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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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. Trade View has entered the weekend Net Short.
AUSTRALASIA
ASX – 5549 ( + 43 or + 0.78% )
The ASX ranged sideways at the start of the week before an attempt at breaking April’s highs was made. This attempt was short lived as it fell back down to the weeks lows. This too was short lived as another push higher was made on Friday closing the week only 43 points higher.
NOTE: Double Top formation in place with Bearish Divergence also forming.
For the up move to continue and possibly start a new trend up the Double Top and Bearish Divergence cannot play out, for this to occur we would like to see a solid break and close past 5562 with a long up bar before a further push towards 5732 is made.
If the Double Top and Bearish Divergence do play their textbook roles and we see another attempt at a downward move then we would like to see 5491 broken early in the week followed by 5447 and 5415. We will then be watching the all important level of 5367. It will all depend on how quick the downside moves progress if this level is to be broken.
EUROPE
FTSE – 6735 ( + 65 or + 0.97% )
After a nasty tumble last week the FTSE gained some composure rallying early up to 6792 were it found some resistance.
For the up move to restart we would like to see an early strong momentum break and close past 6790. Once this is achieved 6833 and 6857 will play important roles in any moves higher. If the upward momentum is strong and we see a long up bar break through 6857 then 6904 could be tested.
If the FTSE cannot break past 6790 and the downward process restarts then a break past 6737 early in the week could lead the Index down to 6696. If the downward momentum continues strong past this point then 6632 could be tested next.
DAX – 9735 ( + 62 or + 0.64% )
After a heavy move to the downside last week the DAX made an early attempt to get back up but fell back down to only close 62 higher for the week. As the DAX has been a market leader in the past we will continue to monitor the DAX behaviour over the next few weeks to gauge the market sentiment overall.
For the upmove to restart we would like to see 9771 broken early in the week pushing up towards 9856. Once this level is broken we could see 9899 followed by an attempt at breaking 9949 before touching 10,000 again.
If the DAX has already started it longer term downside move and we see another aggressive leg down then we would like to see an early break past 9707 with momentum down to 9579. Once this level is broken then 9454 could slow the move down before reaching 9401.
US
S&P – 1977 ( + 9 or + 0.46% )
The S&P tried to move higher again early in the week but event risk pushed it lower on Thursday. The downside move was short lived as with any event risk over the past few years the markets have brushed it off as noise.
The 2 questions I think are important to understand about this market are:
Is this a healthy strong market when it behaves like this?
Would the market be at the current levels if the FED did not Intervene.
I will say it again and again, there must be some serious issues brewing under the hood which the FED is not telling the public about.
Once again we have a Friday rally and If Fridays bar is an early sign for this week and we see a move higher, then we would like to see the all time highs of 1985 broken early with a long up bar. If the up move has momentum then the S&P could reach the next projected level of 1993 – 2002 over the next few weeks.
Our comments for the downside remain the same. For the down move to restart then we would like to see a solid break back down past 1964 with a long down bar reaching the area between 1950 – 47. Once this area is broken 1938 and 1922 will be the next 2 levels we will be watching.
FOREX
AUD.USD – 9393 ( + 4 or + 0.04% )
“This pair is range bound and the 2 FICM levels we are looking for before a significant move occurs are 9203 and 9423. Until these 2 key levels are broken our comments remain the same.”
For the move higher to continue we would need to see an early break and close past 9423 and 9460 before the potential to reach 9539 could occur. Once this is reached the AUD could start a new phase and potentially new up trend.
If the USD finds strength and 9423 proves to be difficult to stay above, then a move past 9333 could reach 9287. If the downward momentum is strong then we would like to see a strong break and close past 9287 reaching 9203 were the AUD might find temporary support.
EUR.USD – 13524 ( – 83 or – 0.61% )
The EUR moved lower last week dipping below 13500 level but then bounced off the Jan 2014 lows. There is some Bullish Divergence forming which could be enough to support it around these levels.
For an upmove to start we would like to see the Divergence play out and the support levels near the Jan 2014 lows hold. This could see an early break past 13585 towards 13620. Once this level is broken then 13669 could be seen before a final push up towards 13713 is attempted..
For the EUR to continue it move down then we would like to see a strong momentum break with a long down bar through 13513 and the area between 13482 – 72. Once this occurs we could see the EUR find temporary support near 13392.
GBP.USD – 17083 ( – 37 or – 0.22% )
The GBP attempted another push higher early but the slowdown took effect and we saw another slight move lower. Even though it has moved lower not much movement occurred, therefore our comments from last week will remain.
For the GBP to move higher we would like to see solid support near 17105 which could then lead the pair towards 17283 and eventually 17324.
For the GBP to move lower then we would like to see a solid long down bar break and close below 17064. Once this occurs further downside moves past 17000 could reach 16935.
USD.JPY – 10134 ( + 1 or + 0.01% )
The USDJPY made another attempt at moving higher early in the week but failed to close above 102 as previously had occurred. We have another close below 10152. The big question now remains, is this formation the start of a down move? As it has only closed 1 point higher our comments remain the same.
For the USD to move higher we would like to see a strong break above 10166 followed by a strong close through 10270 pushing towards 10309. If the momentum is strong then we could see 10356 reached. This level will then need to be broken with a long solid up bar before we see 10410.
If the down move is to continue we would like to see 10152 – 69 area hold as a strong level of resistance. If the downward momentum then continues we could see 10052 tested. If 10052 is then broken with a long solid down bar we could see 9977.
COMMODITIES
GOLD – 1310 ( – 28 or – 2.09% )
It did not take it long for GOLD to get smacked back down. One thing that this market does not like, is GOLD going up (possible safe haven play – scare the markets) and the markets going down at the same time.
For the upward move to continue higher we would like to see another strong break past 1330 before pushing towards 1351 – 59. Once this area is broken the 1367 – 77 area will play an important role in defining the next move.
If the down move restarts then we would like to see a strong momentum break past 1296 before reaching 1285. Once this level is also broken we could see 1274.
US LIGHT CRUDE OIL – 101.94 ( + 130 or + 1.29% )
With escalating tensions around the world OIL found some support late in the week with a strong rally which was halted by the area between 103.48 and 104.06 (2 of our FICM levels mentioned last week), this then forced OIL back down to under 102.
NOTE: We have noticed some great Spread trades between WTI and BRENT over the past few weeks.
For the upmove to restart we would like to see an early break back above past 102.44. If the momentum is strong then we would like to see a strong up bar break and close past both 103.48 and 104.06 before further moves are possible.
If the move lower restarts then we would like to see an early break past 101.57 followed by a strong break past 100.15 reaching 99.42. This could then lead OIL to reach 98.21 with the possibility for support near 97.21.
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