Morning Technical Notes – Friday 17 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 continues to increasingly trend lower, with 5,200 emerging as new resistance and RSI remaining under 50. It would need to clear 5,220 to call off a rising wedge break. Next support appears near 5,150 then 5,125.  

Japan 225 is back testing 15,000 as new support. RSI remains overbought and has started to roll over suggesting the risk of a significant correction remains high. On a breakdown initial support may appear near 14,800 or 14,560 

HongKong43 continues to consolidate near 23,000, bouncing around in a channel between 22,890 and 23,340.  

India50 continues to advance with next resistance on t4rend near 6,260 and initial support near 6,100 a previous resistance level. 

US Indices 

US30 has been consolidating recent gains in the 15,200 to 15,300 area with next support near 15,060 and next measured resistance near 15,400.  

SPX500 is struggling with 1,660 as RSI remains overbought suggesting its due for a trading correction. On a break through 1,650, it could easily drop back to retest 1,645 or 1,625. 

UK and European indices 

UK 100 continues to stall near 6,700 just short of key 6,750 resistance. With RSI overbought it looks due for a pause or correction with initial support near 6,660 then 6,540.  

Germany30 touched another new high today but failed to break through 8,400. RSI suggests index is overbought and due for a correction where 8,320 or 8,240 could be retested initially. 

France 40 is sitting just below the big 4,000 level, consolidating recent gains above 3,900 with potential resistance near 4,040 and 4,150. 

Italy 40 continues to advance today, confirming yesterday’s breakouts over 17,360 and 17,500 which may become support levels with next resistance near 17,680 then17,900. 

Spain 35 is sitting just above 8,500 and the middle of its current 8,300-8,700 trading channel. 

Commodities  

Gold dropped overnight but has started to find support near $1,370. Oversold RSI suggests its due for a trading bounce that could carry it back toward $1,400 or even $1,420 but it really needs to clear $1.445 to call off its current downtrend. 

Silver successfully retested support at the low end of its $22.00 to $24.50 trading channel and has bounced back toward $22.50. An emerging positive RSI divergence suggests downward momentum may be slowing. 

Copper is trying to stabilize in the $3.20-$3.30 area. 

US crude has rallied toward $95.00 but remains in a downtrend of lower highs unless it can clear $95.75 to start and $96.60 to confirm. Support appears near $93.00 then $91.75. 

UK crude continues to turn higher, breaking through $104.00 once again while RSI continues to move up from 50, both indicating upward momentum accelerating. Next key resistance looms near $105.60 then $106.60. 

Gasoline is breaking out today, clearing $2.89 with next resistance near $2.95 and $3.10 and support rising toward $2.85. 

Natural Gas has been knocked back under $4.00 today but remains supported above $2.85 for now with next support in a deeper correction closer to $3.65. 

FX  

NZDUSD has bounced around a lot today between $0.8140 and $0.8280 as bears battle it out with bargain hunters. $0.8160 remains a key support test followed by $0.8100 and $0.8050. 

AUDUSD has broken down through $0.9860 with next key support on trend near $0.9700. It has become quite oversold however and could easily stage a bounce but would need to clear $0.9910 to signal the start of a significant upswing. 

USDJPY remains steady near 102.00 but a negative RSI divergence suggests upward momentum is slowing and it could have trouble with 103.00 measured resistance. Initial support in a correction appears near the key 100.00 level followed by 98.50. 

AUDJPY continues to consolidate between 100.00 and 102.00. A break of 100.00 would be significant as it would take out psychological support and a key trend line. Next support on a breakdown appears near 99.20 then 97.00. 

EURJPY continues to drift back toward its 131.00 breakout point from 132.80 as a growing negative RSI divergence suggests upward momentum is fading. On a breakdown, next support may appear near 130.00 then 128.90.

 

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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