX 200 is heading toward a new resistance level of 5293 with little hindrance along the way. However waning upward momentum signals possible correction after the rapid rise last week.
Traders with long positions should keep top close to support level. Those who are looking to enter long trade may await signs of momentum resumption first. 5074 has become an immediate support level. So long as prices hover above this, chances of further upturn remain.
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Daily Chart – Created Using FXCM Marketscope
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— Written by Nathalie Huynh, Strategist for DailyFX.com
Contact and follow Nathalie on Twitter: @nathuynh