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  • S&P/ASX 200 is heavy at the 38.2% Fibo which is acting as a firm resistance. 
  • Due to risk-off, nearly all sectors are in the red on Thursday.

ASX 200 (XJO ticker)  is losing 1.57% in Asia in risk-off markets. At the time of writing, S&P/ASX 200 is trading at 5381 having travelled from a low of 5466.7 to a low of 5466.7. The cash index is following the general risk-off tone with a fall out overnight on Wall Street. More on that here: Wall Street Close: COVID-19 impact on US economy has investors profit taking

For the ASX 200, nearly all sectors are in the red on Thursday, with the financials, miners, consumer discretionaries and property firms losing heavily. COVID-19 is biting into the economic forecasts and the latest on Asia from the International Monetary Fund is enough to make the stubbornest of bulls think twice. The IMF has warned that “Asia’s economic growth this year will grind to a halt for the first time in 60 years, as the coronavirus crisis takes an “unprecedented” toll on the region’s service sector and major export destination. As for the Bank of Japan, an IMF official argued that “rate cuts to have limited effect in stimulating the economy, may hurt the financial sector.”

  • IMF: Asia’s economic growth this year will grind to a halt for the first time in 60 years

Meanwhile, the Aussie obs data came in better than expected and there is an air of optimism with the way the Aussie have contained the COVID-19 and how the Reserve Bank of Australia has stabilised money markets – a double whammy of bullishness for the stock markets. More on the Aussie jobs here:

  • Breaking: Aussie jobs data better than expected, but the caveat is …

ASX 200 Index weighed by weak copper

However, “metals were more mixed with copper down 1% from 4-week highs, filling the LME gap left behind on the previous day’s trading,” analysts at Westpac explained.

Softer equity markets and super weak global data contributed to the softer price action. The weakness in copper was despite Zambia raising the stakes in its fight with Glencore by threatening to strip it of its Mopani copper mine. Aluminium managed to close up by a modest 0.5% at $1,512 with Citi suggesting that Chinese producers may jointly cut as much as 50% of smelter production due to it being uneconomic.

AEON Metals remains at the lowest levels since 2016, at 0.054. 

ASX 200 Index levels

The ASX 200 holds just below a 38.2% Fibonacci level and is hardly convincing for a break to the 5645 as the next resistance structure. To the downside, bulls will look for the 5090s support structure to hold.