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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5616 ( -70 or -1.23% )
The ASX is looking more and more likely top break to new lows this year. We will be discussing the impact of this in the LIVE CHAT ROOM.
VOLATILITY ALERTS:
Wed 10:30 – Westpac Consumer Sentiment
For a continued move higher we would like to see the ASX close above 5648 followed by a retest of 5746. Should this occur we will look for a retest of 5777, and a strong close above this could result in a quick move to 5823. If momentum is strong we will then look for a rally into 5875 and 5921.
If the ASX cannot close and hold above 5648, we are likely to see another retest of 5606. A break of this level however could see a sharp move into 5582, 5521 and 5504. If momentum is strong to the downside we cannot rule out a move to 5450.
EUROPE
DAX – 10714 ( -603 or -5.33% )
The DAX was obliterated last week and this bear market has accelerated to the downside.
VOLATILITY ALERTS:
Tue 21:00 – German ZEW Economic Sentiment
Thu 23:45 – ECB Interest Rate Announcement – LIVE TV
Fri 00:30 – ECB Press Conference
Fri 19:30 – German Flash Manufacturing PMI
Fri 19:30 – German Flash Services PMI
For a move to the upside we must see the DAX close strongly above 10863. Should this occur we will look for a retest 11050 before a pause; however if momentum is very strong we cannot rule out a move higher into 11180.
If the DAX however fails to close above 10863, we will look for a quick move down to 10601. A break and close below this level could result in another sharp move down to 10382 and if we continue to slide we cannot rule out a move down into very sharp move down into 10131.
US
SP500 – 2635 ( -128 or -4.63% )
Like the DAX the S&P also experienced a very sharp sell-off last week and we now find ourselves at a critical area. We will be discussing this market in more detail in the LIVE CHAT ROOM.
VOLATILITY ALERTS:
Wed 00:30 – PPI (monthly)
Thu 00:30 – CPI (monthly)
Sat 00:30 – Retail Sales (monthly)
For a move higher, we would like to see the S&P close above 2660. Should this occur we will look for a retest of the key 2680 level. A strong break and close above this level could see another retest of 2704, and if momentum remains strong to the upside we cannot rule out moves to 2720 and 2736.
If we cannot close above 2660, we could see this market continue to sell-off into 2600 which is a VERY KEY LEVEL! A strong break through this level however could quickly see a move down to 2590 before a pause. If momentum to the downside is strong we may see a move lower into 2562; and a close below this level may result in a very fast move down to 2540.
FOREX
AUD/USD – 0.7199 ( -114 or -1.56% )
The Aussie dollar sold off every day last week amidst continued uncertainty across global markets. This week we find this market at a key support area.
VOLATILITY ALERTS:
Wed 10:30 – Westpac Consumer Sentiment
For a move higher we would like to see the AUD break above 0.7229, followed by a break and close above 0.7282. A strong break and close above this level could see a quick move to 0.7364 before a pause; and if momentum remains strong we will look for a move back up into 0.7447.
If we cannot hold above 0.7229, we will look for a move back down to 0.7169. A strong break below this level may result in a move back down into 0.7112 before another potential pause. Any subsequent breaks of this level however may result in a very fast move down to 0.7070.
EUR/USD – 1.1401 ( +82 or +0.72% )
With more turmoil in France the Euro is now under pressure to stabilise above 1.1300. Can the Euro hold above this key handle this week going into the Interest Rate Announcement?
VOLATILITY ALERTS:
Thu 23:45 – ECB Interest Rate Announcement – LIVE TV
Fri 00:30 – ECB Press Conference
Fri 20:00 – Euro area Flash Manufacturing PMI
Fri 20:00 – Euro area Flash Services PMI
For a sustained move higher we would like to see the EURO close and hold above 1.1335 early in the week. Should this occur we could see a strong move into 1.1453 and any breaks above this level may mean a quick move into 1.1496 before a pause. A strong close above this level however could see the EURO rally strong into 1.1613 by the week’s end.
If the EURO cannot close above 1.1335, we could see a fast move down into 1.1249 before a pause. A strong break of this level may result in a move into 1.1201, however any weakness below this level could see a sharp drop into 1.1117 before the week’s end.
GBP/USD – 1.2733 ( -20 or -0.16% )
The stage is set for a very big week in Cable, with the upcoming House of Commons vote scheduled for Tuesday. This will be a very important decision regarding Brexit prospects and we will be discussing this LIVE in detail in the MEMBER PORTAL this week.
VOLATILITY ALERTS:
Mon 20:30 – GDP (monthly)
Mon 20:30 – Manufacturing Production (monthly)
Tue 20:30 – Unemployment Rate
Tue TBC – Brexit Parliamentary vote
For a continued move to the upside, we would like to see Cable close above 1.2868, followed by a retest of 1.3035 and 1.3161 before a pause. Should this occur we will look for a move to 1.3191 and 1.3277; and if momentum is very strong we could see a re-test of last week’s highs into 1.3386.
On the downside, should we fail to close above 1.2868, we will be watching the key 1.2720 level very closely. A strong break below this level however sets this market up for a bigger move down into 1.2622; and if downside momentum remains strong we could see a quick drop into 1.2480.
USD/JPY – 112.68 ( -84 or -0.74% )
The $/YEN has put in a short-term double bottom and the question now is will the $US find buyers?
For a move to the upside we must now see this market hold above 112.68. Should this occur we will look for a retest of 113.87 before another pause; with the potential for a quick move into 114.08.
If we cannot hold above 112.68, we are likely to see a move down into 111.73. A strong break and close below this level could result in a move back down to 111.09, and if momentum to the downside is very strong we may see a very sharp move down into 110.45.
COMMODITIES
GOLD – 1248 ( +26 or +2.13% )
Last week we said watch out for a move very soon; and Gold has begun its swing higher. We are now at a very important area (1245-1247); and if Gold can clear this level we could see a sustained move higher into next year.
For a continued move higher we would like to see this market close above 1260. Should this occur we could see a retest of 1276-1278 before a pause. A strong break above 1278 may likely result in a move to 1285; and if momentum is strong we cannot rule out a move to 1294..
If Gold cannot close above 1260, we will look for a move back down to 1245. A break below this level however could result in a very sharp move down to 1238, and if momentum is very strong to the downside we cannot rule out a move to 1222.
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