The ASX 200 has continued to make progress since June. The index rose more than 4% during July. Last Friday, the annual growth forecast was revised upwards to 3.5% instead of the May estimate of 3%. Australia's central bank remains attentive to the Chinese economic slowdown and the strength displayed by the Australian dollar this year.

Australia takes profit of a good start to the year of the mining sector. The main economic driver grew by 1.3% during the first quarter of 2012. Strong demand in real estate and good household consumption should also support the economy during the second half of the year. Retail sales increased by 1% for the month of June, the best pace since April 2011.

The central bank of Australia stays attentive to the economic situation in China which is the main trading partner of the country. During the second semester investors will closely monitor the effects of the recent easing measures taken by the Chinese government. The central bank also highlights the strength of the Australian dollar which could eventually affect the country's foreign trade. However, the official interest rate remains unchanged at 3.5%.

Technically, the trend is still bullish in weekly data. A break above 4310 points would open the way to the highest level of May around 4450 points. Conversely, the index may find support around the 4200 points area which also refers to the 20-day moving average.