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.
By Tony Sycamore
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
Following Friday’s rebound in the Nasdaq100, there is a risk that the Wave IV pullback ended at last Wednesdays 22,959 low.
If the Nasdaq100 holds above last week’s 22,959 low and the early August 22,673 low, allow for a retest of the mid-August 23,969 high, with a break above here and then above weekly trendline resistance currently at 24,000ish indicating that Wave V higher has commenced towards 24,750ish.
Aware that while the Nasdaq100 remains below 24,000, there remains the possibility that the Wave iv pullback is playing out.
ASX200
After spending the last two weeks of July consolidating its gains above 8600, the ASX200 has continued marched higher in August, to hit a fresh record high yesterday at 9054.5, some 25% above its April 7169 low and 105% above its Covid crash 4402 low.
With the RSI on the weekly chart now at its most overbought level since August 2021 and following the formation of a “loss of momentum” daily candle yesterday, we are becoming increasingly cautious about the ASX200’s upside prospects from here.
If the ASX200 were to fall below short-term support at 8800/70ish, it would be an initial indication that a medium-term high is in place at 9054.5 and that a deeper pullback initially towards 8620/00 is underway, with scope to 8400.
Crude Oil
WTI Crude Oil finished lower overnight at US$63.31/bbl (-2.21%) as Ukrainian attacks on Russia’s domestic energy infrastructure have freed up 200,000 more barrels of crude oil for export markets.
Also adding to the downside pressure, reports that US and Russian officials have discussed joint energy development projects while on the sidelines of recent Ukraine – Russia peace talks.
Chart wise, crude oil overnight has seen solid rejection from our US$64–$65 resistance level, which is a set back to the bullish case for crude oil.
While below this key resistance, crude oil is vulnerable to a test of support near US$60.00/bbl.
Gold
Gold finished higher overnight at US$3393/oz (0.83%), extending its gains after President Trump said he was firing Fed Governor Lisa Cook.
This move has reignited concerns about the Federal Reserve’s independence and its ability to maintain impartial monetary policy free from political influence.
Such developments could potentially trigger a rerun of the “Sell US assets” theme that emerged earlier this year, which would create an extremely supportive backdrop for gold.
Technically, a sustained break above downtrend resistance at US$3425ish drawn from the US$3500 high would be a bullish development.
As would be a sustained break above recent range highs US$3430/50ish, paving the way for a test and break of the US$3500 record high, before a move to US$3700/oz.
Technical limitations
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