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March 11, 2023
After making its biggest single-day drop of 166.4 points (2.28%) since November 2022, ASX closed at 7,144.7 yesterday.
This extraordinary price action was also seen in fixed income; investor risk appetite was subdued as stocks were sold off in favour of perceivably safer alternatives such as government bonds. The iShares U.S. Treasury Bond ETF has gone up 1.41% to trade at $23.05, thereby indicating that government bond yields were downbeat across the yield curve.
While price action maintains a negative bias, Australia CFTC AUD speculative net positions released yesterday at 20:30 UTC with a figure of -24,800, while the previous figure was -28,100.
ASX 200 pushed below the 7,232.63 support level and extended 87.93 points beyond it. The Commodity Channel Index (CCI) indicator is below -100, meaning the market price is unusually low and below its rolling moving average. Technical analysis indicates that a new, strong downtrend could be forthcoming with short positions favored. Price action remains constrained around the key Fibonacci level of 7,180 currently serving as support. If price action breaks below, the next Fib hurdle is 7,090.61. A crossing of the lower Bollinger Band® at 7,178.16 suggests further losses may follow for ASX.
Several technical indicators are adding weight to the bearish momentum seen yesterday and forecasting ASX to extend its recent losses.
In the meantime, negative performances are also seen in other markets, after ending yesterday's session at 19,926, Hang Seng lost 605.82 points and is trading around 19,320. After ending yesterday's session at 7,880, FTSE lost 131.65 points and is trading around 7,748.35. Nikkei is down to 28,144, losing 479.18 points, after ending the previous session around 28,623.
The index has been trending lower for about a month. ASX has gained 5.25% since its lowest print of 6,434.7 earlier this year.
