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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6101 ( +237 or +4.04% )
The ASX rallied strongly last week however is again at the all important 6100 area.
VOLATILITY ALERTS:
Thu 08:45 – RBA Governor Lowe Speaks
Thu 11:30 – Unemployment Rate
For a continued move higher we must now see the ASX hold 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 5980 before a pause. A strong break and close below this level however could see the ASX retest 5921, and if downside momentum is very strong we could see a move down to 5746.
EUROPE
DAX – 13058 ( +349 or +2.75% )
The DAX also rallied last week however like the ASX remains within a tight range bound area. We will be discussing this in our LIVE CHAT ROOM again this week.
For a continued move to the upside we must now see the DAX hold above 12921. Should this occur, we will look for a strong move into 13333, and if momentum remains strong a push back higher into 13520.
If the DAX fails to hold above 12921, we may see a move 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 fast and sharp move down to 12266.
US
SP500 – 3484 ( +128 or +3.81% )
The S&P once again has its sights on all time highs and this week will be another important week for the bulls. We will be discussing this in the MEMBER PORTAL this week.
NOTE: Monday is a public holiday in the US (Columbus Day)
VOLATILITY ALERTS:
Tue 23:30 – CPI (monthly)
Wed 23:30 – PPI (monthly)
Thu 23:30 – Philly FED Manufacturing Index
Fri 23:30 – Retail Sales (monthly)
Sat 01:00 – Prelim UoM Consumer Sentiment
For a move higher we would like to see the S&P close 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 3620; and if momentum is very strong we cannot rule out a move to 3650.
If we cannot close above 3498, we could see this market move lower into 3395. A break of this level however may result in a quick move down to 3300; and if momentum to the downside remains strong we may see a fast move down to 3274 and 3210.
FOREX
AUD/USD – 0.7239 ( +76 or +1.06% )
The Aussie Dollar once again staged a late week recovery as it closed strongly into last week’s end.
VOLATILITY ALERTS:
Thu 08:45 – RBA Governor Lowe Speaks
Thu 11:30 – Unemployment Rate
For a move higher, we would first like to see the AUD hold above 0.7197. Should this occur we will look for a move into 0.7282, and if upside momentum remains very strong we cannot rule out a move to 0.7364 before a pause.
If the AUD cannot hold above 0.7197, we will look for the AUD to 0.7113. A break and close below this level however could see a sharp decline into 0.7014; and if momentum to the downside remains strong we cannot rule out a move into 0.6934.
EUR/USD – 1.1830 ( +114 or +0.97% )
The EURO has reclaimed the all important 1.1800 level and like the DAX- is now back into the middle of its previously large range. We will be discussing this in the MEMBER PORTAL this week.
For a move higher we would like to see the EURO close 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 close 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 – 1.3045 ( +111 or +0.86% )
The British Pound has now based as buyers continue to lift this market higher.
VOLATILITY ALERTS:
Tue 03:00 – BoE Gov Bailey Speaks
Tue 17:00 – Claimant Count Change
For a continued move to the upside, we would like to see Cable hold above 1.3035, followed by a retest into 1.3161 before a pause. If however momentum is very strong we may see a strong push into 1.3277.
Should we fail to hold above 1.3035, we could see a move back down to 1.2867. A break below this level however could see Cable further depreciate to 1.2720 by the week’s end.
USD/JPY – 105.61 ( +24 or +0.23% )
The $/Yen was only marginally higher as this market continues to struggle amidst the uncertainty in markets.
For a move to the upside we must now see this market hold above 105.50. Should this occur we will look for a push into 106.52, and if momentum is very strong we cannot rule out a move higher to 106.92.
If we cannot hold above 105.50, we could see another move back down into 104.97. A break below this level may result in further downside to 104.02; and any further breaks to the downside may trigger a bigger move into 103.21.
COMMODITIES
GOLD – 1930 ( +31 or +1.63% )
GOLD has also managed to bounce off 1850 and we are watching this market closely now.
For a continued move higher we must now see this market close 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 close 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.
