Morning Technical Notes – Wednesday 8 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 has started to encounter resistance falling away from 5,200 back toward a retest of 5,150 with potential tests in a correction near 5,100 or 5,030. 

Japan 225 keeps on climbing, rallying to test 14,225. Support moves up toward the 14,000 recent breakout point with next measured resistance closer to the 14,500 level. Overbought RSI suggests it could trade in a range for a while.  

HongKong43 is breaking out again today, driving through 23,000. It’s next major resistance test appears near 23,260 but overbought RSI suggests some consolidation near this level may be needed before advances can continue. Support rises toward 22,850. 

India 50 is breaking out again, clearing the 6,000 hurdle but faces significant potential resistance at the January high near 6,100. 

US Indices 

US30 broke through 15,000 to a new all-time high and has kept on going erasing a big psychological hurdle while rising RSI suggests upward momentum remains intact. Next measured resistance on a breakout appears near 15,400.  

SPX500 is breaking out again today, clearing 1,620 and testing 1,625 with next measured resistance on trend near 1,665. 

UK and European indices 

UK 100 broke through 6,550 yesterday to a four-year high, signalling the start of a new upleg. The recent channel measures toward 6,860 but the 2007 double top peak closer to 6,740 could present a formidable challenge first. 

Germany30 rallied to a new all-time high yesterday and remains in an uptrend. The 8,080 breakout point emerges as new support. Next potential measured resistance appears near 8,280. 

France 40 continues to climb, decisively clearing 3,900 and embarking on a new upleg with next potential side resistance tests near 4,030 then 4,150. 

Italy 40 broke through 17,000 yesterday signalling the start of a new uptrend. It’s possible the breakout point could be retested as new support. Upside resistance appears near 17,275 then 17,550. 

Spain 35 is holding above 8,500 and remains in an uptrend but could struggle with 8,720 which it has failed to breach three times this year already. Support moves up toward 8,420.  

Commodities  

Gold continues to consolidate between $1,445 and $1,485 although RSI remaining below 50 suggests it’s still struggling to build upward momentum. Next downside support near $1,400 with key resistance near $1,500. 

Silver has dropped back to test trend support near $23.40 which has held so far. An ascending triangle below $24.50 remains intact and suggests base building continues but it needs to break out of an RSI momentum downtrend to confirm. 

Platinum has slumped back under $1,500 but held $1,475 so far.It needs to retake $1,500 while RSI needs to clear 50 to break the current primary downtrend. 

Copper is sending mixed signals today. The price has slumped back toward $3.26 after failing to overcome downtrend resistance near $3.33. RSI, however, suggests momentum turning increasingly positive. 

US crude has been sliding back into the lower half of its current $94.40 to $97.00 trading range. 

UK crude faltered near $106.00 and was knocked back toward a retest of $104.00 which needs to hold to keep the current uptrend intact. Next support near $102.40 should that fail with key resistance on a rebound near $107.30.   

Gasoline is holding nicely above its $2.80 breakout point, confirming that a new seasonal upswing is underway. Next key resistance appears near $2.95 then $3.10. 

Natural Gas continues to slide after breaking $4.00 while RSI suggests momentum remains negative as this seasonal correction continues to unfold. Next support near $3.85 then $3.65 with resistance near $4.00 then $4.20. 

FX  

NZDUSD was knocked back from $0.8520 back toward $0.8460 breaking an initial trend support lilne. Next support in a deepening correction appears near $0.8400 then longer term trend support closer to $0.8320. 

AUDUSD took out $1.0220 on the RBA rate cut but appears to be stabilizing and finding some support above $1.0150. Should that fail, $1.0100 or even par could be retested. 

USDJPY has started to roll over after failing to clear 100.00 once again and looks like it has completed a triple top. Next support appears near 97.00 then 95.80. 

AUDJPY’s recent breakout attempt has been rolled back as the pair trades in the 100.00 to 102.50 zone. Next support on a breakdown, which would also take out a key trend support line, appears near 99.00 then 96.90. 

EURJPY has slipped back under 130.00 and appears to be forming a triple top below 131.00.  a break of 127.30 channel lower boundary would confirm with next support after that near 124.40.

 

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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