Current trend

The leading index of the Australian economy, the ASX 200, is showing corrective dynamics near the level of 7873.0 against the backdrop of the situation on the domestic bond market, as well as confirmed negative forecasts for business activity.

Yesterday, gold mining company Newmont Corp. reported revenue of 6.66 billion Australian dollars, beating estimates of 6.14 billion Australian dollars, and earnings per share of 1.090 Australian dollars, compared with analysts' forecasts of 0.961 Australian dollars.

The index is negatively affected by macroeconomic reports, indicating serious problems in the economy: the Australian Manufacturing PMI in July amounted to 47.4 points, which is still below the stability level of 50.0 points, and the Services PMI dropped to 50.8 points from 51.2 points.

Another factor of pressure on the stock market is the upward correction in the bond market: the yield rate on 10-year bonds increased to 4.356% from 4.267% recorded last week, on 20-year ones — to 4.838% from 4.692%, and on 30-year bonds — to 4.847% from 4.703%.

The growth leaders in the index are Qantas Airways Ltd. ( 1.86%), Magellan Financial GR ( 1.66%), Aurizon Holdings Ltd. ( 1.26%), Bendigo and Adelaide Bank Ltd. ( 1.22%).

Among the leaders of the decline are Regis Resources Ltd. (–9.16%), Mesoblast (–7.77%), Fortescue Metals Group (–5.21%).

Support and resistance

On the daily chart, the price is held within the ascending channel with dynamic boundaries of 8100.0–7700.0, moving further and further from the resistance line.

Technical indicators have almost reversed and issued a new sell signal: fast EMAs on the Alligator indicator are approaching the signal line, and the AO histogram is forming corrective bars, being close to the transition level.

Support levels: 7840.0, 7650.0.

Resistance levels: 7920.0, 8080.0.

Trading tips

If the asset reverses and declines with the price consolidating below 7840.0, short positions can be opened with the target at 7650.0. Stop-loss — 7910.0. Implementation time: 7 days and more.

If the asset continues growing, and the price consolidates above the resistance at 7920.0, long positions with a target of 8080.0 and stop-loss of 7860.0 will be relevant.