Technicals | 10:30 AM
Earlier today, Tony Sycamore, Market Analyst, IG shares his technical views on the Nasdaq, ASX200, gold and crude oil, including the technical analysis updates.
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 to new record highs confirmed that the Wave iv pullback from the mid-August high of 23,969 concluded in early September at the 22,977 low.
The push to new record highs also met the minimum requirement for a Wave V, within our preferred Elliott Wave framework.
The extension of the Wave V rally will depend on whether it can break above the weekly trend channel resistance, currently near 24,150ish (weekly close). If it succeeds, there is potential for the Wave V to extend towards 25,000ish.
Conversely, if the Nasdaq100 post the FOMC meeting closes back below trend channel resistance (weekly close) and falls below support at 23,500ish coming from the late July high 22,959, it would be an initial indication that the Nasdaq100 has completed a five-wave advance from the April lows and that a corrective pullback is underway, initially towards 22,500 with scope towards 22,000.
ASX200
The heavy fall in the ASX200 at the start of this month and the subsequent sideways price action has helped work off overbought readings.
Ideally, we would like to see the current pullback extend into the 8630/00 support band, which would account for a neat -5% pullback from the 9054.5 record high.
However, should the ASX200 first reclaim resistance at 8880/8900ish, it would be an initial indication that the correction is complete at the recent 8731 low, and the uptrend has resumed.
Crude Oil
WTI Crude Oil finished higher overnight at US$64.55, up 2.01% extending its gains as Ukraine continues to successfully target Russian oil infrastructure, disrupting supply.
A weaker US dollar, driven by expectations of a Federal Reserve rate tomorrow further supported gains for crude oil.
Technically, crude oil appears to have found a new trading range, with the upper boundary formed by the early September high of around US$66.00 and reinforced by the 200-day moving average at approximately US$67.06/bbl.
The recent double low at US$61.45, defining the lower bound of the range.
A sustained break above resistance at US$66.00US/$67.00ish would open the way for crude oil to extend its gains towards US $70.00 and start to see things getting very interesting for crude oil.
Gold
Gold finished higher overnight at US$3689, up 0.30%, after hitting a fresh record high of US$3703 earlier in the session. Its gains came as US yields and the USD eased ahead of the expected resumption of Fed rate cuts tomorrow.
Looking ahead, while gold remains overbought in the short term, we expect dips to be well supported due to concerns about the Fed’s independence, expectations of deeper Fed rate cuts, and strong demand from central banks and private investors, which should see the yellow metal extend its gains towards the next upside target at US$3750/oz.
Technical limitations
If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.
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