This market brief is an overview of the week ahead and some of the events we see as being important to the markets.
Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.
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INDICES
AUSTRALASIA
ASX – 6090 ( -66 or -1.08% )
The ASX was again weaker last week however has it now found support…? We will be discussing this in more detail in the MEMBER PORTAL.
NOTE: Friday is a public holiday in Australia (Australia Day)
For a continued move higher we must now see the ASX break and close above 6070. Should this occur we will look for this market to re-test 6140, and a break above this level could see a quick move to 6175. A strong break above this level however could see a move into 6250 and 6315 by the week’s end.
If the ASX cannot close above 6070, we will look for a move back down into 6000. A break below this level is likely to see a retest of 5986 and further downside may result in a sharp move lower into 5921.
EUROPE
DAX – 13465 ( +225 or +1.7% )
The DAX posted a strong rally on Friday to close the week strong and is now again approaching all-time highs.
VOLATILITY ALERTS:
Tue 21:00 – German ZEW Economic Sentiment
Wed 19:30 – German Flash Manufacturing PMI
Thu 20:00 – German IFO Business Climate
Thu 23:45 – ECB Interest Rate Announcement – LIVE TV
Fri 00:30 – ECB Press Conference – LIVE TV
For a continued move to the upside we would now like to see the DAX hold above 13388, on its way to closing above 13520. Should this occur we will look for a strong a move to 13697, and if momentum is very strong we could see a sharp move higher into 13819.
If the DAX fails to hold above 13388, we could see a move back down into 13205. A break below this level could mean a strong move down into the key 13050 level.
US
SP500 – 2810 ( +22 or +0.79% )
The S&P has yet again set another all time high as this market continues to rally with no bears in sight! We will be discussing this market in more detail in the LIVE CHAT ROOM.
VOLATILITY ALERTS:
Fri 02:00 – New Home Sales
Sat 00:30 – Advance GDP (quarterly)
Sat 00:30 – Core Durable Goods (monthly)
For a move higher we would like to see the S&P now hold above 2808, followed by a quick move to 2824. Should this market break this level, WATCH OUT- we could see a very sharp move higher into 2848.
If we cannot hold above 2808, we will look for a move back down to 2760 before a pause. A strong break and close below this level could see this market move back down to 2736 and if momentum to the downside is very strong we cannot rule out a move to 2694 by the week’s end.
FOREX
AUD/USD – 0.7982 ( +67 or +0.85% )
The Aussie Dollar came into one of our key resistance levels at 0.8034 before reversing on Friday. Can this market continue to rally or is a short-term high in place? We will be discussing this in more detail in the MEMBER PORTAL.
NOTE: Friday is a public holiday in Australia (Australia Day)
For a move higher we must now see this market close above 0.8034. Should this occur we will look for a retest of 0.8118. A strong break above 0.8118 could see this market rally into 0.8162, and if momentum is very strong we cannot rule out a move into 0.8301.
If we cannot close above 0.8034, we are likely to see another test of 0.8000 before a retest of 0.7903, and if momentum remains strong we will look for a move into 0.7833. Should we break lower however, a move down into 0.7779 cannot be ruled out.
EUR/USD – 1.2219 ( +24 or +0.2% )
The EURO spent the majority of last week consolidating, remaining in a sideways range and as such our levels this week remain unchanged.
VOLATILITY ALERTS:
Wed 20:00 – Flash Manufacturing PMI
Wed 20:00 – Flash Services PMI
Thu 23:45 – ECB Interest Rate Announcement – LIVE TV
Fri 00:30 – ECB Press Conference – LIVE TV
For a sustained move higher we would like to see the EURO hold above 1.2165 followed by a strong push into 1.2266. Should this occur, we will then look for this market to test 1.2358.
If the EURO cannot hold above 1.2165, we could see a move back down 1.2040 before a pause. This is an important level and any subsequent strong break and close below this level may see the EURO sell-off further into 1.1929 this week.
GBP/USD – 1.3847 ( +117 or +0.85% )
The Pound continues its 5-week long rally however like the EURO we have a very important week set for the Pound.
VOLATILITY ALERTS:
Tue 20:30 – Public Sector Net Borrowing
Wed 20:30 – Unemployment Rate
Fri 20:30 – Prelim GDP (quarterly)
For a move to the upside we would like to see a strong break and close above 1.4075 A break above this level may result in moves into 1.4194, 1.4223 and 1.4259 before a pause. If we see a complete V-Reversal the GBP could rally all the way back into 1.4469.
On the downside, a strong break and close below 1.3853 could see a quick move down into 1.3743 – 1.3725 before a pause. If momentum to the downside continues we may see moves into 1.3683 and 1.3654. A strong break below these levels could see cable trade down to 1.3510.
USD/JPY – 110.82 ( -21 or -0.19% )
Like the EURO the $/YEN also spent the majority of last week in a sideways range and markets will look to the BoJ this week for more clues as to what the Central Bank’s stance on their monetary policy will be in 2018.
For a move to the upside we must now see this market break and close above 111.09. Should this occur we will look for a move into 111.72, and a strong break and close above this level may see the $/YEN rally strongly into 112.68.
If we cannot close above 111.09, we could see a move back down into 109.04. A strong break below this level could see a further move down into 109.21, and momentum is very strong to the downside we may see a sharp move down into 108.31.
COMMODITIES
GOLD – 1331 ( -6 or -0.45% )
GOLD has finally taken a breather having closed the week slightly down. The question now is- do we go higher or lower from here?
For a continued move higher we would like to see this market hold and close strongly above 1333. Should this occur we will look for a strong move into 1355 before another pause. If momentum is very strong, 1375 cannot be ruled out.
If Gold cannot hold above 1333, we will look for a move back down into 1322. A strong break below this level could see GOLD sell off further into 1313, and if momentum is strong to the downside we could see 1303 before the week’s end.
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