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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6064 ( -0 or -0.00% )
The ASX closed exactly where it opened last week to end the week completely flat.
VOLATILITY ALERTS:
Tue 11:30 – Retail Sales
Tue 11:30 – Trade Balance
Tue 14:30 – RBA Interest Rate Announcement
Thu 11:30 – NAB Quarterly Business Confidence
Thu 20:00 – RBA Governor Lowe Speaks
Fri 11:30 – RBA Monetary Policy Statement
For a continued move higher we must now see the ASX break and close above 6070. Should this occur we will look for this market to re-test 6140, and a break above this level could see a quick move to 6175. A strong break above this level however could see a move into 6250 and 6315 by the week’s end.
If the ASX cannot close above 6070, we will look for a move back down into 6000. A break below this level is likely to see a retest of 5986 and further downside may result in a sharp move lower into 5921.
EUROPE
DAX – 12711 ( -676 or -5.05% )
The DAX was sold off very aggressively last week. Will this continued selling pressure persist this week? We will be discussing this at length in the MEMBER PORTAL.
VOLATILITY ALERTS:
Tue 03:00 – ECB President Draghi Testifies
Thu 19:45 – German Buba President Weidmann Speaks
For a continued move to the upside we must see the DAX hold above 12714. A strong break of this level could see the DAX rally quickly to 12783; and if momentum is very strong we will look for a move to 12921 and the all important 13050 level.
If the DAX fails to hold above 12714, we will look for a move back down to 12566 before another pause. A close below this level however could see the DAX sell-off sharply into 12384 and if momentum is very strong to the downside we cannot rule out a sharp collapse into 12198.
US
SP500 – 2756 ( -117 or -4.07% )
Like other global indices the S&P also took a hit on Friday following weakness across the Asian and European sessions. We will be discussing the impact of this move in the LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Tue 02:00 – ISM Non-Manufacturing PMI
For a move higher we would like to see the S&P hold above 2736. Should this occur we will look for a move back up into 2774. A strong break and close above this level could see a retest of 2800, and if momentum remains strong to the upside 2812 and 2820 cannot be ruled out.
If we cannot hold above 2736, we could see this market continue to sell-off into 2694 before a pause. A break below this level however could mean this market retraces lower into 2677 and 2660 by the week’s end.
FOREX
AUD/USD – 0.7920 ( -186 or -2.29% )
As we go into an important week for the Aussie Dollar, the question now on everyone’s mind is can this market regain the key 80c level? We will be covering this market exclusively in the LIVE CHAT ROOM.
VOLATILITY ALERTS:
Tue 11:30 – Retail Sales
Tue 11:30 – Trade Balance
Tue 14:30 – RBA Interest Rate Announcement
Thu 11:30 – NAB Quarterly Business Confidence
Thu 20:00 – RBA Governor Lowe Speaks
Fri 11:30 – RBA Monetary Policy Statement
For a move higher we must now see this market hold above 0.7903, followed by a strong break and close above 0.7934. Should this occur we will look for this market to test 0.7988. A strong break and close above 0.7988 could see this market post further gains into 0.8034.
If we cannot hold above 0.7903, we could see the AUD retest 0.7833. Should we break lower however, we will look for a move back into 0.7779 and if downside momentum continues we could see 0.7729 quickly before another pause.
EUR/USD – 1.2455 ( +27 or +0.22% )
The Euro continues to test one of our key upper areas between 1.2520 – 1.2460. Can this market break out of this range this week or will we see a reversal here?
VOLATILITY ALERTS:
Tue 03:00 – ECB President Draghi Testifies
Thu 19:45 – German Buba President Weidmann Speaks
For a move higher we would like to see the EURO break and close above the very important 1.2520 level, followed by a strong push into 1.2605 before another pause. Should this occur we could then see a very strong rally into 1.2769.
If the EURO cannot close above 1.2520, we could see a move back down to retest 1.2360. A close below this level is then likely to see a retest of the key level at 1.2268 before a pause. A strong break below this level may result in another move lower into 1.2167 and if momentum is very strong, we cannot rule out a big move lower into 1.2042.
GBP/USD – 1.4115 ( -35 or -0.25% )
Like the EURO, the Pound is also consolidating around our key level of 1.4223, and could be setting up for a strong move off this level this week.
VOLATILITY ALERTS:
Mon 20:30 – Services PMI
Wed 19:30 – Halifax HPI
Thu 23:00 – BoE Interest Rate Announcement
Fri 20:30 – Manufacturing Production
For a move to the upside we would like to see a strong break and close above 1.4259. Should this occur we will look for a move higher into 1.4382. A close above this level is likely to result in a push into 1.4469, and if momentum is very strong we cannot rule out a blow-off move to 1.4630.
On the downside, a strong close below 1.4075 could see the Pound tumble to 1.3875 – 1.3853 before a pause. Should we break this level however, we could see this market fall further into 1.3743 – 1.3725, and potentially lower into 1.3683 and 1.3654.
USD/JPY – 110.17 ( +154 or +1.42% )
The US Dollar and consequently the $/YEN was the biggest beneficiary of last week, having finally found a base and rallied, as we spoke about in our MEMBER PORTAL over the past fortnight.
VOLATILITY ALERTS:
Tue 10:50 – Current Account
For a move to the upside we must now see this market break and close above 110.31, on its way to retesting 111.09. Should this occur we will look for a move into 111.72, and a strong break and close above this level may see the $/YEN rally strongly into 112.68.
If we cannot close above 110.31, we could see a move back down into 109.04. A strong break below this level could see a further move down into 109.21, and momentum is very strong to the downside we may see a sharp move down into 108.31.
COMMODITIES
GOLD – 1332 ( -18 or -1.33% )
Last week Gold continued its drift lower closing just below our long-term level of 1333. This will be the level to watch this week.
For a continued move higher we would like to see this market hold and close strongly above 1333. Should this occur we will look for a strong move into 1355 before another pause. If momentum is very strong, 1375 cannot be ruled out.
If Gold cannot hold above 1333, we will look for a move back down into 1322. A strong break below this level could see GOLD sell off further into 1313, and if momentum is strong to the downside we could see 1303 before the week’s end.
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