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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5597 ( – 38 or – 0.67% )
The slowdown and hence sideways move continued last week with an attempt at a reversal on Friday with a move down which found support between the area of 5545 – 67 mentioned last week.
For the up move to restart this week we would like to see a strong break back up through 5616 before attempting to break past the previous weeks highs of 5684. Once this is broken then a further push can be made towards 5732.
For the down move to continue we would like to see another attempt at breaking past the area between 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 – 6870 ( + 61 or + 0.90% )
The FTSE pushed higher once again in line with some of the other markets creating a new high of 6905. But once again failed to keep going as Friday saw an attempt at a selling off. We will be watching the FTSE closely as further Bearish Divergence has formed. If the rest of the world markets fall away this could be significant for the FTSE. If they don’t then we could see the FTSE higher.
For the move higher to continue we would like to see a solid attempt at breaking through 6905 with a long solid up bar. If this occurs then we could see 7044.
With another Bearish Divergence formed, if the downside move takes effect then a break past 6851 and 6816 could lead the FTSE towards 6784 followed by 6738. Once these levels are broken the area between 6696 – 81 could provide temporary support.
DAX – 9784 ( + 327 or + 3.46% )
As mentioned before, if the world Indices especially the S&P breaks its all time highs then “the DAX has a long way before it catches up.” The potential of a peace deal in the Ukraine could be the catalyst.
If the DAX continues higher we would like to see another strong break with a long up bar through 9829 and then another strong break past 9896. If the momentum continues strong then an ambitious but yet achievable level of 10035 could be seen.
If the DAX moves lower then we would like to see 9750 broken early in the week with a long down bar. Once this occurs then 9670 could be seen and if the momentum is strong then 9580 could provide some early support.
US
S&P – 2008 ( + 8 or + 0.40% )
It has been a nervous week for the S&P moving above 2000 and then back below and then back above. Is the close above 2000 enough to help it move higher? Even though we have moved slightly higher our comments form last week remain the same.
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.
For the down move to start we would like to see a strong break past 1981 before reaching 1968 again. If the downward momentum is strong then 1943 and 1927 could be reached.
FOREX
AUD.USD – 9377 ( + 44 or + 0.47% )
“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.”
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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 – 12951 ( – 181 or – 1.38% )
Super Mario to the rescue with an unexpected rate cut.
For an upmove to restart we would like to see a strong break and close back up early in the week past 13033, this could then lead the pair to 13086. If there is enough momentum then 13104 could be past on its way towards 13162 where the EUR finds further resistance.
If we see continued strength in the USD and the EUR takes another leg down then a break past 12915 could start a move through 12897 reaching 12763. A solid break past this level could begin a FREE FALL for the EUR.
GBP.USD – 16325 ( – 270 or – 1.63% )
Was the GBP move a sympathy move in line with the EURUSD? One thing to note is that it is now back inside the Long Term Standard Deviation Channel.
For the GBP to move higher we would like to see a solid start to the week breaking past 16443 reaching the area between 16537 – 20. If the momentum is strong then we could see a 16600 print.
For the GBP to take another leg lower, we would like to see 16229 broken early in the week followed by another strong push past 16148 before it dips below and prints 15986.
USD.JPY – 10508 ( + 102 or + 0.98% )
The USD found its mojo last week pushing past major levels on most currencies. With the ECB dropping rates, BOJ talking down the YEN. It is now seem’s that the US might be the first to raise rates and the BIG boys know it, therefore positioning themselves for a srtonger USD.
For the USD to move higher we would like to see a strong break and close back above 10541 before printing 10683. Once this level is reached we will be watching the area between 10883 – 10914 over the next few weeks.
If the down move restarts we would like to see an early break and close back past 10410 before reaching 10356. We would then like to see 10356 broken with a long down bar before reaching 10299.
COMMODITIES
GOLD – 1268 ( – 19 or – 1.48% )
The less there is to worry about the more GOLD becomes unloved.
For the upward move to restart we would like to see a solid break above 1274 with a long upbar before testing the area between 1293 – 95. Once this occurs then the area between 1306 – 12 could be seen.
If a down move continues then we would like to see a another strong break and close below 1252 before breaking 1241. Once this level is broken then 1230 and 1215 will be watched closely.
US LIGHT CRUDE OIL – 9340 ( – 239 or – 2.50% )
Once again: “….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 we would like to see a strong push back up past 9368 before reaching 9432. Once this too is broken 9557 could be next before strong resistance is met near the 9699 – 9721.
If OIL restarts another leg down then we would like to see 9237 broken followed by 9146. Now the break past 9146 could once again send OIL into a FREE FALL. This will be watched closely over the next few weeks. Levels to watch are 8973, 8844 and 8727.
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