Mid-Week Technical Outlook: Commodities & Indices

European markets flashed green on Wednesday, tracking gains in Wall Street overnight. A less hawkish than feared Jerome Powell injected global equity bulls with renewed confidence, propelling the S&P500 more than 1%. Stock markets also drew fresh support from positive earnings which boosted market sentiment and sweetened the risk appetite. In the currency space. The dollar slightly dipped thanks to Powell, providing some room for G10 currencies to fight back. Gold continues to linger around $1880 while oil prices stabilized after rising the most in three months.

Today, our focus will be directed toward the global equity and commodity space, especially US indices which remain reactive to rate hike expectations.

S&P 500 waits for catalyst

Despite rallying overnight, the S&P 500 remains in a range on the daily charts with support at 4100 and resistance at 4200. A breakout could be on the horizon with the correct fundamental spark. Should prices breach above 4200, the next key point of interest can be found at 4320. Alternatively, a breakdown below 4100 could signal a selloff towards 3950 – a level just above the 50 and 200-day SMA.

Nasdaq eyes 12800

Just like the S&P 500, the Nasdaq 100 jumped overnight with bulls eying 12800. Overall, the Index remains firmly bullish on the daily charts as there have been consistently higher highs and higher lows while the MACD trades above zero. A solid breakout and daily close above 12800 could inspire and incline towards 13150. Should prices slip back below 12400, the Nasdaq could sink back to the 200-day SMA around 11900.

FTSE 100 hits record highs!

The FTSE100 set fresh record highs this morning after risk appetite was boosted by the rally on Wall Street overnight. Prices are trading above the 50, 100, and 200-day SMA while the MACD trades above zero. The trend remains heavily bullish with the next key level of interest found at 8000. Alternatively, a move below the 7730 support level could signal a selloff towards 7620 and 7490, respectively.

STOX50 breakout…

After breaking above 4200, the STOX50 Index could be poised for further upside with 4380 acting as the next key level of interest. Prices remain bullish on the daily charts with the candlesticks trading firmly above the 50, 100, and 200-day SMA. It may be wise to keep a close eye on the RSI which is pointing to overbought levels. Should this lead to a decliner back below 4200, prices may slip back toward the 4105 support.

Gold

It’s been a shaky week for the precious metal with prices struggling to push back above $1880. Sustained weakness below this level may trigger a selloff towards the 50-day SMA and the next key level at $1825.  A solid breakout above $1880 could see gold test $1900.