Technicals | 10:30 AM
Earlier today, Tony Sycamore, Market Analyst, IG updated his views and thoughts on financial markets, including the technical analysis updates below.
By Tony Sycamore
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 correction that followed into the late-July low of 27,176 played out largely as expected.
In early August, we declared the correction complete and shifted to a bullish bias after the index sharp rebound in late July and its closed above 28,500. However last week’s rejection from trend channel resistance 30,200 was a setback to this view.
Nonetheless, as long as the Nasdaq100 holds above short-term support at 28,800ish we will stay with the bullish view, aware that a sustained break below 28,800ish would open the way for a retest of trend channel support now near 27,600.
ASX200
The ASX200 spent the better part of 17 weeks confined within an 8500–9000 range before releasing that pent-up energy at the start of August and hitting a fresh record high of 9296.7.
From that high we were expecting a pullback towards support at 9000 and that view played out well with the index last week hitting a low of 9019.50.
Looking ahead, provided the ASX200 holds above the 9000/8900 support region (former top of range resistance – now support) we expect to see a retest and break of the 9296.7 record high in the weeks ahead.
Crude Oil
WTI Crude Oil finished lower overnight at US$81.11 (-4.55%), its lowest daily close in almost seven weeks. The sell-off came as the market repriced towards a period of sustained economic pressure on Iran and away from the threat of fresh US military action.
Adding to that some diplomatic signs of de-escalation have started to emerge. Pakistan’s army chief was in Tehran, Qatar said it remains active behind the scenes, and there were reports that US diplomats would soon return to the region.
A Russian news outlet also claimed a ceasefire might be close, though that one still needs to be taken with a grain of salt for now. Meanwhile ship-to-ship transfers remain busy, and the oil keeps flowing via overland routes and other workarounds.
Overall, the situation is nowhere near the oil apocalypse some of the more bullish voices had been warning about.
At the same time, it’s not a situation that that can drag on indefinitely.
Gold
Gold finished higher overnight at US$4659 (+0.17%) retreating from the US$4697 high it hit earlier in the session.
The pullback came on profit taking ahead of tonight’s Core PCE inflation release and the upcoming Jackson Hole Symposium where Fed Chair Kevin Warsh is scheduled to speak.
Some signs of de-escalation in the Middle East conflict and the sharp fall in oil and US yields which suggests further Treasury intervention may not be needed for now also weighed on the price.
Technically we suspect gold is looking for or already struck a short term high for now. Pullbacks towards the 200-day moving average currently at US$4518 are expected to attract buyers looking for gold to push on towards the next upside resistance at US$4900/US$5000.
All material has been re-published with permission and does not by association represent FNArena’s views.
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