The trade: US Tech 100, Australia 200, and currency trends
IG's Tony Sycamore explores the current market volatility affecting the US Tech 100 and Australia 200, highlighting how these factors influence trading strategies and future market prospects.
US Tech 100 and Australia 200 navigate market volatility
The US Tech 100 has been experiencing a challenging period amid economic slowdowns and trade tensions. In mid-February, it reached a new record high but quickly retreated to previous trading ranges due to waning momentum. The index now hovers around crucial support levels, including the 200-day moving average (MA) and the December 2022 uptrend support. Traders should monitor these levels closely, as a sustained break could lead to a decline towards 18,800. However, if support holds, a potential rebound might occur.
Similarly, the Australia 200 has faced its own set of challenges. After reaching a record high of 8615 in mid-February, the index lost momentum and fell through key support levels. The 200-day MA now serves as a critical support point. While a 10% pullback is possible, the index's current position suggests a potential for stabilisation if support holds. Traders should remain vigilant, as a break below the 200-day average could signal further declines.
Australian dollar's resilience
The Australian dollar (AUD) has shown remarkable resilience in the face of recent trade tensions and tariff announcements. Initially under pressure, the AUD rebounded strongly, buoyed by positive gross domestic product (GDP) expectations.
From a technical perspective, the AUD may still have room to rise, potentially reaching $0.65 before resuming its downtrend. Traders should remain cautious, as the currency's future movements will depend on economic data and global trade developments.
Potential for a rebound
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Bitcoin
Bitcoin has experienced significant volatility, with recent announcements about a strategic cryptocurrency reserve causing fluctuations. Despite these gyrations, Bitcoin has settled near its pre-announcement levels. The cryptocurrency remains below key resistance levels, suggesting that a sideways corrective phase may continue. Traders should watch for a break above 100,000 as an indication of a resumed uptrend.
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Crude oil
Crude oil has faced intense selling pressure, dropping 17% since mid-January. However, recent support levels have sparked a rebound, suggesting that much of the bad news is already priced in. With potential upside from European infrastructure developments and improved Chinese economic data, crude oil could see a bounce towards $72 if current support holds. Traders should remain cautious but optimistic about potential recovery.
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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