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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6260 ( 0 or 0.0% )
The ASX remained in a sideways consolidation period for most of the month and was unchanged over the past week.
VOLATILITY ALERTS:
Wed 11:30 – CPI (quarterly)
For a continued move higher we must now see the ASX close above 6276. Should this occur we will look for a move into 6345, and if momentum to the upside is very strong we cannot rule out a move to 6440.
If the ASX cannot close above 6276, we will look for a move back down to 6206 before a pause. A strong break and close below this level however could see the ASX retest 6140, and if downside momentum is very strong we could see a move down to 6070.
EUROPE
DAX – 12542 ( -5 or -0.04% )
The DAX enters a very important week this week as we look to see whether buyers can put a stop to Friday’s sell-off. We will be discussing this in more detail in the LIVE CHAT ROOM.
VOLATILITY ALERTS:
Tue 17:30 – Flash Manufacturing PMI
Tue 17:30 – Flash Services PMI
Wed 18:00 – German IFO Business Climate
Thu 21:45 – ECB Interest Rate Announcement – LIVE TV
Thu 22:30 – ECB Press Conference
For a continued move to the upside we must now see the DAX hold above 12384 followed by a close above 12566. A break of this level could then result into a quick move into 12640; followed by continuation into 12714. If momentum to the upside is very strong we cannot rule out a move to 12830.
If the DAX fails to close and hold above 12384, we expect to see a move back down into 12198 before a pause. A break below this level however means we may see more selling into 12115; and if momentum is very strong to the downside we may see a sharp move into 12044.
US
SP500 – 2802 ( 0 or 0.00% )
Like the ASX, the S&P was also unchanged last week and has now met some important technical resistance. This week is also very important for this market. We will be discussing this in more detail in the LIVE CHAT ROOM.
VOLATILITY ALERTS:
Tue 00:00 – Existing Home Sales
Thu 22:30 – Core Durable Goods Orders (monthly)
Fri 22:30 – Advance GDP (quarterly)
Sat 00:00 – Revised UoM Consumer Sentiment
For a move higher we would like to see the S&P close and close above 2802. Should this occur we could see another retest of 2808. A close above this level then sets the stage for a move into 2838.
If we cannot hold above 2802, we will look for a move back down to 2785. A break of this level however may result in quick move down to 2760; and if momentum to the downside remains strong we cannot rule out a move to 2736.
FOREX
AUD/USD – 0.7417 ( -5 or -0.07% )
The Aussie Dollar has put in an important double bottom and we will be watching closely to see if this market can rally higher. We will be discussing this market in more detail in the MEMBER PORTAL.
VOLATILITY ALERTS:
Wed 11:30 – CPI (quarterly)
For a move higher we would like to see the AUD close above 0.7447, followed by a break and close above 0.7489. A strong break and close above this level could see a quick move to 0.7561 before a pause; and if momentum remains strong we will look for a move into 0.7617.
If we cannot close above 0.7447, we will look for a move back down to 0.7364. A strong break below this level may result in a move back down into 0.7282 before another potential pause. Any subsequent breaks of this level however may result in a very fast move down to 0.7229.
EUR/USD – 1.1721 ( +35 or +0.3% )
The Euro also remains in a larger sideways range however is set for a retest of resistance levels this week. We will be covering this market extensively in the the MEMBER PORTAL.
VOLATILITY ALERTS:
Tue 18:00 – Euro area Flash Manufacturing PMI
Tue 18:00 – Euro area Flash Services PMI
Wed 18:00 – German IFO Business Climate
Thu 21:45 – ECB Interest Rate Announcement – LIVE TV
Thu 22:30 – ECB Press Conference
For a sustained move higher we would like to see the EURO close above 1.1738 this week. Should this occur we could see a strong move into 1.1822; whilst a strong break above this level may see a run into the big figure at 1.2000.
If the EURO cannot close above 1.1738, we could see a fast move down into 1.1613. A break below this could be followed by another quick move into 1.1496; and should momentum remain strong we cannot rule out a move to 1.1453.
GBP/USD – 1.3129 ( -108 or -0.82% )
The Pound continues to suffer with Brexit news still heavily impacting this market. Can this market reverse its recent declines or will we see more downside this week?
For a continued move to the upside, we would like to see Cable close above 1.3309. Should this occur we will look for the Pound to rally into 1.3534 before a pause; however a strong break of this level could see a retest of 1.3875.
If we cannot close above 1.3309, we will look for a quick move down into 1.3111. A break of this level may result in a retest of 1.3035; however any subsequent break could see this market sell-off quickly into 1.2868. Should the downside momentum continue, we cannot rule out a move to 1.2720.
USD/JPY – 111.45 ( -88 or -0.78% )
Last week we mentioned to members that the $/YEN was showing signs of short-term exhaustion. The question now is can the sellers follow-through after Friday’s strong decline?
For a move to the upside we must now see this market close above 111.73. Should this occur we will look for a test of 112.68 before another pause. However a strong break and close above this level could see the YEN rally strongly into 113.87.
If we cannot close above 111.73, we are likely to see a retest of 111.09. A strong break and close below this level could result in a move back down to 110.45, and if momentum to the downside is very strong we may see a very sharp move down into 109.94.
COMMODITIES
GOLD – 1231 ( -10 or -0.81% )
GOLD continues to be sold off with strong moves in the US Dollar and other risk on assets. This week we could see a pause to this sell-off.
For a move higher we would like to see this market hold above 1238. Should this occur we will look for a retest of 1247. A close above this level may likely see a further move to the upside into 1260 before a pause. Should momentum remain very strong, we could see a fast move into 1276.
If Gold cannot hold above 1238, we could see a very sharp drop into 1222 before a pause. However any subsequent breaks of this level may result in further downside into 1216, and if momentum to the downside remains very strong we cannot rule out a move into 1206.
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