Will Australia overcome the triple top?

ACTIVTRADES:AUS200   S&P/ASX 200 Cash Index
The Australian session has started on a positive note with both annual and quarterly retail sales in positive territory on an annual basis (previous 4.1% vs. 1.5% today) and showing a correction although still in negative territory on a quarterly basis (previous -1.9% vs. -0.3% today). Australian PMI data showed a slight decline. The Australian Federal Reserve's (RBA) consumer inflation expectations are for a slight correction from the previous 4.6% vs the current 4.5%. Tonight's session may confirm slightly downward consumer confidence, if the consensus exports, trade balance and imports are as positive as presented and show an acceleration of the Australian economy. The RBA currently has estimated consumer price inflation at around 3.6%, the previous indicator being 3.5% and the cash lending rate target is at 4.35% based on May 8 data. The truth is that we have a scalextric of emotions with interest rate expectations over Australia, and the truth is that the Australian Federal Reserve is keeping the door open to rate hikes of 0.25% in its next meetings, looking for 2024-25 to target 2.75% and not 3.5%, and looking to reach 2.5% by 2026 onwards.

The S&P/ASX 200 has shown to remain strong in the highs zone and it is also partly a result of the fact that some of its companies have a very strong correlation with the gold market which is currently in the highs zone as well as silver, which has doubled its value during this 2024 (45.41%), as well as gold has risen by 24.39%. The metals and Gas markets are very important for Australia as an exporter of technologies for these markets and one of the main suppliers of LNG to Asia.

Looking at the chart, it is currently at 7,831.16 points, with a high of 7,927.42 points and a low of 6,734.52 points. The development of the index has been slightly upward limping.
If we look at market expectations, it would not be unusual to see a growth of the Australian index. The RSI is in its middle zone at 56.70% while the price bell that has formed on the daily level is dual, and heavily weighted on the current price zone which is between highs and 7,392.34 points. If the triple top is breached we could see a new round of bullish sessions. But it is more likely to see a correction to 7,392.34 than the overcoming of such strong resistance.

Ion Jauregui - AT Analyst

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