Over the last couple of weeks, the XAO has been consolidating at the 3700 level after a strong bull run. Regardless of whether this is the bottom of the market or not, it’s likely there will be a pull back in the market before it can continue. The question is how far is it going to pull back?

For this we will have to wait and see, but the there should at least be a retest of 3300. This level is a significant weekly support line and the 62% Fibonacci level. If the XAO retests this level and bounces, this will be a bullish indication as Higher troughs are now forming and strength is building, possibly giving it enough strength to continue climbing higher.

However, should this level fail and the XAO continue down, this would be a trend continuation of the current bear market. The next level of support would be 3000.

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