Morning Technical Notes – May 22

Today’s technical notes from our North American analyst, Colin Cieszynski:

Asia Pacific indices

Australia 200 continues to move into a sideways channel between 5,150 and 5,250. Next support on a breakdown could appears near 5,100 then 5,000.

Japan 225 rallied up to a new another new high yesterday. RSI is extremely overbought suggesting a high risk of a swift correction. Could today’s BoJ be a catalyst? Next major resistance near 16,000 with initial support near 15,375 then 15,000.

China A50 continues to recover, rallying up toward 8,400, a key Fibonacci level, before dropping back to conduct a normal test of 8,250 former resistance as new support. Next significant potential resistance near 8,550 then 8,625.

HongKong 43 is hanging around 23,350 consolidating a recent rally. Breakaway gap has become support, a bullish technical sign. Next key resistance appears in the 23,480-23,520 area.

India50 successfully retested its 6,100 breakout as new support, keeping its uptrend intact with initial resistance in place near 6,250. Additional support possible near 5,980.

Singapore 30 has started to backslide with overbought RSI suggesting index may be getting due for a correction. Initial support near 3,400 followed by the 3,335 recent breakout point.

US Indices

US30 remains in an uptrend but appears to be pausing for a rest in the 15,300 to 15,400 area to work off an overbought RSI with next support near 15,210.

SPX500 has backed away from yesterday’s new high near 1,675 back toward 1,665 a previous measured objective. Overbought RSI suggests it’s due for a rest. Initial correction support near 1,645.

UK and European indices

UK 100 broke through 6,750 to a new all-time high yesterday. Overbought RSI suggests a retest of the breakout point appears possible. Next measured resistance levels appear near 6,800 then 6,880.

Germany30 is consolidating recent gains in the 8,400 to 8,500 zone although an overbought RSI suggests a correction back to retest 8,350 or even 8,250 can’t be ruled out.

France 40 is consolidating recent gains in the 4,000-4,040 area with next key resistance near 4,150 and more support near 3,900.

Italy 40 ran into resistance near 17,700 and has dropped back a bit. A break of 17,360 would suggest that the current normal consolidation has become a deeper correction where 17,000 could potentially be retested.

Spain 35 continues to bounce around between 8,300 and 8,700. A triple top and falling RSI suggest, however that momentum may be turning downward with next support near 8,175 then 8,000.

Commodities

Gold has dropped back toward $1,375 after a big bounce ran into resistance near $1,400. With support coming in near $1,370, a bullish reverse H&S base appears to be forming.

Silver is consolidating in the lower half of its $22.00-$24.50 trading channel. A big selloff down toward $20.00 combined with a big key reversal bounce and positive RSI divergence suggests the bears may be washed out for now.

Platinum is trying to stabilize in the $1,445 to $1,485 range. It has established an encouraging higher low but needs to clear $1,500 to confirm the start of a new advance.

Copper remains in an uptrend, confirmed by rising RSI momentum. Currently trading between $3.26 and $3.36 with next resistance near

US crude is testing a key downtrend line near $96.50 today with next upside resistance near $98.00 then $100.00. Initial support appears near $94.50 then $92.00 should it falter again.

UK crude remains in an uptrend consolidating between $104.00 and $106.00 although RSI suggests upward momentum losing steam. Next support on a breakdown appears near $101.50.

Gasoline remains in an uptrend, currently hovering near $2.90 with next resistance near $2.95 and $3.10 and support rising toward $2.84.

Natural Gas continues to drive toward a potential retest of $4.20 with next resistance after that near $4.45 as it bounced up off of $3.845 and through $4.00. RSI indicates upward momentum accelerating once again.

Corn has broken down through $6.50 once again and a retest of $6.30 or $5.85 appears possible with an RSI breakdown suggesting that momentum turning increasingly negative once again. Resistance falls toward $6.65 with a descending triangle forming.

Soybeans are bumping up against channel resistance near $15.00 and appear to be running out of gas. Initial support in a correction near $14.65 then $14.25. Initial resistance on a breakout appears near $15.30.

Wheat has started to drift lower again with the price and RSI both breaking uptrend support lines. A retest of support in the $6.40 to $6.55 area appears possible in the near term with initial resistance near $6.95.

FX

NZDUSD bounced up off of $0.8050 easing an oversold RSI but has started to struggle with $0.8160, a previous support level it needs to clear to call off the current downtrend. Next key test near $0.8300 if successful.

AUDUSD has bounced up from $0.9720 support but has struggled with $0.9860 initial resistance. RSI remains oversold but it needs to show more to break the current downtrend. Next support near $0.9600 on another breakdown.

USDJPY has drifted back from 103.50 toward 102.50 in normal consolidation. RSI has broken down through 70 from overbought, a bearish signal that suggests the pair could drop back to test 101.75 or even 100.00 in a normal correction.

AUDJPY has broken trend support but needs to decisively fall below 100.00 to confirm the trend has shifted in JPY’s favour. Initial resistance on a bounce near 102.50.

EURJPY continues to consolidate its recent breakout in the 131.00 to 133.00 range with next measured resistance on a breakout near 135.00 and correction support near 130.00 then 137.30.

USDSGD continues to soar, building on the back of last week’s breakout over $1.2560 which has become support, the pair has been driving toward $1.2600 with next potential resistance on trend near $1.2660.