The ASX 200 has staged a strong rebound, logging its second-best day in 11 months despite inflation remaining well above the RBA’s target. While softer CPI offered short-term relief, underlying price pressures and geopolitical risks continue to shape the outlook. Against this backdrop, traders are watching whether the index can build on recent gains, while key stocks such as Fortescue (FMG) and Goodman Group (GMG) approach important technical inflection points.
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ASX 200 rebounds on ‘soft’ CPI, FMG and GMG approach key technical levels
‘Softer’ inflation unlikely to ease cost-of-living concerns
Inflation data for February came in slightly softer than expected, though there is little to celebrate as CPI remains well above the RBA’s target and we are yet to see the full impact from the Middle East. Consumers tend to gauge inflation in real time at the pump, so headlines of ‘softer inflation’ are unlikely to resonate. Besides, trimmed mean sits at 3.3% — just 0.1 percentage points below forecast and still 0.3 points above the RBA’s upper band.
ASX 200 rebound warns bears as key levels reclaimed
Still, it was enough to help the ASX 200 post its second-best day since April and close at a four-day high. With prices also back above the September low, it should serve as a warning to bears that they may have pushed their luck. Unless a fresh bearish catalyst emerges from Middle Eastern developments, near-term risks for the ASX appear skewed to the upside.
Source: ASX, LSEG
Fortescue (FMG) Technical Analysis
There are several technical clues suggesting an important swing low may have formed on Monday. It has been three months since FMG printed a double top across December and January, which led to an -18.5% decline.
The weekly chart shows an elongated bullish engulfing candle formed two weeks ago around a high-volume node (HVN), the 50-week SMA, and the 38.2% Fibonacci retracement level. A bullish divergence also formed on the RSI (2). While two trading days remain this week, FMG is on track to print another bullish engulfing candle.
The daily chart shows a strong gap higher on Tuesday above the 200-day SMA, with momentum extending higher today. Bulls could look for dips towards the gap low around 19 and maintain a bullish bias while price holds above the double bottom low at 18.50. A break above 21 would invalidate the bearish move from the double top highs and suggest the rally from the 2025 low has resumed.
Source: ASX, LSEG
Goodman Group (GMG) Technical Analysis
This is a stock attempting to stabilise after a heavy bout of selling, although I’m not convinced bulls will get their way for long without a genuine catalyst. GMG has fallen -35% from its August high, with -22.9% of that decline occurring over the past seven weeks.
For now, the April low appears to be providing support. Like FMG, it is attempting to form a bullish engulfing week, so there is scope for a near-term bounce if GMG can avoid a fresh break lower.
However, with the dominant trend still pointing lower, rallies are likely to be sold into. Gap resistance around 27 and the prior support band just above 28 stand out as near-term upside targets for bulls and potential fade zones for bears.
Source: ASX, ASX24, TradingView
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-- Written by Matt Simpson
Follow Matt on Twitter @cLeverEdge
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