AU200 Analysis: Technical setup bullish for AU200

By IFCMarkets

Technical setup bullish for AU200

Australia’s economic data in the last couple of weeks didn’t improve much: consumer confidence fell in April whereas balance of trade decline was not as steep as feared. The Westpac Bank Consumer Confidence Index for Australia fell 17.7% in April after 3.8% deterioration in March when a 15% decline was forecast. At the same time business confidence deteriorated much more than expected: the National Bank of Australia business confidence index fell to -66 in March from -4 in February, when a decline to -15 was expected. Weak data are a downside risk for AU200. However against the background of expanding coronavirus infection Australian government announced two additional spending programs to aid its economy. On March 22, a second stimulus package worth $54.2 billion was adopted, followed by third stimulus package of $79 billion on March 30 including a plan to offer businesses payments of $913 every two weeks to cover payrolls. Similar fiscal and monetary stimulus programs of major economies boosted investor confidence which was translated into a rebound in stock markets. Recovering risk appetite is bullish for AU200.

Summary of technical analysis

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