The Australian stock index ASX 200, in its hourly chart, shows a corrective formation as a flag pattern, which makes us expect a new bearish movement.
According to the traditional technical analysis, the flag pattern is a chartist formation that calls for the continuation of the previous move. In work developed by Thomas Bulkowski, the author of "Encyclopedia of Chart Patterns," the author concludes that the flag pattern tends to have a failure rate of less than 5%.
The short-side positioning will active id the price breaks down and closes below 7,044.8 pts. In a conservative outlook, we foresee a potential first target at 7,008.7 pts.
If the price continues its drops, the Australian index could drop to 6,955.4 pts and extend until 6,881.5 pts.
The invalidation level of our bearish setup locates at 7,101.5 pts.
Trading Plan Summary
Entry Level: 7,044.8 pts.
Protective Stop: 7,101.5 pts.
1st Profit Target: 7,008.7 pts.
2nd Profit Target: 6,955.4 pts.
3rd Profit Target: 6,881.5 pts.
Risk Warning: CFD and Spot Forex trading both come with a high degree of risk. You must be prepared to sustain a total loss of any funds deposited with us, as well as any additional losses, charges, or other costs we incur in recovering any payment from you. Given the possibility of losing more than your entire investment, speculation in certain investments should only be conducted with risk capital funds that if lost will not significantly affect your personal or institution’s financial well-being. Before deciding to trade the products offered by us, you should carefully consider your objectives, financial situation, needs and level of experience. You should also be aware of all the risks associated with trading on margin.
Recommended Content
Editors’ Picks
EUR/USD rises toward 1.0700 after Germany and EU PMI data
EUR/USD gains traction and rises toward 1.0700 in the European session on Monday. HCOB Composite PMI data from Germany and the Eurozone came in better than expected, providing a boost to the Euro. Focus shifts US PMI readings.
GBP/USD holds above 1.2350 after UK PMIs
GBP/USD clings to modest daily gains above 1.2350 in the European session on Tuesday. The data from the UK showed that the private sector continued to grow at an accelerating pace in April, helping Pound Sterling gather strength.
Gold price flirts with $2,300 amid receding safe-haven demand, reduced Fed rate cut bets
Gold price (XAU/USD) remains under heavy selling pressure for the second straight day on Tuesday and languishes near its lowest level in over two weeks, around the $2,300 mark heading into the European session.
Here’s why Ondo price hit new ATH amid bearish market outlook Premium
Ondo price shows no signs of slowing down after setting up an all-time high (ATH) at $1.05 on March 31. This development is likely to be followed by a correction and ATH but not necessarily in that order.
US S&P Global PMIs Preview: Economic expansion set to keep momentum in April
S&P Global Manufacturing PMI and Services PMI are both expected to come in at 52 in April’s flash estimate, highlighting an ongoing expansion in the private sector’s economic activity.