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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5367
The ASX traded sideways last week finding it difficult to close above our FICM level of 5366. Therefore our comments remain the same as last week with a slight amendment to the downside.
For the up move to restart we would like to see a strong close above 5366. Once this level is achieved 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 the down move was the start of a longer more prolonged move then we would like to see an early break past 5330 and 5270 before 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 – 6603
The FTSE moved higher mid week reaching a high of 6644, but the momentum slowed and we saw a close only 100 points higher from the previous week.
For the FTSE to have any chance of a new upmove forming then we would like to see 6637 broken early in the week followed by a strong push towards 6657. Once this level is reached we would like to see a solid break and close above 6657 with a long up bar. This could then lead it to reach 6740.
For the down move to continue we would like to see an early break past the area between 6586 – 63. One this occurs we could see 6498 reached. If the downward momentum continues then we will be paying close attention to the area between 6433 – 6395 as the FTSE could find temporary support.
DAX – 9571
Another strong lead by the DAX moving 300 points from the previous weeks close but the others just did not want to follow. One thing to note is that the range set back in Dec was completed.
If we are to see a continuation of the strong up move then we would like see a solid start to the week with a break past 9617. Once this occurs and if the strong momentum continues then 9734 could be seen. If further momentum continues then a test of the Jan highs of 9794 could be seen.
If the down move restarts then we would like to see an early break past both 9509 and 9431 before we could see further moves towards 9351. Once this level is also broken we could see 9233 were the DAX could find its first level of support.
US
S&P – 1857
The S&P seems to have lost its drive at the moment. We will be monitoring this very closely as we could see sharp moves in the near future. Basically pay attention
For the S&P to move higher we would first like to see a strong break past 1862 followed a push higher above 1878 before another test of the all time highs of 1888.
If we continue to see weakening data and the markets follow, a break and close below 1856 could start a down move. Once this occurs then we would like to see 1837 broken early reaching 1812 and possibly 1805.
FOREX
AUD.USD – 9246
Without action from the RBA the AUD continues to rally. It is starting to look like the FX market thinks talk is cheap, it wants action. If Glenn Stevens thinks that the AUD is at uncomfortable levels above 90 then he might need to act on it otherwise it might become really uncomfortable above 95.
For this current upmove to continue we would like to see a strong break above 9289 following through to 9319. Once 9319 is broken then we would see 9404. If the momentum continues then 9491 could be the first level of resistance.
If the RBA surprises the markets and the AUD starts a downward move then we would like to see 9185 broken early in the week followed by a strong break past 9143 and 9089. Once this occurs then 9017 could be tested. If the downward momentum is strong then an ambitious extension towards 8924 could be seen.
EUR.USD – 13751
After a rally early in the week the EUR moved lower to close down by only 40 points. Just like his AUD counterpart if Mario Draghi wants to curb the EUR then he needs to act.
For the up move to restart then we would like to see an early break past 13790 reaching 13831. Once this occurs and if 13831 is also broken with strong momentum then we could see the EUR near 13938 – 13966.
For the EUR to continue its move down then we would like to see 13722 broken early in the week with strong momentum. This could be followed by a further break past 13685-48 before we see 13589. If the downward momentum is strong and we could reach 13515.
GBP.USD – 16637
The GBP moved higher last week after a potential downward move in the previous week.
If the GBP restarts a move higher then we would like to see another break past 16686 followed by a strong long up bar pushing towards 16747. Once this is reached and if the momentum continues strong then 16914 could be reached.
If the down move restarts then an early break past 16607 and 16537 could lead the GBP down towards 16443.
USD.JPY – 10282
After a timid start the USD made another move higher, not by much but just enough to be noticed as it tested the 10300 area. With Janet Yellen speaking tonight it could get interesting.
If the USD continues its strength then we would like to see a strong break and close above 10309 before reaching 10345. if the upward momentum continues strong then 10429 and 10479 could be reached.
If 10309 proves to be hard to break then another move down could restart if 10243 is broken early we could then see a push towards 10186 and 10152. Once these levels are broken we could see the pair near 10078 – 52 again.
COMMODITIES
GOLD – 1295
GOLD continued lower last week reaching 1285 which was only 3 points higher than our potential level of support of 1282. If Normality comes back into the markets will GOLD be a safe haven?
For GOLD to restart the move higher we would like to see an early break and close past 1314. Once this occurs then we could see it reach the area between 1349-56. We will revise once this area is reached.
If the down move starts another leg then we would like to see 1282 broken reaching 1269. If the momentum continues then a break and close past 1269 could see 1246 reached.
US LIGHT CRUDE OIL – 101.57
OIL pushed higher last week bouncing off 99.33 area.
If the upmove continues then we would like to see a break past 101.82. Once this occurs then 103.01 could be reached. If the momentum continues strong then the March highs of 104.92 could be tested.
For a longer term down move to restart then we would like to see a break past 101.19 early followed by 100.14 be reached. Once this level is broken then 99.33 needs to broken with a long down bar before reaching 98.12 and then finding support near 97.41 – 96.95.
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