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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 Light Net Short.
AUSTRALASIA
ASX – 5445
The ASX moved higher again last week but with a slow grind. It has now closed above 5424 and just below the previous highs in Oct 2013, which are both important levels that we have been monitoring closely. Even though we have a potential slowdown occurring in the range, an over extension is possible.
For the up move to continue we would like to see and early break past the previous highs of 5458 with a long solid up bar. This should then be followed by a push towards 5553. Once this occurs and if the momentum is still strong then we would like to see another long up bar break through 5553 and moving towards an ambitious level of 5777.
For the slowdown to take full effect and a down move is to restart then we would like to see 5424 broken early in the week followed by a strong down move with long bars breaking and closing through 5366. Once this occurs then the area between 5271 – 37 could be tested. If broken then 5200 could be reached and if the downward momentum is strong then the ASX could find potential support near 5144 – 25.
EUROPE
FTSE – 6805
The FTSE also pushed higher last week but it too looked like it was grinding higher ever so slightly. Once again we saw an initial burst higher early in the week with no real follow through. It did however reach 6847 which was one of our FICM levels mentioned last week, but then it come back down to close 40 points below it.
For the FTSE to continue its up move we would like to see a solid break and close above 6847 early in the week followed by a push towards 6903. Once this occurs then we would like to see 6903 broken with similar momentum followed by a push towards 7036 which would then complete the range.
For the down move to restart then we would like to see an early break and close past 6740 with a long solid down bar. Once this occurs then we would like to see another strong break past 6656 which could then lead it to reach 6563. If this level is also broken with solid downward momentum then the FTSE could be looking for support near 6433 – 6395 area as FICM our primary model is showing potential support levels.
DAX – 9621
The DAX is once again bucking the trend of the world markets by moving sideways, this is one of the reason why we at Trade View like to monitor and trade the DAX as it has the potential to indicate a reversal and a move quickly in the other direction before other markets do. The slowdown has occurred now we need to see what action it takes, new extension rally or sharp reversal? As the DAX has only closed 40 points lower our comments from last week with remain the same.
For the DAX to continue higher from these levels then we would like to see a solid start to the week where the DAX reaches 9756 with a follow through reaching 9785. This will then complete the range set back in Dec 2013. Once this is achieved then we will revise accordingly.
If the slowdown takes full effect and the DAX cannot complete the range and restarts its down move then we would like to see an early break past 9554 followed by strong momentum past 9431 and a solid break with a long down bar past 9376. The two levels we will be watching closely are 9222 and 9113 depending on the speed of the down move.
US
S&P – 1836
The S&P finished last week flat after a move down during the week. Also FICM has indicated a potential slowdown process occurring. As the S&P has only closed 2 points lower we will maintain our levels from last week.
For the S&P to continue higher then we will be watching 1848 – 50 area very closely. Once this level is broken we will be discussing potential upside levels in our members area.
If the S&P cannot break past the 1848 – 1850 area we would like to see a solid break past 1820 early this week followed by a continuation through 1805 and a close past 1794. If the momentum continues strong then we will be monitoring 3 levels 1777, 1760 and 1740 very closely.
FOREX
AUD.USD – 8978
After starting higher last week the AUD found it difficult to hold ground as it fell back down to a low of 8936 which is near our FICM level of 8924 mentioned in previous weeks.
For the up move to restart and form a new trend we would like to see an early break past 9058 and 9114 before attempting to reach and break 9188. Once this level is reached and broken then we could see 9210 reached. If the AUD continues to find strength then we could see it extend and reach 9325.
If the AUD restarts the longer term down move then we would like to see 8923 broken early in the week with solid long down bars which could then lead the pair towards 8873. For the next push lower we would like to see both 8873 and 8813 broken with strong momentum before reaching 8738 where it might find some temporary support.
EUR.USD – 13738
Another week of indecision for this pair as we saw a strong move up early in the week followed by a sideways move. There is definitely more to this pair than meets the eye. We will be watching this pair very closely as we believe a sharp move is forming.
For the EUR to continue higher we would like to see a new break and close past 13740 early in the week followed by 13740 becoming a strong level of support moving forward. Once this occurs we need to see long up bars reach 13805. Once this is achieved and if the markets have decided that the EUR should go up then we could see the previous high of 13893 (set back in Dec 2013) tested. If this occurs then we might see the EUR near 13938 and possibly touch 14000 once again.
For the EUR to move lower then we would like to see a strong early break past 13701 before reaching 13650. We would then like to see the break of 13650 with a long solid down bar followed by a break past 13589. If this occurs then we would like to see a solid break with a long down bar to break through 13515. The EUR then might find some potential short term support between 13432 and 13396.
GBP.USD – 16614
After an impressive rally the previous week the GBP fell away as it could not keep the momentum going. Just like the EUR we will be monitoring this pair very closely as we believe a sharp move is forming.
If the GBP continues its strong move higher we would like to see it break back through 16747 with a long solid up bar. If this occurs early in the week and the momentum continues then we could see 16914. Once this level is reached we will look to revise.
If the GBP does start a downward move then we would like to see 16537 broken early in the week reaching 16445. Once this is reached we would like to see a long down bar break this level before reaching 16295. If the GBP does not find support here then 16070 could be reached.
USD.JPY – 10248
The USD once again is trying to regain its strength, slowly but surely. We anticipate some Volatility to come into the markets therefore we will be watching this pair closely.
If the USD continues to find strength then we would like to see 10279 broken early in the week. Once this occurs we could then see 10353 reached. If we are to see a continuation of the up move we would need to see a long up bar break through 10353 before reaching 10429.
If the down move restarts then we would like to see 10206 broken early reaching 10150. If the momentum continues strong and 10150 is broken then 10052 could be reached.
COMMODITIES
GOLD – 1324
After an initial attempt at pushing higher early in the week GOLD only closed 6 points higher. Could this mean that some traders took some profits off the table or did the short squeeze stop? We will be monitoring the flow in and out of GOLD if the equity markets move lower. As we had a sideways move we will maintain last weeks levels.
For GOLD to continue higher we would like to see last weeks momentum continue with an early break past 1351. Once this occurs then 1391 could be reached. We will revisit GOLD upper levels once 1391 is reached as GOLD might find some resistance.
FICM, which is our primary model has indicated a potential slowdown near current levels. If the slowdown does occur and we see GOLD reverse back down then we would like to see an early break down past 1313 which could lead to reach 1299. The move down could be short lived as GOLD could find support near 1269 – 82 area.
US LIGHT CRUDE OIL – 102.34
Another early solid break for OIL, but once again failed to maintain the strong momentum. We will be watching OIL closely for signs of a break over the next week.
For OIL to continue its move higher we would like to see another attempt at breaking and closing above 102.70 early in the week leading it towards 104.07 with strong momentum and long up bars. Once this occurs and if the momentum is still strong we could see 106.19 reached with an extension towards 107.21.
For a down move to restart then we would like to see OIL break back down below 101.31 with strong momentum which could see 100 broken again and 99.35 reached. If the momentum continues strong and we see a solid break past 99.35 then 97.44 could be reached and a possible extension to 96.99.
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