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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.
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We may take multiple trades throughout the week. Currently Trade View is Net Long.
AUSTRALASIAN SESSION
ASX – 5098
The ASX is on a tear at the moment and it looks like we have had or we are in the relief rally.
Patterns aren’t evident in the ASX chart; it’s just looking like a continuance of an up move.
Even though the ASX is currently in a slowdown process, we would not be surprised if it goes sideways for some time from here.
There may be a small up move to around 5250, but a break below 4982 should see a dramatic move down to 4339 which may be seen around May.
NIKKEI – 12437
The NIKKEI is clearly in an event-driven market, after 10 years of easing and struggling to make market gains, we see the Japanese Government injecting money into the market and the Yen, and then all of a sudden we see a rally in the NIKKEI. What is the impact of this?
Wait for the next announcement before making any moves.
EUROPEAN SESSION
FTSE – 6474
The FTSE is starting to stretch its legs but FICM (Trade View’s primary trading strategy) indicates a slowdown in the current move which is the 3rd extension.
The next possible extension is at 6578-81 where we will be looking to go short as part of our overall strategy. If a down move plays out we will be looking for 3 levels 6307, 6079 and then 5922.
DAX – 8037
We’re cautious re-shorting the DAX as it’s indicating an extension on the upside to a possible level of 8293 if 8050 is broken.
The reason for this is the DAX tends to overextend itself compared to the other Indices. It’s possible the DAX might be entering a new up move. We need to watch this one with the notion of squaring and reversing positions quickly if required.
Levels to watch on the break down below 7924 would be 7584 followed by 7434.
US SESSION
SNP – 1559
News coming out this week could possibly unravel the strong moves in the US markets. Even though FICM indicates a slowdown in this extension no short triggers have yet come into our sights.
The SNP is confident and we see a possible extension towards 1582 as our first target. If the numbers this week are better than expected then the level 1600 is likely.
A solid break below 1540 could see a move down to 1500, if this happens in May then possible lower levels of 1465 or even 1433.
DOW – 14511
The Dow should structure its moves in a similar way to its SNP counterpart. The only difference here is the Dow has played out its 3rd extension which could mean a sideways move until the SNP catches up or maybe just another burst up of 250 points?
A move down could start at any point on the DOW as no real point of reference is nearby, the one we see is 13858. If this level is broken then 13294 should be a possibility.
NASDAQ – 2797
The NASDAQ is trying hard to lead this rally but it’s being held back by the uncertainty that has come about with the Italian elections and the general feel of the world recovery.
Currently sitting on a potential support level of 2783, any bad news this week might see this level broken and possibly reaching 2695. Our next target of 2538 is too far away for now, but maybe if the “Sell in May and go away” mantra plays out then a great buying opportunity could arise.
Otherwise a break on the upside should see the September 2012 highs tested.
FX MARKETS
AUD.USD – 10408
The AUD has been working hard over the past few months trying to get some rhythm on the upside. But it seems everytime news that favours the AUD strength comes out, we see solid move followed by a retraction. Why? (Join our client member’s portal to find out more.)
We are currently at a resistance level of 10406 but the AUD is trying to replicate its September 2012 move, so watch out for the 10445 level, and if that gets broken then look out for 10554.
If this move doesn’t come to fruition, then our downside target of 10182 is a strong possibility.
EUR.USD – 13074
A lot of things are going on with the EUR, both fundamentally and technically. FICM indicated a slowdown at the start of March for the previous down move with support at 12963.
Although we have our trigger to go long we are cautious as we have resistance now at 13082. A break above this should see 13285, and a break below should see 12605. We will be watching this market closely this week.
GBP.USD – 15131
Here we have a dilemma; do we want the GBP to go up or do we want the FTSE to go up?
The slowdown of the down move was indicated last week and the potential reversal has started only to reach 15176 which is near our first resistance point of 15184 and then closed at 15131.
We would like to see a solid move through this level before engaging on the long side. If this plays out then 16066 could be a much closer target.
USD.JPY – 9526
100 – Is it or isn’t it? There’s no doubt that the USD is strengthening, but so too are the equity markets. Which market will make its move first? We have seen a slowdown in the up move but when we look at the previous tear and that 100 is being strongly talked about, then maybe this breather is just the start of USD.JPY reaching 110.00?
A down move should see support at 9241, and if this is level broken then 8841 is a real target.
COMMODITIES
GOLD – 1592
With strength in the USD, GOLD has made its move down. It is now looking like it wants to find some support at these levels. The real challenge for GOLD now is that it needs to break 1600 and then it should head towards 1630 before we see a significant move back up to 1740.
A break below 1550 will possibly see levels of 1525 and then 1462.
US LIGHT CRUDE OIL – 93.15
LIGHT CRUDE tends to move on its own axis. At the moment we see a range between 97.42 and 85.67. The current move is up, but we should see potential resistance near 96.00 and 96.25.
Unless a major news announcement comes about, we see LIGHT CRUDE range bound with any break below 89.41 seeing our lower target met.
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