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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 and discuss in our LIVE CHAT ROOM.
Trade View has entered the weekend Net Long.
AUSTRALASIA
ASX – 5635 ( + 9 or + 0.16% )
The Bearish Divergence formed and played an important role this week slowing down the ASX creating a sideways move. Therefore our comments from last week remain the same.
For the up move to continue we would like to see a strong break past last weeks highs of 5684 before a further push can be made towards 5732. Once this level is reached then we will discuss the next possible extensions in our LIVE CHAT ROOM.
For the down move to restart we would like to see the Bearish Divergence take full effect followed by a strong break past 5567 – 45 before a further push past 5497 is made. If the downward process is strong then we could see 5447 where the ASX could find some support.
EUROPE
FTSE – 6809 ( + 42 or + 0.62% )
Even though the FTSE closed higher last week it was in a bit of a sideways range for the rest of the week as the slowdown process took effect. NOTE: Bearish Divergence formed.
For the move higher to continue we would like to see a solid move past 6816 before attempting close above 6851. If the momentum is strong then the FTSE might make an attempt at breaking the highs of 6896 formed in May 2014.
With Bearish Divergence forming, if we see a downside move take effect then a break past 6784 followed by 6738 could be the start before leading towards the area between 6696 – 81. Once this area is broken then 6632 could be tested on its way down to 6595.
DAX – 9457 ( + 107 or + 1.14% )
The DAX started the week strong but then was stopped at the 9600 area and closed back down by 150 points from the high’s. NOTE: Bearish Divergence forming
If the DAX continues higher then we would like to see another strong break with a long up bar through 9580 before an attempt at 9672 is made. Once this level is broken we will be monitoring 9801.
If the Bearish Divergence takes effect and the DAX moves lower breaking back down past 9401, we could see 9321 before a strong move down towards 9201 is made. If the downward momentum is strong then 9114 could be see.
US
S&P – 2000 ( + 10 or + 0.50% )
Ok, now we have reached 2000. The real question remains, is the US economy really improving?NOTE: Bearish Divergence forming.
For the up move to continue then we would like to see 2000 remain as a strong level of support before a push past 2012 is made. Once this level is broken then if the momentum continues strong we will be monitoring 2023 and 2057.
If the slowdown and Bearish Divergence take full effect then a strong break past 1981 could start a move lower reaching 1968 again. If the downward momentum is strong then 1943 and 1927 could be reached.
FOREX
AUD.USD – 9333 ( + 17 or + 0.18% )
“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 – 13132 ( – 109 or – 0.82% )
It looking more likely the longer the Ukraine conflict goes on the more the Eurozone will be effected. This was shown in the USD strength against the EUR last week.
For an upmove to restart we would like to see a strong break and close back up early in the week past 13162 before a push towards 13248 is made. If the momentum continues strong then 13329 could be reached. Once this is achieved then the EUR could see 13375 – 91 area as resistance.
If we see continued strength in the USD and the EUR takes another leg down then 13104 could be reached before reaching 13086 and 13008. If the EUR goes into another dive and dips below 13000 then we could see an extension reach 12949.
GBP.USD – 16595 ( + 23 or + 0.14% )
The GBP continued to find support near the 04th April Low’s. One thing to note is that it is now outside the Long Term Standard Deviation Channel. As the GBP has not moved much our comments from last week remain the same.
For the GBP to move higher we would like to see a solid level of support form around 16537 – 20 before a break past 16612 is achieved reaching 16662. Once this is reached then 16704 could be the difference between a rally or a continued down move.
For the GBP to take another leg lower, then we would like to see the area between 16537 – 20 broken early in the week followed by a further push past 16443 before reaching 16401. If the momentum is strong then 16364 could be reached.
USD.JPY – 10406 ( + 15 or + 0.14% )
The USD struggled to hold the rally early in the week but found some strength on Friday closing slightly higher for the week. One important note is that it bounced off of a major FICM level of 10356 and has closed above it. This level will play an important role moving forward. If the S&P continues higher this week the USD could find some real strength moving forward. As we have had a sideways move our comments from last week remain the same.
For the USD to move higher we would like to see a strong break and close back above 10410 early in the week pushing towards 10541. Once this level is reached we will discuss in our LIVE CHAT ROOM.
If the down move restarts we would like to see an early break and close past 10356 with a long down bar before reaching 10299. Once this level is broken then 10252 could be seen followed by 10207.
COMMODITIES
GOLD – 1287 ( + 7 or + 0.55% )
A very tame week for GOLD, it is really stuck between a rock and a hard place at the moment. The USD wants to strengthen, but there are also potential Event Risk’s popping up all over the place. Which one will win, only time will tell. In the meantime our comments from last week remain the same. CAUTION should be observed either way.
For the upward move to restart we would like to see a solid break above the 1293 – 95 area. Once this occurs then the area between 1306 – 12 could be seen.
If a down move continues then we would like to see a strong break and close 1274 before reaching 1264. Once this level is also broken we could see 1252.
US LIGHT CRUDE OIL – 9579 ( + 245 or + 2.62% )
In our Weekly brief – Monday 14th July 2014, we said “….Caution should be taken if you decide to chase explosive moves.” Now we don’t say it because it sounds good, we say it because markets tend to mean revert and when chasing a market you need to understand the underlying reason for the move before doing so.
For the upmove to continue then we would like to see a strong push past 9629 followed by a long up bar break and close past 9699 – 9721 area before potentially reaching 9789.
If OIL restarts the move lower then we would like to see a sharp reversal early breaking back down past 9522 before reaching 9445. Once this is broken then 9365 needs to be broken with a long solid down bar followed by the same for 9237 before reaching 9146.
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