Morning Technical Notes – Tuesday 28 May

Today’s wrap and technical outlook for indices, commodities and currencies

Asia Pacific indices 

Australia 200 is trying to stabilize in the 4,925-4,975 area, but the confirmed break of 5,000 and RSI not being oversold suggests that it could still fall further with next support in the 4,850-4,890 area.

Japan 225 continues to retreat, taking out 14,216 the 23% retracement of previous uptrend, and 14,000. Initial support has appeared near 13,675 but a 38% retracement toward 13,120 can’t be ruled out.

ChinaA50 is building support above 8,120 near a common 50% retracement of its previous uptrend. Initial resistance appears at the 38% level near 8,420 with next support on a rollover near 7,820, the 62% retracement level.

Hong Kong 43 successfully tested 23,500 suggesting slower Chinese growth has been priced in already. It needs to retake 22,900 to call off the current downtrend with a retest of 22,500 possible on a breakdown.

India50 has staged a nice bounce up off of 5,950 back up above 6,000 while RSI has held 50. It needs to clear 6,100 to call off the current downtrend and a potential H&S top with next resistance near 6,250.

Singapore30 successfully tested trend support as a correction eased overbought conditions. Support appears near 3,360 then 3,335 with resistance in place near 3,430 then 3.480. 

US Indices 

US30 is holding near 15,350 but with RSI still up near overbought territory, a correction back toward 15,140 or 15,000 remains possible in the near term.

SPX500 continues to drift back, currently trading in the 1,635 to 1,660 area. RSI suggests overbought conditions continue to ease, but a retest of 1,600 remains possible in a correction. 

UK and European indices 

UK 100 has potential for a bit of a catch up bounce as trading resumes. Support emerging near 6,660 with resistance near 6,750. Next support on a breakdown in the 6,500-6,550 area.

Germany30 is consolidating in the 8,300 to 8,400 area but this may be a pause in a deeper correction. Fibonacci retracement support appears near 8,290 then 8,125.

France 40 is struggling with resistance near 4,000 and a lower high, suggesting that distribution continues with next support near 3,900.

Italy 40 has attracted support above 17,000 but needs to fill in the recent bearish reversal gap and clear 17,360 to call off an emerging downtrend.

Spain 35 held 8,240, the lower end of its trading channel and has bounced toward 8,360 with next resistance near 8,520 and 8,700. If support fails, however, 8,000 could be retested. 

Commodities

Gold continues to inch toward another test of $1,400 neckline resistance where a breakout would complete a reverse H&S base with next resistance near $1.420 then $1,445.

Silver’s RSI has finally broken out of a downtrend that has been in place since last September, which combined with a positive MACD divergence and continued support above $22.00 suggests its recent downtrend is drawing to a close.

Copper  remains in an uptrend above $3.26 with next resistance near $3.35 then $3.40 and support on a breakdown near $3.25 then $3.20 initially.

US crude remains in a downswing having fallen from near $97.00 toward $93.50. Next support appears near $92.00 then 89.00.

UK crude is sitting right on trend support. It needs to clear $103.00 to signal the start of a new upswing where $104.00 could be tested. A break of $102.50 would signal a new downswing toward $101.00 or even potentially $100.00.

Gasoline remains in an uptrend, currently consolidating in the $2.80 to $2.84 range with driving season getting underway. Next resistance appears near $2.96 then $3.10.

Natural Gas remains under accumulation with $4.20 becoming established as new support with next resistance near $4.36 then $4.45. 

FX

NZDUSD is trying to stabilize in the $0.0850 to $0.8160 range after a big selloff as RSI suggests the drop may have been overdone in the short term.

AUDUSD is getting really oversold on the RSI and due for a bounce as positive divergence suggests downward momentum slowing. Support emerging near $0.9580 with initial resistance near $0.90720 then $0.9860.

USDJPY remains in a downdraft still trading below 102.00 while RSI trend break suggests momentum changing course. It still needs to break 100.00 and price trend support to confirm the start of a new downtrend (JPY recovery).

AUDJPY remains in a downtrend, currently testing 97.00 with next support nar 95.00 then 92.60 with initial resistance on a bounce near 99.00.

EURJPY is trading in the lower half of a 130.00-132.00 channel. Negative RSI divergence suggests momentum is changing but a break through 130.00 is still needed to confirm a trend channel in favour of JPY with next support near 127.30

USDSGD continues to drift back from $1.2700 with resistance falling back toward $1.2660. RSI rolling back under 70 suggests momentum turning downward. Next support near $1.2580 then $1.2530.

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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