Following a surprise rise in unemployment, the Australian 200 index (ASX: S&P/ASX 200) bulls enjoyed another day in the green, this time driven by optimistic developments in the US market. The index joined an equity market rally as the US debt ceiling negotiations are nearing an agreement. 

Earlier in the week, a surprise rise in unemployment to 3.7% bolstered bets for a pause in the RBA’s next meeting. However, sentiment got dampened by US jobs data that showed a smaller-than-expected rise in initial jobless claims. The 242K was down 22K from the prior period while missing the 254K expectation. While the market slowly prices out the potential for a Federal Reserve rate pause, the developments in the debt ceiling negotiations stole the show as Kevin McCarthy spoke positively, triggering a bullish rally.  

Technical 

A symmetrical triangle has formed on the 4H chart, where resistance held at the 50-day moving average of 7,284.50. The 23.6% Fibonacci retracement from the mid-April peak at 7,273.00 is the closest support to the bulls if they want to enforce a breakout from the triangle. A breakout in this manner could lead them toward 7,310.50 before retesting the psychological resistance at 7,377.00. 

However, if the support at 7,273.00 fails to hold, the daily pivot support at 7,231.51 could come into play. Breaking down the pivot point could catalyse a bearish test of the triangle support at 7,200.92 before reaching the Fibonacci midpoint at the psychological support of 7,142.50. 

Summary 

After a fruitful end to the week, the Australian 200 bulls could look to break through the symmetrical triangle toward resistance at 7,310.50 and 7,377.00. Failure to do so could entice the bears to move back to the pivot point at 7,231.51. 

Sources: Koyfin, Tradingview, Reuters