Technicals | 11:00 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
Post the Nasdaq100’s surge higher on the 12th of May, we have been working with the view that the rally in the Nasdaq100 from the 21st of April 17,592 low is a Wave iii (Elliott Wave) that should be followed by a Wave iv pullback.
The rebound this week from our key 21,500/450ish support zone suggest the Wave iii is extending and the Wave iv pullback has been postponed yet again. A break above the February 22,222-record high now appears to be just a formality.
ASX200
After the ASX200 hit a new record high of 8639 earlier this month, we noted that the RSI index was at its most overbought level since December 2023 (which was followed by a -4% pullback).
The -2.5% pullback since then into Mondays 8421.1 low helped the index work off overbought readings and was orderly, even begrudging which indicates the move lower has been a correction rather than the start of an impulsive move lower.
In summary, providing the ASX200 holds above support at 8420/8400 (sustained basis as always), the view is the correction from the 8639 high is complete at Monday’s 8421.1 low and that a retest and break of the 8639 high will likely be forthcoming.
Crude Oil
WTI Crude Oil finished lower overnight at US$65.01(-3.30%) consolidating its losses on signs the Iran-Israel ceasefire is holding. There remains unanswered questions around the whereabouts the 400kg of Iranian uranium and whether the current Iranian regime will retain power.
Technically, this week’s sell-off in crude oil re-established the downtrend while reinforcing the importance of a layer of resistance between US$78.40ish (October 2024 and June 2025 highs) and US$80.77 (the year-to-date high).
It’s clear that it will take something extremely unexpected and detrimental to the supply/shipping of crude oil to break through this layer of resistance.
On the downside, crude oil is testing and thus far holding the US$65US$/64 support region (formerly resistance and the top of a two-month range). It needs to continue to do so otherwise a deeper setback to US$60 will likely follow.
Gold
Gold finished lower overnight at US$3323 (-1.36%), as safe haven flows headed for the exit on signs the Iran-Israel ceasefire is holding.
Technically, while gold remains above uptrend support at US$3300US$/3290ish (sustained basis) a retest and break of the record US$3500 remains possible.
However, should gold fall below support at US$3300US$/3290ish it would warn that a deeper pullback towards the May US$3120 low is underway.
Technical limitations
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