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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5697 ( +39 or +0.69% )
Last week we saw the pause to the downside move discussed, and now the question remains: will the ASX continue higher or is it up against some short-term selling? We will be discussing this in our MEMBER PORTAL.
VOLATILITY ALERT: Trade Balance on Thursday.
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 5705, 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 – 11803 ( +187 or +1.61% )
Wednesday saw the DAX finally break out of its sideways consolidation move, and we may potentially see another consolidation following this breakout.
VOLATILITY ALERT: Prelim CPI on Monday, Retail Sales, Unemployment and Draghi speaks on Tuesday.
For a continued move to the upside we must see the DAX hold firmly above the 11755 – 11790 area. Should this occur, we will look for a retest 11875. If momentum is very strong, a break and close above this level could see another push higher into 12054.
If we fail to hold above 11755, we will look for a move back down to 11592; and if there is a complete reversal of the breakout, a strong move down to 11340 cannot be ruled out.
US
SP500 – 2293 ( +22 or +0.97% )
We have been watching this market very closely and for two consecutive weeks said GET READY! Last week’s breakout was confirmed across most other US markets, but the question remains: Is this breakout going to continue? We will be discussing this in the LIVE CHAT ROOM this week.
VOLATILITY ALERT: CB Consumer Confidence on Tuesday, FOMC Cash Rate and Statement on Wednesday, NFP on Friday.
NOTE: We will be covering the FOMC Announcement on Wednesday in Live TV.
For a move higher we would like to see a the S&P hold above 2292. Should this occur we will be looking for a retest of 2304. A break above this level could see a move to 2312, and if momentum is strong a move to 2334 cannot be ruled out.
If we cannot hold above 2292, we may likely see a move down to 2270. A break and close below this level could see the S&P move lower into 2256, and if the selling is very strong we may potentially see a move back down into 2234.
FOREX
AUD/USD – 0.7553 ( -12 or -0.16% )
The Australian Dollar remained range bound for the majority of last week a battle between buyers and sellers ensued all week, before the AUD finished 12 points lower.
VOLATILITY ALERT: Trade Balance on Thursday.
For a move higher we would like to see the AUD close above 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 0.7561, we will look for a move down to 0.7489. A close below this level is likely to see the AUD retest 0.7447, and if momentum remains strong to the downside we will look for a move to 0.7364.
EUR/USD – 1.0694 ( -3 or -0.03% )
The EURO was practically unchanged last week and as such our levels remain unchanged. We are anticipating some volatility in the EURO this week so BE PREPARED!
VOLATILITY ALERT: German Prelim CPI on Monday, German Retail Sales, Unemployment numbers, EURO region Flash CPI and GDP on Tuesday, Draghi speaks again on Thursday.
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 – 1.2547 ( +173 or +1.4% )
Cable continues to edge its way higher and like the EURO- we are watching for continued volatility this week.
VOLATILITY ALERT: Manufacturing PMI on Wednesday, Construction PMI, BoE Cash rate and Carney speaks on Thursday.
NOTE: We will be covering the BoE Cash rate on Thursday in Live TV.
For a move to the upside we would like to this market hold above 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 is still very possible.
On the downside we continue to watch two key areas at 1.2404, 1.2297 and 1.2100. As previous- the downside may be swift and sharp.
USD/JPY – 115.08 ( +46 or +0.4% )
The $/YEN continues to bounce in and out of our levels, and the move off the double is setting up for a stronger move higher. We will be discussing this market in more detail in the LIVE CHAT ROOM this week.
VOLATILITY ALERT: Annual Household spending and BoJ Cash rate on Tuesday.
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 – 1191 ( -18 or -1.49% )
GOLD has sold off our key level at 1218, and we are watching this market closely to see if a retest of this high is around the corner; or if there is more downside due.
For a continued move higher we want to see a strong break above 1206, 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 break back 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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