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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.
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INDICES
AUSTRALASIA
ASX – 5510 ( +150 or +2.8% )
Last week we mentioned the ASX was ‘poised to move higher’ and that’s exactly what we’ve seen.
VOLATILITY ALERT: Building Approvals on Wednesday, Private Capex on Thursday, Retail Sales on Friday.
For a continued move to the upside we would like to see this market break above 5521. Should this occur, we will look for a move higher into 5550. If the ASX can break and close strongly above 5550, we will look for a move to 5589. A strong close above this level may see the ASX rally to 5651 by the end of the week.
If we fail to break above 5521, we will look for a move back down to 5437. A break below this could result in a move back down into 5373. Further breaks to the downside could see the ASX fall aggressively back down to 5294 and the important 5248-5238 area.
EUROPE
DAX – 10700 ( -37 or 0.35% )
The DAX is really trying to break higher and has been holding steady at these levels for many weeks now. Will we see a break higher this week? We will discuss this market in more detail throughout the week in our MEMBER PORTAL.
VOLATILITY ALERT: Draghi speaks on Monday (and Wednesday), Prelim CPI on Tuesday, Retail Sales on Wednesday.
For a continued move to the upside we would like to see the DAX hold above above 10585 – 10601, followed by a break above 10749. Should this occur, we may see another push higher into 10863. Further breaks of this level could see the DAX rally 10983 and if the move is very strong, 11060 cannot be ruled out.
If we fail to hold above 10601, we will look for a move back down to 10475 and should there be further downside, we could see a move lower to 10382. Should momentum remain very strong, we will look for a move down to 10158.
US
SP500 – 2213 ( +31 or +1.42% )
The S&P500 continues to rally and is now sitting just above one of our key levels at 2212. Will we see a strong finish into the close of the month?
VOLATILITY ALERT: Prelim Quarterly GDP on Tuesday, ISM Manufacturing PMI on Thursday, NFP on Friday.
We will be covering the NFP Live in our LIVE TV.
For a move higher we must now see the S&P hold above 2212. Should this occur we will look for a move into 2220. A strong break and close above 2222 could see the S&P rally quickly to 2234 before a pause. This is the next big level we are watching. Keep in mind this market is at all-time highs so much higher levels are likely.
If we cannot hold above 2212, we will watch for this market to retest 2194. A strong break and close below 2194 could see this market retest 2176 before the week’s end; and if momentum to the downside is very strong we cannot rule out a move down to 2160.
FOREX
AUD/USD – 0.7437 ( +102 or -1.39% )
After some aggressive selling, we mentioned a potential AUD bounce in the MEMBER PORTAL last week and we have now seen this.
VOLATILITY ALERT: Building Approvals, Private Capex on Thursday, Retail Sales on Friday.
For a move higher we would like to see the AUD break above 0.7447, followed by a break and close above 0.7489. A strong break and close above this level could see a quick move to 0.7561 before a pause; and if momentum remains strong we will look for a move into 0.7617.
If we cannot break above 0.7447, we will look for a move back down to 0.7364. A strong break below this level may result in a move back down into 0.7282 before another potential pause. Any subsequent breaks of this level however may result in a very fast move down to 0.7229.
EUR/USD – 1.0599 ( +12 or +0.11% )
The EURO finished the week only 12 points higher and as such our levels remain unchanged.
VOLATILITY ALERT: Draghi speaks on Monday (and Wednesday), Prelim CPI on Tuesday, Retail Sales on Wednesday.
For a sustained move higher we would now like to see a strong break and close above 1.0631. If we can close above this level we will look for a move back into 1.0738, and should momentum remain strong we will be watching the key area between 1.0977 – 1.1000.
If we cannot close above 1.0738, we could see continued chop back and forth around the 1.0631 level. However should we remain below this level, our next level down is 1.0525. A strong break below that could see 1.0462 very quickly, and if momentum is strong we cannot rule out a move to 1.0424.
GBP/USD – 1.2461 ( +122 or +0.99% )
Cable continues to consolidate with another gradual move higher. We may see some volatility this week with important data being released.
VOLATILITY ALERT: Bank Stress Test Results and BoE Financial Stability Report on Wednesday, Manufacturing PMI on Thursday, Construction PMI on Friday.
For a continued move to the upside, we would like to see Cable remain above 1.2458. A strong break through this level could see the GBP/USD trade to 1.2720, and should momentum remain very strong we will continue to look for a move to 1.2853.
On the downside, should we break and close strongly below 1.2458, we could see the GBP/USD trade down into 1.2297. A strong break and close below this level may result in a move to 1.2159, and if momentum is very strong we will look for a move back down to 1.2090.
USD/JPY – 113.02 ( +211 or +1.9% )
The USD/JPY continued its stellar move to the upside last week, coming right into our 113.87 level! We will be discussing this move and what this means for the USD/JPY going forward in our MEMBER PORTAL this week.
VOLATILITY ALERT: Household spending on Tuesday.
For a continued move to the upside we would like to see the market break above 113.87, immediately followed by a close above 114.08. Should this occur we could see a strong move into 115.54. If we can break above this level, we could see another push higher into 116.08 before a pause.
If however the USD/JPY cannot close above 113.87, we will look for a move back down to 111.73. A strong break below this level could see the USD/JPY trade quickly down to 111.09 again before a potential pause. Should the move to the downside remain strong, we could see a move down to 109.94.
COMMODITIES
GOLD – 1184 ( -24 or -1.99% )
GOLD continues to be sold off under increasing pressure from the $USD rallying. Members in our LIVE CHAT ROOM can see this in more detail.
For a continued move higher we would like to see GOLD hold above 1170, followed by a retest of 1206. A strong break and close above this level could see Gold trade back to 1222, and should we break this level we could see a very strong move to 1247.
If Gold cannot hold above 1170, a strong break and close below this level could see a fast move down to 1146 before a pause. If we continue to break lower, we could see a very sharp move down to 1126 before the week’s end.
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