The trade: oil rebounds, US Tech 100 surges as trade tensions ease

(AI video summary)

This video was created on 14 May for IG audiences by ausbiz.

Crude oil rebounds as US-China trade tensions ease

Crude oil has posted four consecutive days of gains, establishing a trading range between $55 and $65. The market formed a double bottom around $55.10 - $55.30, encouraging short covering.

This recovery has been supported by tariff rollbacks prompting upgraded gross domestic product (GDP) forecasts for both the United States (US) and China. Additionally, the US dollar's decline has provided further support for crude prices.

If prices can move above $65 - $65.50, then the 200-day moving average (MA) at $70 would be the next upside target.

Gold retreats as economic outlook improves

In the commodities market, spot gold has taken a sharp step lower despite some bullish forecasts. The precious metal currently holds support at $3200.

It likely needs another leg lower towards $3150 before considering long positions, with potential retests of $3500 - $3750 by year-end.

ASX 200 expected to trade in range

The Australia (ASX) 200 currently sits about 3.5% below its February 2025 record high, with limited market appetite at current levels.

With US tariff rates around 15% compared to 3% at the beginning of 2025, the index will likely settle into a range between 7800 - 8400 through May and possibly into June.

Australian dollar shows positive momentum

The Australian dollar (AUD) has formed a V-shaped bottom at 0.5912 and recently regained momentum after consolidating.

If it can get above the 200-day MA and take out last week's high at 0.6514, it could push toward 0.6777, the 200-week MA.

US Tech 100 resurgence driven by AI trade

The US Tech 100 has shown impressive strength, with a 1.6% overnight gain. From an Elliott wave perspective, we've seen a three-wave pullback to 16,542, signaling a correction.

Given the impulsive characteristics and resurgence of artificial intelligence (AI) investments, the index could retest record highs as market focus returns to AI-related investments.

Bitcoin consolidating before potential new highs

Bitcoin has broken above its 200-day MA before entering a consolidation phase after four consecutive weeks of gains.

This consolidation could take it back toward 98,000, but the cryptocurrency will likely challenge its record high around 125,000 when this period ends. The outlook remains bullish.