Technicals | 10:59 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
The Nasdaq100 began a correction after hitting its late-October record high of 26,182, eventually bottoming at the recent low of 22,841.
At no point did the pullback appear to be anything other than a healthy technical correction following its strong rally from the Liberation Day lows.
Last week’s push to record highs fulfilled our minimum upside objective and we note the rally has extended into overbought territory which warns a period of consolidation is likely underway.
For those with a longer-term horizon who are comfortable with periods of consolidation, there is no reason the current rally cannot mirror the powerful move seen after the Liberation Day lows and head to 27,500 before 30,000 by year-end.
ASX200
From its all-time high of 9202.9 in late February the ASX200 fell -940 points or -10.2% to a low of 8262 on 23 March. That session produced signs in the shape of an exhaustion candle.
The strong rally in April which lifted the index back to the psychologically important 9000 level has reinforced the view the 8262 low marked the end of the correction and that the broader uptrend has resumed.
A sustained break above resistance at 9000–9020 would open the way for a retest of the all-time high at 9202.9.
A decisive move above that level would then open the way for the rally to extend towards 9400–9500.
On the downside, solid support lays at 8800 coming from the 200-day moving average which currently sits at 8795.
Crude Oil
WTI Crude Oil finished higher overnight at US$90.22 (up 2.80%), easing from an intraday high of US$92.23 after President Trump extended the US ceasefire with Iran.
Trump noted Iran’s government appears “seriously fractured”, highlighting the clear divide between the hardline IRGC, which seems intent on continuing the conflict with the US, and the more diplomatic moderates leading the ceasefire negotiations.
This internal split looks to be the biggest obstacle to any permanent ceasefire deal, and how it is resolved remains to be seen.
While technicals will play second fiddle to geopolitical developments, the crude oil chart has turned increasingly bullish.
If crude holds above the key US$76–US$79 support zone and then reclaims resistance at US$93 on a sustained basis, it will open the door to a retest —and potential break— of the US$119.48 high.
Gold
Gold finished lower at US$4720 (down -2.06%) extending its decline from Fridays US$4891 high as a stronger US dollar, higher yields and lower equities all weighed on bullion.
Consistent with our recent observations, gold continues to trade more like a risk asset than a classic safe haven, reflecting the strong retail inflows into the precious metals sector on its run to record highs.
Technically, as long as gold remains above the March 23rds swing low of US$4098, we anticipate further upside toward the key psychological level of US$5000/oz.
From there, it is expected to challenge the all-time record high of US$5602, though the move higher is likely to be a steady grind rather than an explosive rally.
Technical limitations
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