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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 Short.
AUSTRALASIA
ASX – 5308
The ASX started off the week by moving lower. By the middle of the week we saw an attempt to move higher but once it reached 5423 (FICM level) it found resistance and continued its move down.
For the up move to restart we would like to see a strong push up from current levels towards 5366. Once this level is reached we need to see a long up bar break and close above 5366 before we could see 5408. If the upward momentum continues strong then 5423 could be reached. If we are to see 5423 broken then we would like to see strong long up bars before a new attempt at 5483 can be made.
If last weeks down move was the start of a longer more prolonged move then we would like to see an early break past 5270 reaching 5200. Once this is achieved we would like to see a solid break through this level continuing towards 5144. The test for the ASX will then come between 5125 and 5094. If this area does not provide support then we could see further downside moves.
EUROPE
FTSE – 6516
Unlike previous weeks the FTSE went one way last week, down.
For the FTSE to have any chance of a new upmove forming then we would like to see 6563 broken early in the week followed by a strong push towards 6628. Once this level is reached we would like to see a solid break and close above 6628 with a long up bar. This could then lead it to reach 6657. If the momentum continues strong then 6740 could once again be reached.
For the down move to continue then we would like to see an early break past 6498. Once this occurs then we will be paying attention to the area between 6433 – 6395. If the downward momentum is strong and we see a break past this area we could reach 6358 and possibly an ambitious extension towards 6225 could be achieved. If the momentum slows down near 6433 – 6395 then the FTSE could find temporary support.
DAX – 9033
The DAX showed its true colours last week as it made strong moves lower after showing resistance against the rallies by other markets in previous weeks. The one thing we will be watching is that the DAX bounced off its lows of 8908 to close 115 points higher, could this then provide guidance for this week?
If Fridays bounce is an indication that the DAX would like to restart an upmove then we would like to see an early break past 9133 followed by a further break past 9222 before reaching 9377 were the DAX might find some resistance.
If the down move continues with the same momentum then we would like to see 8960 broken early in the week pushing all the way down to 8778. Once this level is reached and if the break is strong then we could see an extension towards an ambitious level of 8533.
US
S&P – 1839
“Once a technical break occurs then it needs to be followed up by fundamentals otherwise it might not hold those levels for very long”. Enough said.
For the S&P to restart its move up then we would like to see 1846 broken early in the week followed by 1864 broken with strong momentum before a push towards the all time highs of 1888 can be achieved. If this occurs we will discuss in our members area.
If we continue to see weakening data this week and the down move continues then we would like to see 1837 broken early reaching 1805. Once this is broken we could see 1794 followed by 1777.
FOREX
AUD.USD – 9029
The AUD moved in a 200 point range to then settle only 38 points lower. Therefore our comments remain the same.
For the upmove to continue and the new trend takes effect we would like to see a strong early break past 9134 followed by a break past 9182. This could then lead the pair to reach 9289. If the momentum continues then 9373 could be reached.
If the AUD restarts the longer term down move again then we would like to see 9002 broken early in the week which could then lead the pair towards 8924. If we see a strong long down bar through 8924 then we could see 8873 where it might find some temporary support.
EUR.USD – 13913
After a slow start to the week the EUR strengthened once again this time moving past previous highs. The question now remains how much higher before the ECB makes their move to curb(lower) the Euro? We will be monitoring this pair for a possible momentum shift.
For the up move to continue we would like to see another attempt of a break and close above 13938 and possibly pushing past 14000 to reach 14024. Once this occurs we could see 14208 if the momentum is strong. If the ECB does not act then 14370 could be seen.
For the EUR to move back down we would like to see a strong early break past 13837 before we could see 13762. Once this is broken then 13685 could provide temporary support.
GBP.USD – 16646
After strong moves throughout late 2013 and early 21014 it seems that the GBP has lost it’s gusto. We are still monitoring this pair very closely as we believe sharp moves are near.
If the GBP restarts a move higher then we would like to see it break back through 16677 which could lead it towards 16747. 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 before reaching 16443. Once this is reached we would like to see a long down bar break 16443 before potentially settling near 16295. If the GBP does not find support here then 16070 could be reached.
USD.JPY – 10134
It is now obvious that the JPY is the safe haven play, as the equity markets moved lower so did the USD basically giving back the 200 points gain from last week
If the USD finds strength and it starts a new upmove then we would like to see 10179 broken early in the week before reaching 10228. Once this occurs and if the momentum is still strong then we could see 10309 reached again.
If the USD and the equity markets keep losing their appeal and the down move continues then we would like to see 10078 broken early reaching 10052. Once 10052 is broken we could see a dip below 10000 reaching 9978. If the downward momentum is strong then 9880 – 64 could be seen and possibly provide support.
COMMODITIES
GOLD – 1381
The attitude towards GOLD looks like it has shifted from something no one wanted to now becoming a safe haven. As the equity markets unwind and if they continue lower some old outrages targets on GOLD may be met.
For GOLD to make a new move higher we would like to see an early break and close past 1393 with a long up bar. Once this occurs we could see 1433. If this level is also broken with the same momentum then 1475 could be seen very quickly.
If 1393 proves to be a solid level of resistance and a down move occurs then we would like to see 1351 broken followed by a move towards 1337. Once this level is also broken we could see 1309.
US LIGHT CRUDE OIL – 99.02
And down it goes, 300 points.
If OIL has bounced off 97.41 and is now going to continue its move higher we would like to see another attempt at breaking and closing above 99.33 early in the week. This could then lead the commodity to reach 100.43 followed by 101.28. If the momentum continues strong then we could see 102.94 again.
For a down move to restart then 99.33 needs to become a solid level of resistance and a move back down past 97.41 would restart the downward process. Once this occurs then 96.95 would need to be broken before it could test 95.98. If the downward momentum continues strong then 94.54 and 93.46 will be monitored closely as this would complete the range.
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