Technicals | 10:30 AM
Earlier today, Tony Sycamore, Market Analyst, IG updated his views and thoughts on financial markets, including the technical analysis.
First Up, Nasdaq100
The Nasdaq100 began a correction after hitting its late-October record high of 26,182, before bottoming at the late March low of 22,841.
From those lows, the index launched a powerful rally that has now brought it within just -1% of the 30,000 psychological milestone —a level we first flagged on 20 April— well ahead of our original year-end target.
Last week, the index printed a clear “loss of momentum” weekly candle. The same pattern appeared across the S&P500 and Dow Jones, signalling that the strong uptrend is pausing and a period of consolidation or modest pullback may now be underway.
How long and how deep this pullback develops will likely hinge heavily on Nvidia’s earnings report later this week.
A decisive break and close above last week’s high of 29,678 would reaffirm bullish control and open the door for fresh all-time highs, potentially targeting 32,500.
However, while the index remains below last week’s high, we should allow for a corrective pullback, with 27,000 acting as a logical retest zone to rebuild energy for another leg higher.
ASX200
After rebounding sharply from its late-March low of 8262, the ASX200 surged to a mid-April high of 9021.5.
The index has spent the past month giving back a large portion of those gains, culminating in test of 8500 earlier this week.
The ASX200 needs to reclaim short term resistance (formerly support) at 8620/30ish and then the 200-day moving average near 8800 to ease the current downside pressure and stabilise the picture.
Until then, the risks remain tilted lower, with the next significant support target sitting around 8400.
Crude Oil
WTI Crude Oil (July) settled lower at US$104.03, down-0.43%, in one of the quietest trading sessions since the Middle East conflict began.
The session was dominated by another wave of de-escalatory headlines from the US regarding peace talks and Iran’s supposed interest in a deal.
These reports had little lasting impact: Tehran has yet to publicly confirm them and continues to reiterate its own demands, while the market has grown numb to the familiar narrative.
Adding to the pressure, the US imposed fresh sanctions on Iranian financial entities while issuing new waivers for Russian crude and petroleum products already loaded on tankers.
Meanwhile, the North Atlantic Treaty Organization (NATO) is reportedly discussing the possibility of helping ships pass through the strait if it isn’t fully reopened by early July.
While the Strait remains blocked and the geopolitical waiting game continues, oil bulls did receive a late boost.
The American Petroleum Institute (API) reported a large -9.10-million-barrel draw in US crude inventories for the week ending May 15, exceeding the -3.4 million barrels draw the market was expecting.
Technically, the pullback from the March 9th high of US$119.48 over the past two months appears corrective.
Provided WTI holds above the key US$76–US$79 support zone, there is potential for a retest and break of that March high.
Gold
Gold finished lower overnight at US$4482, down -1.84%, its lowest level in nearly eight weeks.
The decline came as the precious metal faced a trio of headwinds: rising US yields, a stronger US dollar, and continued weakness in US equities.
All material has been re-published with permission and views expressed do not by association represent FNArena’s.
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