Technicals | 10:30 AM
Earlier today, Tony Sycamore, Market Analyst, IG updated his views and thoughts on financial markets, including the technical analysis.
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
Last week, the Nasdaq100 fell to its lowest level in two and half months.
This followed the formation of a potential double top, a “loss of momentum” type weekly candle and continued bearish divergence on the RSI and between the three key US indices.
While the Nasdaq100’s sharp rebound on Friday has eased downside risks, it needs a sustained break above the 26,150/200 resistance area to reignite its upside prospects.
Until then all for the correction in the Nasdaq100 to continue to play out, which could see a test of the 200-day moving average at 23,700.
ASX200
The wild end to last week saw the ASX200 break briefly below the 200-day moving average at 8692.3, before running into support ahead of the Year to date low of 8675.6.
Monday’s stunning rebound from this support zone keeps the ASX200 on track to continue its volatile rebound from the November 8383 low, towards the 9115.2 record high.
Aware that a sustained break below the 8692/75 area would warn that a retest of the November 8383 low is underway.
Crude Oil
WTI Crude Oil is trading lower at US$64.10, down -0.50%, easing back towards US$64.00 as the market digests the recent signs of diplomatic progress between the US and Iran, following recent talks and reduced rhetoric.
Traders are also eyeing upcoming US inventory data for fresh clues on US supply dynamics after last week’s big draw.
Technically, crude oil remains within the US$55–US$66/bbl range it has spent the past five months.
Gold
Gold is trading lower at US$5031 (down -0.51%), ahead of tonight’s non-farm payrolls report which is likely to be the next catalyst for markets.
We suspect the risk is for a weaker NFP number.
Arguably the market is already positioned for that outcome after Hasset warned of weaker labour market in the coming months.
In the medium term, a long list of tailwinds remains bullish for gold.
These include worries over US debt sustainability, dollar weakness, persistent inflation pressures, and the appeal of diversifying into real assets.
Additionally, stretched equity valuations, geopolitical concerns, questions regarding Fed independence, and uncertainty around US trade and policy directions continue to provide support.
In the weeks ahead, we look for a range in gold that might look something like US$4700/US$5300, driven towards range extremes by geopolitical headlines and incoming US data.
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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