Technicals | 10:30 AM
Earlier today, Tony Sycamore, Market Analyst, IG updated his views and thoughts on financial markets, including technical analysis updates.
First Up, Nasdaq100
From its late-March low of 22,841, the Nasdaq100 launched a powerful 35% rally in just over nine weeks to reach a record high of 30,762 in early June.
The move was in line with our bullish outlook back in mid-April, although it hit the 30,000 target some six months earlier than we had anticipated.
Since then, we have been looking for a correction back towards the 28,000ish support area, which has played out largely as expected — apart from last Wednesday’s sharper downside move promptly reversed the following session.
With the Nasdaq100 now well and truly back within its bullish trend channel, we think the correction from the 30,762 high is likely complete at last week’s 27,176 capitulation low and the uptrend has resumed.
In summary – provided the Nasdaq100 remains above last week’s 27,176 low we are looking for a retest and break of the 30,762-record high, with scope towards 32,000.
ASX200
After last week’s attempt to break above the top of the 8500–9000 range failed to attract any follow-through buying, the ASX200 regrouped and made a second attempt yesterday.
The index pushed to a fresh five-month high of 9145.8, just -57 points (-0.62%) below its 9202.9 record high from late February this year.
Providing the ASX200 can hold above Monday’s 8940 low, a break of the record high appears increasingly likely, before a push to 9350.
Crude Oil
WTI Crude Oil finished lower overnight at US$75.14 (-6.15%), some -20% below its recent US$93.50 high.
The decline comes on hopes of a diplomatic breakthrough between the US and Iran, with Treasury Secretary Scott Bessent saying overnight there was a chance of a deal as soon as today or tomorrow that would reopen the Strait of Hormuz and allow commercial shipping to move more freely.
There are conflicting reports circulating on whether a US-backed Omani proposal —under which vessels would enter the Persian Gulf via an Iranian-controlled route and exit under Omani oversight— has been rejected by Iran.
While keeping across the fast-evolving diplomatic headlines is a challenge, the main sticking point appears to be whether Iran will continue to insist on a degree of control over the waterway, and whether the US will stand its ground and refuse that outcome.
Iranian control over the Strait where it would charge fees for passage would make it very difficult for the Trump Administration to put a positive spin on the outcome of Operation Epic Fury.
With so much optimism now priced into the oil market — and the risk of a repeat of last week’s false dawn still very real — the balance of risks appears to be becoming more skewed back to the upside.
Gold
Gold finished marginally higher overnight at US$4077 (0.24%) continuing to trade within the US$4000-US$4200 range it has occupied for the past month.
To signal that a break higher may be underway, gold first needs to clear downtrend resistance near US$4080 (drawn from the mid-May high of US$4595) on a closing basis and then clear the early-July high at US$4202.
This would open the way for a rally towards the 200-day moving average around US$4490.
Until then the risks are for a retest and potential break of the late-June low at US$3942.
All material has been re-published with permission and does not by association represent FNArena’s views.
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