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Aussie 200 finding short-term resistance

CMC Markets

Whilst I am not really a believer that the longer-term moving averages are in and of themselves a support/resistance level there is plenty of observations that one can make of any chart and see where exactly that has occurred. Take a look at the chart below and you can see where the price has previously stopped at or around the 50 period MA (the centre red line) - and also times when it just cruised on through - so what's the difference?

As I am writing the session is 5 minutes old and you can see on the final candle that there has been a move lower. Notice that the last 2 peaks were getting progressively lower and were doing so at the 50 period MA. In addition with the 200 period MAs and their vol bands trading sideways it looks a likely time for their to be a mean-reversion movement in price toward the 200 period MA (centre blue line). This is not a big trade setup by any stretch but actually checking out the MAs can give you a good idea where likely market direction will be - often with a much bigger range than the chart here today.


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