- Risk-on markets have elevated the index, although there is a lack of conviction from a technical standpoint longer term.
- ASX falling shirt of a key resistance as bulls struggle at the 38.2% Fib.
The benchmark S&P/ASX200 has been bid from the word go on Tuesday, soaking up positive data from around the world and riding the rise in the shares of Boeing, which bolstered Wall Street overnight.
The index is currently trading at 5908, higher by 1.61%, having climbed with a range of 5815 and 5925.
US stocks on Monday surged and risk sentiment has been elevated around the start of the week's sessions despite the second wave of COVID-19 taking shape throughout various states of the US and previous of the world.
Boeing shares soared more than 14% higher after a 737 MAX aircraft took off on the first day of certification flight testing, raising hopes of Boeing’s recovery.
The Dow Jones Industrial Average rose 580.25 points, or 2.32%, to 25,595.8 on Monday, the S&P 500 gained 44.19 points, or 1.47%, to 3,053.24 and the Nasdaq Composite added 116.93 points, or 1.2%, to 9,874.15.
US and China's data beating expectations
We have seen both US and China's data beating expectations which gave rise to renewed optimism about a US economic recovery.
US Pending Home Sales came in May spiking by 44.3% and Chinese NBS Manufacturing PMI (Jun) and Non-Manufacturing PMI (Jun) as follows:
- China June official manufacturing PMI at 50.9 (Reuters poll 50.4) vs 50.6 in May.
- China June official services PMI rises to 54.4 vs may 53.6.
-
China data dump: Numbers beat expectation, giving risk appetite another lift
As for domestic events, the Reserve Bank of Australia’s (RBA) Deputy Governor Guy Debelle will discuss the RBA’s response to the pandemic this Tuesday.
ASX 200 Index levels
The index has found resistance at a 50% mean reversion of the June downtrend between 6195 and 5270. The index is back to test the 38.2% Fib with MACD below zero and bulls struggling to fully regain control at this juncture.
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