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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes. For up to the minute market analysis see our live trading room.
INDICES
AUSTRALASIA
ASX – 6030 ( -70 or -1.15% )
The ASX continues its sideways consolidation; but can it finally break out this week?
VOLATILITY ALERTS:
Tue 14:30 – RBA Interest Rate Announcement
Wed 11:30 – GDP (quarterly)
For a continued move higher we must now see the ASX close above 6070 followed by a push into 6140. Should this occur we will look for a move into 6206, and if momentum to the upside remains strong we cannot rule out a move to 6276.
If the ASX cannot close above 6070, we will look for a move back down to 5921 before a pause. A strong break and close below this level however could see the ASX retest 5823, and if downside momentum is very strong we could see a move down to 5746.
EUROPE
DAX – 13063 ( +270 or +2.11% )
The DAX is creeping higher and last week we saw an important hold above 13,000.
For a continued move to the upside we must now see the DAX hold above 13050. Should this occur, we will look for a strong move back up into 13266, and if momentum remains strong a push back higher into 13520.
If the DAX fails to hold above 13050, we may see a retest back down into the key level of 12714. A close below this level is likely to see a retest of 12566; however if momentum is very strong to the downside we cannot rule out a move to 12266.
US
SP500 – 3509 ( +113 or +3.33% )
The S&P is once again in blue skies. We will be discussing this in the MEMBER PORTAL this week.
VOLATILITY ALERTS:
Wed 00:00 – ISM Manufacturing PMI
Fri 00:00 – ISM Non-Manufacturing PMI
Fri 22:30 – Non Farm Employment Numbers
For a move higher we would like to see the S&P hold above 3498. Should this occur, we will look for a move higher into 3560. A strong break above this level however sets the stage for a move higher into 3602; and if momentum is very strong we cannot rule out a move to 3666.
If we cannot hold above 3498, we could see this market move lower into 3374. A break of this level however may result in a quick move down to 3308; and if momentum to the downside remains strong we may see a fast move down to 3274.
FOREX
AUD/USD – 0.7366 ( +207 or +2.89% )
The Aussie Dollar was very strong last week having recorded one of its best week’s in many months.
VOLATILITY ALERTS:
Tue 14:30 – RBA Interest Rate Announcement
Wed 11:30 – GDP (quarterly)
For a move higher, we would first like to see the AUD hold above 0.7364. Should this occur we will look for a move into 0.7447, and if upside momentum remains very strong we cannot rule out a move to 0.7489 before a pause.
If the AUD cannot hold above 0.7364, we will look for the AUD to 0.7282. A break and close below this level however could see a sharp decline into 0.7229; and if momentum to the downside remains strong we cannot rule out a move into 0.7200.
EUR/USD – 1.1906 ( +111 or +0.94% )
The EURO continues to build a strong consolidation and again has its sights on the upper end of this range. We will be discussing this market again in the LIVE CHAT ROOM this week.
For a move higher we would like to see the EURO hold above 1.1834. Should this occur we could see a retest of 1.1925. A break of this level could see this market rally further to 1.2002; and if momentum is very strong, 1.2042 cannot be ruled out.
If the EURO cannot hold above 1.1834, we could see a fast move down into 1.1738 before a pause. A strong break of this level may result in a move into 1.1678, however any weakness below this level could see a sharp drop into 1.1613.
GBP/USD – 1.3350 ( +261 or +1.99% )
Cable has broken out to the upside as buyers continue to favour the Pound over the Euro.
NOTE: Monday is a public holiday in the UK (Summary Bank Holiday)
VOLATILITY ALERTS:
Fri 00:00 – BoE Gov Bailey Speaks
For a continued move to the upside, we would like to see Cable hold above 1.3277, followed by a move higher into 1.3350 before a pause. If however momentum is very strong we may see a strong push into 1.3534 by the weeks’ end.
Should we fail to hold above 1.3277, we could see a move back down to 1.3035. A break below this level however could see Cable further depreciate to 1.2867 by the week’s end; and if momentum is very strong to the downside 1.2720 cannot be ruled out.
USD/JPY – 105.35 ( -45 or -0.43% )
The $/Yen was slightly down last week as the US continues to exhibit bearish sentiment. We will be discussing this in the LIVE CHAT ROOM this week.
For a move to the upside we must now see this market close above 105.99. Should this occur we will look for a retest of 106.82, and if momentum is very strong we cannot rule out a move all the way back up to 108.31.
If we cannot close above 105.99, we could see another move back down into 105.50. A break below this level may result in further downside to 104.97; and any further breaks to the downside may trigger a bigger move into 103.21.
COMMODITIES
GOLD – 1963 ( +23 or +1.19% )
GOLD is also in a sideways consolidation and we are seeing continued signs of this same behaviour. We will be discussing this in the MEMBER PORTAL this week.
For a move higher we must see this market hold above 1938. Should this occur we will look for a move to 2012. A break above this level sets Gold up for retests of 2033 and 2050.
If Gold cannot hold above 1938, we will look for a move back down to 1920. A break below this level could see a move lower into 1900; and if momentum is very strong to the downside we cannot rule out a sharp move down to 1871.
