ASX 200 Outlook: Bears To Retain Control Despite Two-Day Rebound

Hopes of a US-Iran peace deal helped lift the ASX 200 for a second consecutive session, though SPI 200 futures turned sharply lower overnight after reports Iran rejected the proposal. With futures slipping beneath weekly VWAP and the recent rebound lacking strong open interest participation, traders may question whether the latest rally was merely corrective within a broader bearish structure.

View related analysis:

SPI 200 Futures Slide Below VWAP as GEX Resistance Caps Rebound

ASX 200 Market Snapshot

Hopes of a US-Iran peace deal helped lift the ASX 200 for a second consecutive session, delivering its strongest 2-day rally in four weeks alongside the widest daily trading ranges
Financials (XFJ) and materials (XMH) have been the key drivers behind the rebound, although momentum in financial stocks faded into Wednesday’s close
The ASX 200 is now tracking towards a bullish engulfing week and has retraced roughly half of April’s sharp selloff
However, with resistance levels nearby and the weekend approaching after a strong rebound, bulls may need to tread carefully — especially with SPI 200 futures softer after Iran reportedly rejected the US peace proposal

Source: ASX, LSEG

ASX 200 Technical Analysis

ASX 200 GEX Levels Suggest Sellers Retain Near-Term Control

ASX 200 traders face a weak open after SPI 200 futures fell sharply overnight and slipped beneath weekly VWAP, shifting near-term risk back to the downside. The 8900 and 8850 strikes are now likely to act as overhead resistance on rebounds, while 8875 remains the key battleground level where traders may look for signs of acceptance or rejection after the open.

Source: ASX, TradingView

SPI 200 futures are sitting around the monthly pivot point, though a break beneath 8700 could open the door to the 8600 area and nearby swing lows. The recent two-day rally in SPI futures was not accompanied by a meaningful rise in open interest, suggesting bears still retain broader control after dominating positioning during the previous decline.

Source: ASX24, TradingView

If sellers maintain control beneath 8875, downside pressure could build towards 8775 and 8750 where put support becomes more concentrated, while the 200-day EMA just above 8800 may also attract dip buyers
If bears really take control, the 200-day EMA and 8725 major call cluster could come into focus as the next key downside support zone
However, if bulls can reclaim 8875 and stabilise above it, the market could rotate back toward 8850 and potentially 8900 later in the session.

View the full economic calendar

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

How to trade with City Index

You can trade with City Index by following these four easy steps:

Open an account, or log in if you’re already a customer

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
Search for the market you want to trade in our award-winning platform
Choose your position and size, and your stop and limit levels
Place the trade

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

Delayed London Stock Exchange (LSE) Data

The London Stock Exchange (LSE) market data displayed or referenced on this website is provided on a delayed basis and is not in real time. The delay period may vary but is typically at least 15 minutes. This data is intended for information purposes only and should not be relied upon for trading, investment, or other financial decisions. We do not guarantee the completeness, reliability, or suitability of the data for any particular purpose. Users should consult real-time data sources and obtain professional advice before making any financial decisions.