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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5327 ( + 15 or + 0.28% )
After an Initial drop the ASX found its feet and settled near the low 5200’s. Once this occurred we saw the Bullish Divergence take effect and the move higher started. As the ASX has only closed 15 points higher our comments from last week remain the same.
For the up move to restart we would like to see an early solid long up bar break and close past the all important 5366 area. Once this is achieved we could see the ASX rebound strongly breaking through 5382 and 5415 before testing the area between 5447 – 62.
For the down move to continue we would like to see a strong move past 5270 before testing the area between 5199 – 76. If the momentum continues strong we might see an extension down towards 5072 – 56.
EUROPE
FTSE – 6528 ( – 141 or – 2.11% )
Another 2%+ down move for the FTSE breaking through the August 2014 lows but then bounced straight back to settle in between our FICM area of 6523 – 50. This will now make it for an interesting week ahead.
For the move higher to restart we would like to see another solid long up bar break and close past 6550 reaching 6602. Once this occurs we could see 6652 reached before we see 6702.
If the downside move takes another leg down we would like to see a flurry of early breaks starting with 6523 and 6459 both with long down bars. Once this occurs then 6394 could be breached on its way down to 6357. If the downward momentum is strong then we could see an ambitious 6264 printed.
DAX – 9279 ( – 256 or – 2.68% )
The DAX moved lower last week and not only did it close over 2.5% lower it closed 256 points lower (last week it closed 255 points lower) coincidence? Also we saw the lows reach 9162 which was only 1 point below 9163 mentioned last week.
If the DAX restarts it’s move higher then we would like to see a strong break back up above 9303 reaching 9401. If the upward momentum is strong early then 9475 could be seen before the DAX bounces back to 9580.
If the DAX continues it’s strong move lower then we would like to see an early break and close back down past both 9236 and 9200 before reaching 9163 again. Once this occurs and if the move lower is strong then 9084 could be tested before a push below 9000 is made reaching 8961.
US
S&P – 1967 ( – 16 or – 0.81% )
Ooops again. The S&P reached a low of 1925 which was only 2 points lower than our 1927 level mentioned then rebounds 40 points ( this my friends we on the desk like to call the Tapout trade).
For the up move to follow through after Friday’s strong close we would like to see 1973 broken early in the week followed by a strong long up bar break and close past the all important 1981 level. Once this occurs we could see another attempt at pushing past 1993 – 96 and a possible 2000 print.
If the downside move continues strong this week we would like to see 1953 broken early in the week followed by a strong break past 1943 continuing through 1927. Once this occurs then 1915 could be tested and with an extension towards 1900 not out of the realm.
FOREX
AUD.USD – 8674 ( – 91 or – 1.04% )
The AUD continued lower last week. As mentioned before “With USD strength forming all over it will be hard for the AUD to gain upward momentum” The AUD is at an important level which is the JAN 2014 lows.
For the up move to restart we would like to see a solid long bar break and close back above 8774 followed by a strong move past 8823 which could potentially reach 8971.
The AUD has now broken down and the next key level is 8660 (lows from Jan 2014). If this level is broken early this week we could see 8563 and 8461 very quickly. Once these levels are broken 8378 could be seen.
EUR.USD – 12514 ( – 168 or – 1.32% )
Another move lower for the EUR with USD strength continuing. The EUR continues to trade below 3 Standard Deviations and does not look like it wants to slow down. Just remember that moves like this have a tendency to snap back very sharply. Caution should be observed either way.
For an upmove to restart we would like to see an early break and close past 12543 reaching 12625. once this occurs we could see some initial resistance near 12763.
For the down move to continue we would like to see 12543 hold as a strong level of resistance. This could then lead to a further breakdown in the EUR leading it down towards 12375. Once this level is broken we could see 12262
GBP.USD – 15962 ( – 278 or – 1.71% )
Down, Down, Down.
For the GBP to move higher we would like to see a solid start to the week breaking and closing past 15986 with a long up bar. Once this occurs then the GBP could get back above 16000 reaching 16102 and 16148. If the upward momentum is strong then we could see 16246 again.
Another leg lower and the GBP could quickly see 15844 and 15723 respectively. If the down move is strong then we would like to see a long bar break past 15723 before reaching 15681 and possibly extending towards 15522.
USD.JPY – 10978 ( + 51 or + 0.47% )
After its rest we saw the USD take a sharp leg down against the YEN, but then seemed to bounce back quickly pegging back all its losses to close up for the week. As it has only closed slightly higher our comments remain the same with slight amendments
For the USD to move higher we would like to see 10914 become a strong level of support before a strong push past 10998 and popping its head above 110 is made. Once this level is reached we could see 110.68.
If the down move restarts we would like to see an early break and close back past 10836 before reaching 10683. If this level is also broken then we could see 10541 provide some support.
COMMODITIES
GOLD – 1191 ( – 27 or – 2.22% )
With USD strength all over, GOLD is taking a hit and is now getting close to the lows of June 2013 and Dec 2013 of 1180 and 1182 respectively. One of the traders found this interesting view on GOLD, we think its a great video that all traders should watch https://www.youtube.com/watch?v=ImqxhaPyLEo
For the upward move to restart we would like to see GOLD back above 1200 before reaching 1215. Once again 1215 will need to hold as a strong level of support before an early break back past 1230 occurs, this would then allow for a solid break back above 1241 also breaking through 1252.
If a down move continues and continues strong then a solid break and close past the lows of June 2013 and Dec 2013 of 1180 and 1182 respectively could lead to a FREE FALL. If this occurs we will then be monitoring the following levels depending on the strength of the move: 1167, 1149, 1103 and possible over-extension 1091.
US LIGHT CRUDE OIL – 8968 ( – 368 or – 3.94% )
Supply high, demand low – OIL goes down. That is what I learn at school. It looks like the markets are starting to go back to basics.
For the upmove to restart we would like to see OIL get back above $90 by reaching 9067. once this occurs we could see 9148 reached. 9148 will then need to be broken with a long up bar reaching 9237. The momentum would need to continue the same before reaching 9367.
If OIL continues lower then we would like to see solid breaks past 8884 followed by 8750 before the real test comes. First will be the April 2014 Lows near 8551 and then if this is breached we could see the Nov 2013 lows near 8395 tested.
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