Technicals | 11:15 AM
Earlier today, Tony Sycamore, Market Analyst, IG updated his views and thoughts on financial markets, including the technical analysis updates below.
All material has been re-published with permission and does not by association represent FNArena’s views (we have none, we simply report).
First Up, Nasdaq100
From its late-March low of 22,841 the Nasdaq100 launched a powerful 35% rally in just over nine weeks to reach a record high of 30,762 in early June.
The correction that followed is now approaching fifteen weeks and providing the Nasdaq100 remains above short-term support at 28,800ish we expect a retest and break of the 30,762-record high, before a move to 32,000.
Aware that a sustained break below 28,800ish would negate the short/medium term bullish view and open the way for a retest of trend-channel support now near 27,500 reinforced by the 200 day moving average at 27,150.
ASX200
The ASX200’s retreat from the early-August record high of 9296.7 had been reasonably orderly until last week’s collapse. The index first lost important support at 9000, then knifed below the support coming from the 200-day moving average, now at 8817.
The depth of that retreat has left August’s push to new highs as a false break higher and raises the risk of a retest of the bottom of the 8500–9000 range that contained the market from early April through late July.
This support at 8500 has to hold or the decline can deepen towards the 8262 low of late March.
Crude Oil
WTI Crude Oil finished higher overnight at US$105.48 (up 3.52%) after hitting a fresh 4½-month high of US$106.75 earlier in the session.
The rally, which now sees crude up more than 23% at the halfway point of the month, comes after fresh Houthi missile and drone attacks on southern Saudi cities and as the market continues to reprice the loss of the East-West pipeline outage. That line is expected to take up to a month to repair and with its vulnerabilities and fragilities now highlighted will remain vulnerable to future attacks.
Bringing some comfort – solid progress is being made on the other side of the peninsula. The seven-day average of outbound oil transits through the Strait of Hormuz is reported to have hit nearly 12 million barrels a day as of Sunday, boosted by increasing supply from the UAE, Kuwait, Saudi Arabia and others as more Gulf countries shift to daytime escorted transits.
Despite this – it is the EW pipeline outage and its ongoing vulnerabilities, along with the return of Chinese buyers, continues to drive the oil price higher.
USTechnically, the break above resistance at $105.00/25 opens the way for further gains toward the US$110.31 high from late April.
Gold
Gold finished marginally lower overnight at US$4293 (down -0.13%), coming under renewed pressure from higher energy prices, higher bond yields, a stronger dollar and risk-aversion flows ahead of tomorrow morning’s all-important Fed meeting, where a 25bp rate hike is widely expected.
Technically gold needs to reclaim the 200-day moving average at US$4539 to suggest the pullback from the US$4697 high is complete and the uptrend has resumed.
Until then allow for a deeper decline back toward support at US$4200.
Technical limitations
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