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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5955 ( -234 or -3.78% )
The ASX was again sold off significantly last week as this market once again retreats back into its bigger sideways range.
VOLATILITY ALERTS:
Tue 14:30 – RBA Interest Rate Announcement
Fri 14:30 – RBA Monetary Policy Statement
For a continued move higher we must now see the ASX hold 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 hold 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 – 11584 ( -1077 or -8.51% )
Last week alluded to the coronavirus pandemic picking up pace and we have since seen the result of this- a big week down for the DAX.
For a move to the upside we must see the DAX close above 11755. Should this occur we will look for a retest of 11875. If the DAX can break strongly through this level, we will look for a move into 12115 and if momentum is very strong we cannot rule out a strong move to 12384.
If the DAX fails to close above 11755, we will look for a move back down to 11366 before a pause. Any break below this level however could see the DAX sell-off sharply into 11050, and if momentum is very strong to the downside we cannot rule out a move back down to 10735.
US
SP500 – 3286 ( -174 or -5.03% )
The S&P is approaching a key double bottom area and it goes without saying all eyes will be on this market this week. We will be discussing this in the MEMBER PORTAL this week.
VOLATILITY ALERTS:
Tue 02:00 – ISM Manufacturing PMI
Tue/Wed – US Presidential Election
Thu 02:00 – ISM Services PMI
Fri 06:00 – FOMC Interest Rate Announcement
Sat 00:30 – Non-Farm Payroll
For a move higher we would like to see the S&P hold above 3248. Should this occur, we will look for a move higher into 3308. A strong break above this level however sets the stage for a move higher into 3338; and if momentum is very strong we cannot rule out a move to 3375.
If we cannot hold above 3248, we could see this market move lower into 3208. A break of this level however may result in a quick move down to 3166; and if momentum to the downside remains strong we may see a fast move down to 3106 and 3050.
FOREX
AUD/USD – 0.7026 ( -110 or -1.54% )
The Aussie Dollar is again holding onto a thin line at 70c. Can the buyers defend this level this week?
VOLATILITY ALERTS:
Tue 14:30 – RBA Interest Rate Announcement
Fri 14:30 – RBA Monetary Policy Statement
For a move higher, we would first like to see the AUD hold above 0.7014. Should this occur we will look for a move into 0.7113, and if upside momentum remains very strong we cannot rule out a move to 0.7197 – 0.7236 before a pause.
If the AUD cannot hold above 0.7014, we will look for the AUD to 0.6934. A break and close below this level however could see a sharp decline into 0.6830; and if momentum to the downside remains strong we cannot rule out a move into 0.6750.
EUR/USD – 1.1645 ( -216 or -1.82% )
Like other European markets the Euro was also under significant pressure last week.
For a move higher we would like to see the EURO hold above 1.1613. Should this occur we could see a continued move higher into 1.1678. A break of this level could see this market rally further to 1.1738 and if momentum is very strong, 1.1840 cannot be ruled out.
If the EURO cannot hold above 1.1613, we could see a fast move down into 1.1496 before a pause. A strong break of this level may result in a move into 1.1453, however any weakness below this level could see a sharp drop into 1.1347.
GBP/USD – 1.2948 ( -95 or -0.73% )
Cable remains range bound going into an important week and we are on high alert for a breakout this week.
VOLATILITY ALERTS:
Thu 23:00 – BoE Interest Rate Announcement
For a continued move to the upside, we would like to see Cable close 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 close 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 – 104.67 ( -3 or -0.03% )
The $/Yen remained flat last week and as such our levels remain unchanged.
NOTE: Tuesday is a public holiday in Japan (Culture Day)
For a move to the upside we must now see this market close 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 close above 105.50, 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 102.80.
COMMODITIES
GOLD – 1878 ( -23 or -1.21% )
GOLD is again finding buyers at key levels and this week we will be keeping a close eye on two very important levels- 1871 and 1850.
For a continued move higher we must now see this market hold above 1871. Should this occur we would then need to see a strong break back above through 1900. Should this occur we could see further upside into 1920and 1950.
If Gold cannot hold above 1871, we will look for a move back down to 1850. A break below this level could see a move lower into 1830; and if momentum is very strong to the downside we could see a move to 1800 and 1786.
