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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5864 ( -100 or -1.68% )
The ASX closed lower last week as our local market continues to take cues from developments overseas.
VOLATILITY ALERTS:
Tue 14:30 – RBA Interest Rate Announcement
Tue TBC – Annual Budget Release
Fri 11:30 – RBA Financial Stability Review
For a continued move higher we must now see the ASX close above 5921 followed by a push into 6070. Should this occur we will look for a move into 6140, and if momentum to the upside remains strong we cannot rule out a move to 6206 and 6276.
If the ASX cannot close above 5921, we will look for a move back down to 5823 before a pause. A strong break and close below this level however could see the ASX retest 5746, and if downside momentum is very strong we could see a move down to 5614.
EUROPE
DAX – 12709 ( +134 or +1.07% )
The DAX closed slightly higher however not without a fight from the bears for most of the week. We will be discussing this in our LIVE CHAT ROOM again this week.
VOLATILITY ALERTS:
Mon All Day – Eurogroup Meetings
Tue 19:35 – ECB President Lagarde Speaks
Wed 00:00 – ECB President Lagarde Speaks
For a continued move to the upside we must now see the DAX close above 12714. Should this occur, we will look for a strong move into 12921, and if momentum remains strong a push back higher into 13050 and 13333.
If the DAX fails to close above 12714, we may see a retest back down into the key level of 12566. A close below this level is likely to see a retest of 12266; however if momentum is very strong to the downside we cannot rule out a move to 11871.
US
SP500 – 3356 ( +61 or +1.85% )
The S&P continues to hold strong despite the last week’s news from the White House. We will be discussing this in the MEMBER PORTAL this week.
VOLATILITY ALERTS:
Tue 01:00 – ISM Non-Manufacturing PMI
Wed 01:40 – FED Chairman Powell Speaks
Thu 05:00 – FOMC Meeting Minutes
For a move higher we would like to see the S&P close above 3395. Should this occur, we will look for a move higher into 3498. A strong break above this level however sets the stage for a move higher into 3560; and if momentum is very strong we cannot rule out a move to 3602.
If we cannot close above 3395, we could see this market move lower into 3300. A break of this level however may result in a quick move down to 3274; and if momentum to the downside remains strong we may see a fast move down to 3210 and 3140.
FOREX
AUD/USD – 0.7163 ( +139 or +1.98% )
The Aussie Dollar staged a recovery off an important level and we will be discussing the significance of this in the LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Tue 14:30 – RBA Interest Rate Announcement
Tue TBC – Annual Budget Release
Fri 11:30 – RBA Financial Stability Review
For a move higher, we would first like to see the AUD hold above 0.7113. Should this occur we will look for a move into 0.7197, and if upside momentum remains very strong we cannot rule out a move to 0.7236 before a pause.
If the AUD cannot hold above 0.7113, we will look for the AUD to 0.7014. A break and close below this level however could see a sharp decline into 0.6934; and if momentum to the downside remains strong we cannot rule out a move into 0.6830.
EUR/USD – 1.1716 ( +86 or +0.74% )
This week we will be watching the EURO closely for any signs of a shift in downside pressure. Can the sellers take hold of this market?
VOLATILITY ALERTS:
Mon All Day – Eurogroup Meetings
Tue 19:35 – ECB President Lagarde Speaks
Wed 00:00 – ECB President Lagarde Speaks
For a move higher we would like to see the EURO hold above 1.1678. Should this occur we could see a continued move higher into 1.1738. A break of this level could see this market rally further to 1.1840 and if momentum is very strong, 1.1920 cannot be ruled out.
If the EURO cannot hold above 1.1678, we could see a fast move down into 1.1613 before a pause. A strong break of this level may result in a move into 1.1496, however any weakness below this level could see a sharp drop into 1.1453.
GBP/USD – 1.2934 ( +191 or +1.5% )
Cable continues to show signs of basing but the outlook for this market still remains uncertain.
VOLATILITY ALERTS:
Thu 18:25 – BoE Gov Bailey Speaks
For a continued move to the upside, we would like to see Cable hold above 1.2868, followed by a move higher into 1.3035 before a pause. If however momentum is very strong we may see a strong push into 1.3161 and 1.3277 by the weeks’ end.
Should we fail to hold above 1.2868, we could see a move back down to the all important 1.2720. A break below this level however could see Cable further depreciate to 1.2622 by the week’s end; and if momentum is very strong to the downside 1.2480 cannot be ruled out.
USD/JPY – 105.37 ( -19 or -0.18% )
The $/Yen remained flat and we are also watching this market closely now. We will be discussing this in the MEMBER PORTAL this week.
For a move to the upside we must now see this market hold above 104.97. Should this occur we will look for a retest of 105.50, and if momentum is very strong we cannot rule out a move all the way back up to 106.82.
If we cannot hold above 104.97, we could see another move back down into 104.02. A break below this level may result in further downside to 103.21; and any further breaks to the downside may trigger a bigger move into 103.21.
COMMODITIES
GOLD – 1899 ( +39 or +2.1% )
Last week GOLD held onto the all important 1850 level and the question this week is can it break 1900?
