The trade: Australia 200 stalls as oil, gold and US Tech 100 pull back

(AI video summary)

This video was created on 18 June for IG audiences by ausbiz.

Australia 200 may be topping out

The Australia (ASX) 200 has traded within a tight 54-point range so far this week, appearing frozen by growing geopolitical tensions in the Middle East and a lack of conviction from global markets.

Despite a stronger open in United States (US) equity futures on Monday, the Australia 200 showed little appetite to rally. It also failed to respond to subsequent weakness in US markets, reinforcing a tone of indecision.

The index recently reached a fresh record high, though with limited strength. A loss-of-momentum daily candle formed at the peak, followed by two sessions of downside movement, indicating the early signs of a possible top.

A decisive break below 8500 would confirm that scenario. If support at that level gives way, the 200-day moving average (MA), currently near 8200, may become the next downside target.

US Tech 100 faces near -term pullback

The US Tech (Nasdaq) 100 also shows signs of fatigue. From an Elliott Wave perspective, three waves appear complete from the April lows, with a fourth-wave correction now likely. The 200-day MA, positioned around 20,500, provides a logical area for support.

If the correction holds at that level, a final fifth leg higher could follow, assuming no major disruptions.

Will the Federal Reserve adopt a more dovish tone?

The broader backdrop, including the Middle East conflict, is adding complexity for central banks, particularly the US Federal Reserve (Fed), which concludes its policy meeting tomorrow.

In October 2023, similar geopolitical instability prompted the Fed to soften its stance, which led to a strong equity rally into the year’s end. A similar shift is possible this time.

While markets expect interest rates to remain unchanged with two cuts projected by year-end, more dovish language could emerge at the press conference. This would give Fed Chair Jerome Powell the opportunity to soften policy guidance. The likelihood of a pivot may be closer to 50%, although current pricing implies only 10–15%.

Commodities

Crude oil remains volatile but supported

Crude oil has experienced sharp swings, though it continues to hold above the 200-day MA at $68.50. As long as that level holds, the price could retest resistance at $77.62, with a possible extension toward $80.77.

With volatility elevated, key technical levels such as the 200-day MA serve as important reference points for managing risk.

Gold holds trend amid Middle East uncertainty

Spot gold remains in an upward trend and continues to benefit from geopolitical uncertainty. As long as prices hold above $3300, a retest of the recent $3500 high remains likely.

Ongoing speculation around potential regime change in Iran adds further safe-haven appeal to the precious metal.

Currencies

Australian dollar stays rangebound

The Australian dollar/ US dollar (AUD/USD) remains trapped between 0.6550 and 0.6350 after rebounding from April lows. The 200-day MA near 0.6430 serves as a key short-term pivot.

A dovish shift from the Fed, whether at this meeting or in the near future, could provide the catalyst for a breakout toward 0.6740.

Bitcoin enters corrective phase

Bitcoin has broken below trendline support and appears to be entering a Wave C correction under Elliott Wave analysis. Key support is located between $95,000 and $100,000.

While the broader uptrend may still be intact above that zone, Bitcoin currently looks to be consolidating after a strong run. Its behaviour remains closely aligned with the broader risk asset complex.