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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5910 ( -10 or -0.17% )
The ASX is yet again at the key 5920 area and we will again discuss the importance of this level this week.
NOTE: Monday is a public holiday in Australia (Australia Day)
VOLATILITY ALERTS:
Wed 11:30 – CPI (quarterly)
For a continued move higher we must now see the ASX hold above 5823 followed by a close above 5930. A strong close above 5930 could see a move back up into 5985 , and if momentum to the upside is very strong we cannot rule out a strong reversal into 6070.
If the ASX cannot hold above 5823, we will look for a move back down to 5777 and 5746 before a pause. A strong break and close below this level however could see the ASX sell off into 5671, and if downside momentum is very strong we could see a sharp move down to 5582.
EUROPE
DAX – 11256 ( +21 or +0.19% )
The DAX is once again leading markets in Europe. Can this momentum continue this week?
VOLATILITY ALERTS:
Tue 01:00 – ECB President Draghi Speaks
Wed 19:00 – German Prelim CPI (monthly)
Fri 03:00 – German Buba President Weidmann Speaks
For a continued move to the upside we must see the DAX close strongly above 11362. Should this occur we will look for a move into the 11566 before a pause. A break of this level however could result in a very strong move into 11755 – 11790 area; with a possibility of a quick move higher into 11875.
If the DAX fails to close above 11362, we will look for a quick move down to 11050. A break and close below this level could result in a very sharp move down into 10863.
US
SP500 – 2665 ( -11 or -0.41% )
This week is all about the S&P as we have an extremely busy week of economic data due. We will be discussing these events LIVE this week in the LIVE CHAT ROOM extensively.
VOLATILITY ALERTS:
Wed 02:00 – CB Consumer Confidence
Thu 06:00 – FOMC Interest Rate Announcement
Thu 06:30 – FOMC Press Conference
Fri 00:30 – Personal Spending (monthly)
Fri 01:45 – Chicago PMI
Sat 00:30 – Non-Farm Employment Numbers – LIVE TV
Sat 02:00 – ISM Manufacturing PMI
Sat 02:00 – UoM Consumer Sentiment (revised)
For a move higher, we would like to see the S&P hold 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 hold above 2660, we could see this market continue to sell-off into 2638. 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 move down to 2540.
FOREX
AUD/USD – 0.7179 ( +14 or +0.2% )
The Aussie Dollar managed to reverse all of its losses last week with a big reversal on Friday. This market is now poised to move higher. We will be discussing this in the MEMBER PORTAL this week.
NOTE: Monday is a public holiday in Australia (Australia Day)
VOLATILITY ALERTS:
Wed 11:30 – CPI (quarterly)
For a move higher we would like to see the AUD close 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 retest of 0.7169; however a failure at 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 – 1.1405 ( +42 or +0.37% )
The Euro continues to chop inside its sideways range and we are now on alert for a breakout. We will be discussing this market in detail in the LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Tue 01:00 – ECB President Draghi Speaks
Wed 19:00 – German Prelim CPI (monthly)
Thu 21:00 – Prelim Flash GDP (quarterly)
Fri 03:00 – German Buba President Weidmann Speaks
Fri 21:00 – CPI Flash Estimate (annual)
For a sustained move higher we would like to see the EURO 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 hold 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 – 1.3198 ( +326 or +2.53% )
The Pound continues to rally strongly following more bullish news that the DUP has backed Theresa May’s Plan B. Time will tell if this is the news Britain requires to swing the pendulum back to the Brexit camp.
VOLATILITY ALERTS:
Tue 01:30 – BoE Governor Carney Speaks
Wed 20:30 – Net Lending to Individuals
Fri 20:30 – Manufacturing PMI
For a continued move to the upside, we would like to see Cable hold above 1.3035 and 1.3161 this week. 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, if we cannot hold above 1.3161 we will look for a move back down to 1.3035. A break below this level however could see this market retest 1.2868; and if momentum to the downside is strong we cannot rule out a bigger move to the key 1.2720 level and 1.2622.
USD/JPY – 109.54 ( -22 or -0.2% )
The $/YEN remains contained at our critical 109.94 level having failed to penetrate through this resistance last week.
For a move to the upside we must now see this market close strongly through 109.94. Should this occur we could see a strong move into 111.09. A strong break and close above this level could then see the $/YEN rally into 111.73, and if momentum is extremely strong to the upside 112.68 cannot be ruled out.
If we cannot close above 109.94, we will look for another quick retest of 109.21. A break below this level however may result in a fast move down to 108.31, and if the downside remains very strong we cannot rule out a sell-off into 107.75.
COMMODITIES
GOLD – 1302 ( +21 or +1.64% )
GOLD has finally burst through 1294 and all eyes are on this market now!
For a continued move higher we must now see this market hold above 1294. Should this occur we will look for a retest of 1303. A strong close above this level could see further upside into 1313; and if momentum remains very strong, we could see a big push into 1322 and 1333.
If Gold cannot hold above 1294, we will look for a move back down into 1285. A strong break and close below this level however takes us down into the key 1276 – 1278 area which is very important and will be watched closely.
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