Morning Technical Notes – Thursday 2 May

Today’s wrap and technical outlook for indices, commodities and currencies from CMC’s head of analysis for North America, Colin Cieszynski

Asia Pacific indices 

Australia 200 looks at risk of a correction. It has drifted back under its 5,160 breakout point and may have completed a double top while RSI has started to roll over suggesting momentum turning. Initial support near 5,100 then 5,030. 

Japan 225 is holding steady near 13,825 as it consolidates recent gains in a 13,500 to 14,000 channel within the context of a broader uptrend. 

HongKong43 briefly broke through 22.800 but then slumped back suggesting that its current rally may be tired and due for a pause with initial support near 22,650 then 22,550. 

India 50 continues to advance but has run into resistance near 5,975. In a normal correction, it could retest 5,920 or 5,870 with next resistance closer to 6,100. 

US Indices 

US30 is selling off today breaking 14,800 with RSI rolling down from a lower high indicating mo turning negative. Next key support is a key trend line test near 14,650.  

SPX500 touched a new all-time high overnight but it was not confirmed by the RSI suggesting exhaustion. It failed to break through 1,600 completing a double top and has started to backslide with initial support near 1,575-1,535.  

UK and European indices 

UK 100 tried to bounce but was unable to overcome 6,490 resistance. Initial support appears nar 6,400 then 6,350. 

Germany30 has regained 7,875 but could struggle with resistance near 8,000 or 8,130 as RSI suggests momentum stalling. Next support in a correction appears near 7,800.  

France 40 finds itself at a key turning point, it could build on its recent breakout and drive on toward 3,900 or 4,000. With stocks faltering, it could just as easily finish a double top and drop back toward 3,800 or 3,730. 

Italy 40 struggled with 17,000 and dropped back under 16,800 on Tuesday. Key support that would confirm the strength of the current uptrend appears closer to 16.650. 

Spain 35 has run into resistance near 8,500 and with RSI close to overbought, could be due for a correction with initial support near 8,410 then 8,240. 

Commodities today  

Gold continues to consolidate between $1,455 and $1,485 but RSI inability to retake 50 suggests rebound may be stalling. $1,445, a Fibonacci level, remains a key indicator of the strength of support. 

Silver has drifted back under $24.00 once again, which along with a failure of RSI to break out suggests that it may be resuming its broader downtrend. $23.50 and $22.40 emerge as key support tests. 

Copper has resumed its downtrend, falling back under $3.20 and diving toward $3.10 with key long-term support looming near $3.00. 

US crude is being knocked back down today dropping toward $91.00 after breaking down though $93.00 yesterday. Next key support appears near $89.00. 

UK crude has dropped back toward $100.00 where a breakdown would indicate that its primary downtrend has reasserted itself after a false breakout. Next support near $99.00 then $95.60 with resistance near $102.30 and $104.00. 

Gasoline has slipped back from $8.85 under $2.80 with key support in place near $2.70. 

Natural Gas remains well supported near $4.35 within a $4.20 to $4.45 trading channel but falling RSI suggests upward momentum continues to slow. 

FX this morning 

NZDUSD has been pounded hard and knocked back under $0.8500 from $0.8580 resistance. Next support appears near $0.8480 then $0.8400 

AUDUSD has been hit hard, diving from $1.0370 for nearly a penny loss. RSI rolling down from 50 suggests momentum remains negative leaving the door open to potential restests of $1.0220 or $1.01090. 

USDJPY is teetering on the edge of a breakdown, testing 97.00 as it continues to fall away from a double top near 100.00. Next support appears near 95.80 then 94.30. 

AUDJPY appears poised for a breakdown with the pair testing 100.00 and RSI falling under 50 to suggest mo turning into JPY’s favour. Trend support appears near 99.00 followed by 97.00. 

EURJPY is holding steady near 128.25 within a 127.30 to 131.00 trading channel with next potential support on a breakdown near 126.00.

About Colin Cieszynski

Colin Cieszynski, has been a Senior Market Analyst with CMC Markets Canadian office since 2007. Colin has provided trading insights to individual and institutional clients for over twenty years both as an analyst/strategist and investment advisor, with additional experience in investment banking and syndication. Colin tracks economic and market trends for Global indices, North American stocks, commodities and currencies utilizing both fundamental and technical analysis techniques. He has completed both the Chartered Financial Analyst and Chartered Market Technician programs.
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2 Responses to Morning Technical Notes – Thursday 2 May

  1. bka says:

    Hi Colin,
    I;m a newbie and a keen follower of your Morning Technical Notes columns. I usually won’t start trading before reading them. However, I;m in a different time zone downunder. I just wondered whether you may be able to share the secrets of how you derive your support and resistance levels which are usually pretty spot on. For instance, your notes for Thursday 2 May show 22,650 and 22,550 as support levels for HongKong43, and 5100 for Australia200 – spot on! Which time charts did you select and which CMC tools do you normally use?

    Kind regards,
    Ray

    • Colin Cieszynski says:

      Hi Ray,

      To generate support and resistance objectives, I use a combination of methods including previous support and resistance points, trend lines, fibonacci retracement levels, large numbers and measured moves from patterns.

      I have found that where a number of objectives cluster together, the higher the level of confidence they may be achieved.

      I normally start with 1 day 1 year charts but will shorten to 6 month or less and to 4 hour or 1 hour charts to fine tune as needed.

      I use a broad variety of tools mostly drawing tools. Note that a lot of the charts that go along with my notes can be found in the chart message boards feature.

      Cheers
      Colin

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