ASX 200 Index slips after Australia jobs data as a bullish pattern emerges

Australian stocks pulled back on Thursday, even as other global indices jumped amid the ongoing Iran-US truce. The ASX 200 Index dropped to $8,947, from this week's high of $9,056. 

This retreat happened as investors reacted to the latest Chinese and Australian macro data. Still, it is slowly forming a bullish flag pattern, pointing to an eventual rebound this year.

ASX 200 Index loses momentum after latest Australian jobs report 

The blue-chip ASX 200 Index, which tracks the biggest companies in Australia, dropped modestly on Thursday after Australia published the latest jobs report.

According to the Australian Bureau of Statistics (ABS), the economy created 17.9k jobs in March after adding 49.6k in the previous month. Full-time employment rose by 52k, while part-time jobs dropped by 34.5k.

More data showed that the country’s participation rate, which looks at the number of people of working age who are either working or actively looking for work, dropped to 66.8% from the previous 66.9%.

Meanwhile, a separate report showed that inflation expectations surged in April as the Iran war gained steam. It jumped to 5.9% from the previous 5.2%, moving further away from the Reserve Bank of Australia (RBA) target of 2.0%.

The RBA has maintained a more hawkish tone than other global central banks this year as it delivered two interest rate hikes. 

In contrast, the Federal Reserve has maintained interest rates steady between 3.50% and 3.75%, and analysts believe that it will hold them steady in the next meeting. The RBA will deliver its next interest rates decision on May 5.

The ASX 200 performance is a steep contrast with other global indices, which have continued doing well in this week amid the rising hopes that a truce between the US and Iran will continue. 

For example, the S&P 500 Index has jumped to a record high, while top indices like the Hang Seng and Shanghai Composite have soared by double digits from their lowest level this year.

Looking ahead, the ASX 200 Index will react to some notable earnings in the coming weeks. The most notable one will come out on April 21 when BHP, the biggest mining company in the world, will release its numbers. Other companies to watch will be Evolution Mining, Zip, and Origin Energy.

Among the big names, Newmont stock was the top laggard as it dropped off by 5.17% as gold prices slipped. Top Australian banks like NAB, Commonwealth Bank, and Westpac dropped by over 3%.

Some of the other gainers were companies like Life360, Audinate, Wise Tech Global, and Xero. On the other hand, the top laggards were companies like Reece, James Hardie, Viva Energy, and Ansell.

ASX 200 Index technical analysis 

ASX 200 Index chart  | Source: TradingView 

The daily timeframe chart shows that the ASX 200 Index has rebounded sharply in the past few weeks. After bottoming at $8,250 on March 20, it soared above the key resistance level at $9,000 this week and then pulled back after the latest jobs numbers.

It remains much higher than the 50-day Exponential Moving Average (EMA) and is slowly forming a bullish flag pattern, which often leads to more gains over time.

Therefore, the most likely scenario is where the index rebounds and hits the all-time high of A$9,236. This view will be confirmed if it moves above the key resistance level at $9,140.