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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.
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Trade View has entered the weekend Net Long.
AUSTRALASIA
ASX – 5470 ( – 50 or – 0.91% )
The ASX fell away again last week dipping below 5447 on Friday before finding strong support near a longer term level at 5407.
If Friday’s move was enough to restart the upmove this week then we would like to see a strong break and close back past 5505 before reaching the area between 5541 – 62. If the momentum is strong then an ambitious push towards 5732 could be made.
For the down move to restart after Friday’s strong rally then we would like to see a reverse move back down past 5447 and 5415 with a long down bar. As mentioned last week if the downside move gains momentum then an old level 5367 will be watched very closely as it was a solid level of support before the push higher.
EUROPE
FTSE – 6597 ( – 69 or – 1.04% )
The FTSE is struggling at the moment and the only thing that will help it go higher is if the rest of the world markets move higher.
“There is not much to discuss here just that a struggling market will continue to struggle until a big shift is made to make it move higher.”
If Fridays bounce holds and the upmove restarts then we would like to see a solid long up bar break past 6632 before another attempt at breaking 6696 is made. If the upward momentum is strong then 6738 and 6792 could be reached.
If the FTSE is to continue lower then we would like to see 6632 hold as a solid level of resistance before another strong break past the area between 6550 – 23. If the downside momentum is strong then 6459 could be tested and determine the FTSE’s next trend direction.
DAX – 9083 ( – 94 or – 1.02% )
Last week saw the DAX extend the down move to a +10% correction. It is obvious that the rest of the world markets followed it down, but not to the same extend. Now if the world markets continue to rally after Friday’s strong bounces then the DAX has a long way before it catches up.
If the DAX has overextended itself with its 10% correction and the upmove is to restart, then we would like to see a solid break past 9201 with a long up bar. Once this level is broken then we could see a further push past 9321 – 59 area before possibly reaching 9401.
If the market continues lower then we would like to see another break down past 8959. Once this level is breached then the levels of interest will be 8841, 8778 until 8520 is reached.
US
S&P – 1928 ( + 5 or + 0.26% )
Fridays bounce show’s traders how influential the S&P really is on the rest of the world. Even though it broke past 1900 when the strikes on Iraq where announced it quickly bounced back to close slightly higher for the week. Therefore our comments from last week remain the same.
For the up move to restart the S&P will now need to make a solid statement to the markets by breaking back above 1938, 1947 – 50 before testing 1964 again, otherwise.
The downward process started last week with some force. If it is to continue then we would like to see the same momentum breakthrough 1909 early in the week before testing 1882. If it continues strong then 1869 could be reached.
FOREX
AUD.USD – 9276 ( – 39 or – 0.42% )
“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 – 13410 ( – 19 or – 0.14% )
The EUR attempted another move lower last week but just like the equity markets saw a rally on Friday to only close 19 points lower. Therefore our comments remain the same.
For an upmove to restart we would like to see support near 13391 – 75. Once this is achieved we could see a move higher breaking past 13472 – 81 reaching 13513. If the upward momentum remains strong then we could see further breaks past 13554 and 13589 reaching 13620.
For the EUR to continue it’s move down then we would like to see a strong momentum break with a long down bar through 13391 – 75 reaching 13342. If the downward momentum takes hold and we see a free fall, the levels we will be monitoring are 13342, 13246 and finally 13104.
GBP.USD – 16773 ( – 53 or – 0.31% )
The GBP continued it’s fall from grace last week.
For the GBP to move higher we would like to see an early break back up past 16806 before reaching 16860. If the momentum is strong then we could see an extension towards 16936.
For the GBP to continue its move lower we would like to see 16731 broken early in the week. Then we will be watching the following levels; 16693, 16664, 16600 on its way down to 16537.
USDJPY – 10200 ( – 57 or – 0.56% )
The dollar yen is playing a game ‘tug of war’ at the moment as the USD wants to strengthen, but there are also global event risks attracting attention. The question is who will win the battle for safe haven plays in this environment?
For the USD to move higher we would like to see a strong break above 10270 pushing towards 10309. It is important for the pair to break past 10309 this week before 10356 is reached. This level will then need to be broken with a long solid up bar before we see 10410.
If the down move restarts we would like to see another break back down past 10192 followed by a strong break past 10152 – 69 area reaching 10052. If 10052 is then broken with a long solid down bar we could see 9982 – 77.
COMMODITIES
GOLD – 1309 ( + 16 or + 1.24% )
Last week saw GOLD experience some old fashioned strength when issues are a ripe in the world.
For the upward move to restart we would like to see a solid break and close above 1312. If the upward momentum is strong then 1330 could be tested next. As this market is event driven at the moment, breaks past 1330 could be very strong reaching 1360 (if the situations get completely out of hand).
If a down move restarts we would like to see a strong break and close past 1295 before reaching 1285. If the momentum is strong the we could see a strong break past 1274 before reaching 1264. Once this level is also broken we could see 1252.
US LIGHT CRUDE OIL – 9751 ( – 9 or – 0.09% )
After a strong aggressive down move the previous week, OIL settled last week near our FICM levels of 9721 and 9699 to close only 9 points lower. Therefore our comments from last week remain the same.
NOTE: Bullish Divergence forming
For the upmove to restart we would like to see 9721 become a strong level of support before a move higher past 9821 occurs. Once this level is reached and broken we could see OIL reach 99.42 and possibly break back into the $100 a barrel reaching 100.16.
If the move lower takes another leg down then we would like to see a solid break past 9721 – 9699 area before reaching 9646. Another long down bar break past 9646 could lead OIL on a bit of a FREE FALL past 9445 on its way to 9365.
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