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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5658 ( -82 or -1.43% )
Last week we saw the ASX continue to sell-off. Will we see a pause and potential reversal of this move this week? We will be discussing potential breakout moves in our MEMBER PORTAL.
VOLATILITY ALERT: Quarterly CPI on Wednesday.
NOTE: Thursday is a holiday due to Australia Day.
For a continued move higher we would like to see the ASX break and close above 5705, followed by a break above 5746. A strong break through this level could see the ASX move into 5777, and should we close strongly above this 5777 we will look for a move to 5823. If momentum remains strong our upside target of 5875 cannot be ruled out.
If we cannot break and close above 5704, we may see a continued move down to 5589. Should the ASX fail to hold this level we could see further pressure to the downside with a move to 5521 and 5504 respectively.
EUROPE
DAX – 11616 ( -1 or -0.01% )
The DAX continues to be confined to a very small range and finished last week where it started. As such our comments from last week remain the same.
VOLATILITY ALERT: German Manufacturing PMI on Tuesday, Ifo Business Climate on Wednesday.
For a continued move to the upside we must see the DAX hold firmly above 11592. A close above this level may likely see the DAX push into the key 11755 – 11790 area. Should we break through these levels, we may see another leg higher into 11875, and a break and close above this level could see a very strong move to 12054.
If we fail to hold above 11592, we will look for a move back down to 11340. Below this, the DAX is at risk of selling off back down to 11050.
US
SP500 – 2277 ( -6 or -0.26% )
Like the DAX, the continues its S&P sideways path and as we mentioned last week, we are anticipating a breakout very soon. GET READY!
VOLATILITY ALERT: Quarterly Advanced GDP on Friday.
For a move higher we would like to see a the S&P hold above 2270. Should this occur we will look for a move to 2292. A strong break and close above this level could see the S&P at 2312 by the end of the week.
If we cannot hold above 2270, we may likely see a move down to 2256. A break and close below this level could see the S&P retrace down into 2234, and should momentum on the downside remain strong 2212 is the next level lower we are watching.
FOREX
AUD/USD – 0.7557 ( +57 or +0.76% )
Last week we saw a continued move to the upside. Is this pausing to gather more momentum, or could we see a reversal this week? We will be discussing this market in more detail in our LIVE CHAT ROOM.
VOLATILITY ALERT: Quarterly CPI on Wednesday.
For a move higher we would like to see the AUD hold above 0.7489 this week, and break and close strongly above 0.7561. A close above this level could see a strong move to into 0.7617, followed by a move into 0.7677 before another pause.
If we cannot hold above 0.7489, we will look for a move back down to 7447. If momentum remains strong to the downside, a move into 0.7364 is possible. Should this market take a turn for the worse and downside momentum is very strong, 0.7282 cannot be ruled out by the week’s end.
EUR/USD – 1.0697 ( +58 or +0.55% )
This week is relatively quiet on the news front. The EURO has been very quiet so we must anticipate that anytime now things will get moving.
VOLATILITY ALERT: Euro region PMI numbers on Tuesday.
For a sustained move higher we would now like to see this market hold above 1.0631. If we can hold 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 1.0814.
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 – 1.2374 ( +178 or +1.46% )
Cable has another ‘event’ that markets will be watching and that comes on Tuesday- with the Supreme Court ruling on whether Brexit can be triggered without parliamentary approval.
VOLATILITY ALERT: Supreme Court BREXIT ruling on Tuesday.
We will be covering this event exclusively in our LIVE CHAT ROOM.
For a move to the upside to begin, we would like to this market hold above 1.2297. Should we remain above this level we continue to look for a move back up into 1.2480. A strong break and close above this level should see a retest of 1.2622, and if momentum remains strong a move to 1.2720 becomes very possible.
On the downside nothing has changed- we continue to watch two key areas at 1.2100, 1.2074 and further below between 1.1896 -1.1880.
USD/JPY – 114.62 ( +12 or +0.1% )
Last week we mentioned the $/YEN is now at some very key short term levels as we noticed the YEN bouncing in and out of these levels frequently.
VOLATILITY ALERT: Core CPI on Friday.
For a continued move to the upside we would like to see this market hold above 113.87. Should this occur we will look for a move back up into 115.54. A break above this level could see a strong move into 116.08, and if momentum to the upside remains strong we will look for a move to 117.23.
If we cannot hold above 113.87, this market is at risk of breaking much lower. A strong break and close through 113.87 may likely result in a retest of 112.87 very quickly, and a break below this level could see a sharp move down into 111.73. Should the selling pressure continue, a move down to 111.09 is possible.
COMMODITIES
GOLD – 1209 ( +12 or +1% )
GOLD is also at key levels; and like the AUD we will soon find out if this market is pausing to pick up steam, or if there is an imminent reversal lower.
For a continued move higher we want to see 1206 hold as support, followed by a strong break and close above 1218. This could see a quick move into 1222, and if momentum to the upside is strong we could see a sharp move into 1233.
If Gold cannot hold above 1206, we will look for a move back down to 1187. A break and close below this level we could see Gold trade back down to 1181 quickly, and if momentum remains strong to the downside we cannot rule out moves to 1170 and 1160 by week’s end.
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