Technicals | 11:20 AM
Tony Sycamore, Market Analyst, IG shares his technical views on the Nasdaq, ASX200, gold and crude oil.
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
Last week’s rally in the Nasdaq100 saw it rebound towards weekly trend channel resistance, currently just above 24,000, leaving things finely balanced at the start of the new week.
Should the Nasdaq100 break above the 23,969-record high and it then sees a sustained break above trend channel resistance at 24,000/100ish, it would indicate the Wave iv correction is complete and uptrend has resumed with scope for a Wave v towards 25,000.
Conversely, if the Nasdaq100 starts the week on the back foot and falls below support at 22,959 coming from the August 20 low and then below the 22,673 low from August 1, it would greatly increase the likelihood that a deeper Wave iv pullback towards 22,200/22,000 is underway.
ASX200
Last Tuesday’s fall in the ASX200, helped work off extreme overbought readings on the weekly chart.
Ideally, we would like to see the recent pullback extend into the 8630/00 support band which would account for a neat -5% pullback from the 9054.5 record high.
Aware that should the ASX200 first reclaim resistance at 8900/20, it would likely indicate the correction is complete at the recent 8731 low, and the uptrend has resumed.
Crude Oil
WTI Crude Oil finished higher overnight at US$62.77 (0.50%) easing from the US$63.67 high it reached earlier in the session following reports that Israel attacked members of the Hamas leadership in Qatar.
The modest reaction in crude oil prices to this news, along with scepticism regarding US President Trump’s claims about potentially ramping up sanctions on Russian oil after a Russian attack on a Ukrainian government building over the weekend, leaves crude oil vulnerable to lower prices.
Technically, while crude oil remains below last week’s US$66.00 high and below the 200-day moving average at US$67.20ish, the risks are for a retest of support at US$60.00, before a move to US$55.00.
Gold
Gold finished lower overnight at US$3626 (-0.26%), retreating from an intra day high of US$3674. The retreat in gold came as traders squared up long positions in gold and shorts in the US dollar after the large US labour market revisions and ahead of upcoming US PPI and CPI data.
Nonetheless due to ongoing concerns about the Fed’s independence, fiscal concerns, expectations of deeper Fed rate cuts, and strong demand from central banks and private investors, dips in gold are likely to be well supported.
Technical limitations
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