Morning Technical Notes – Thursday 30 May

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

 

Asia Pacific indices

Australia 200 has stabilized in the 4,940 to 5,000 area, but it remains to be seen if this is the start of a base or a pause in a bigger correction. Next support near 4,850 with next resistance near 5,115.

China A50 failed to clear 8,400 and with its peers under pressure, could drop back to retest Fibonacci support near 8,120 again.

Japan 225 continues to weaken, breaking down through 14,000 today while resistance falls toward 14,540 and RSI remains below 50, confirming that momentum has turned negative. Next potential support appears near 13,675 a prior low then 13,580 and 13,120 a 38% retracement of the previous uptrend.

Hong Kong 43 has fallen from the top toward the bottom of its 22,500 to 22,900 trading channel as RSI under 50 suggests momentum turning negative. Next potential support on a breakdown appears near 22,275 then 22,000. 

India50 is consolidating near 6,100 but a lower high and falling RSI momentum suggest that 5,950 or 5,800 support levels could be retested sooner than 6,250 current resistance. 

US Indices

US30 has drifted back into the middle of a 15,130 to 15,530 trading channel. RSI has rolled back under 70, a bearish sign that a deeper correction may yet unfold where 15,000 or 14,800 could be retested.

SPX500 continues to sink, currently testing 1,650 with next support near 1,635 then 1,600 with resistance growing near 1,660 followed by 1,685. 

UK and European indices

UK 100 continues to break down. It failed to retake 6,750 in early trading and has been steadily dropping, taking out 6,660. RSI continues to drop suggesting upward momentum fading. Next key downside support appears near 6,540, a previous breakout point.

Germany30 keeps weakening, dropping back under 8,400 today. Falling RSI also suggests momentum shifting from positive down into neutral at least. Initial Fibonacci support in a correction appears near 8,290 then 8,125. 

France 40 continues to encounter resistance at a lower high near 4,040 and broke down through 4,000 again today suggesting it continues to roll over with next support near 3,900 then 3,800.

Italy 40 is weakening again with resistance falling toward 17,500 as upward momentum fades. A break of 17,180 would fill in a gap and confirm renewed distribution with next support near 17,000 then 16,650.  

Spain 35 continues to bounce around an 8,250 to 8,700 trading range, currently sitting just below the centre. 

Commodities

Gold continues to form a bullish ascending triangle base below $1,400, with key support currently in place near $1,380. Next resistance on a breakout near $1,420 with next support on a breakdown near $1.360.

Silver remains well supported above $22.00 as base building continues although a descending triangle suggests this may be another pause in a wider downtrend. It needs to clear $23.50 to signal an upswing with next resistance after that near $25.00.

Copper is sending lots of neutral signals at the moment with RSI on 50, a symmetrical triangle forming between $3.22 and $3.37 and a wider channel building between $3.20 and $3.40. 

US crude fell toward the bottom of its $92.00 to $07.00 trading channel ahead of tomorrow’s storage numbers. RSI suggests momentum neutral but turning negative.

UK crude broke a short-term uptrend and has kept on falling, dropping from near $104.00 toward $102.50 with next support near $101.00 and the key $100.00 level.  

Gasoline has fallen back under $2.80 and appears poised for a retest of $2.70. On a bounce, resistance appears near $2.83 then $2.89 and $2.95.

Natural Gas remains under $4.20 as it falls back from a lower high with next support near $4.00 then $3.85.

FX

NZDUSD continues to attract bargain hunters in the $0.8050 to $0.8160 range as a big selloff subsides. RSI suggests momentum turning upward again. Next resistance on a breakout appears near $0.8220 then $0.8300.

AUDUSD dipped down toward $0.9530 then bounced for a penny in what looks like a bear trap reversal that coincides with a positive RSI divergence, signs that suggest the recent selloff may be over and a rebound underway. Initial resistance appears near $0.9720 then $0.9860.

USDJPY continues to roll over. Although it has bounced up off of 100.60, resistance has fallen toward 102.50 and RSI keeps suggesting momentum changing direction. A break of the 100.00 barrier would confirm a new downtrend with next support near 97.00.

AUDJPY continues to form a descending triangle above 97.00 as a new downtrend emerges below 99.00. Next resistance on a breakdown appears near 95.10.

EURJPY is forming a descending triangle suggesting that its recent uptrend has peaked. A break of the pair through 130.00 or the RSI through 50 would confirm a major trend change with next downside support near 127.30.

 

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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