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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes. For up to the minute market analysis see our live trading room.
INDICES
AUSTRALASIA
ASX – 6446 ( +239 or +3.85% )
The ASX continues its stellar run but has it run out of steam?
VOLATILITY ALERTS:
Mon 19:40 – RBA Governor Lowe Speaks
Tue 11:30 – Monetary Policy Meeting Minutes
Wed 09:00 – RBA Gov Lowe Speaks
Thu 11:30 – Unemployment Rate
For a continued move higher we must now see the ASX hold above 6435. Should this occur, we will look for a test of 6500, and above this 6550. If momentum to the upside is very strong we cannot rule out a move to 6670.
If the ASX cannot hold above 6435, we will look for a move back down to 6350 for strong support. A strong break and close below this level however could see the ASX retest 6276, and if downside momentum is very strong, we could see a move down to 6180.
EUROPE
DAX – 13118 ( +637 or +5.1% )
The DAX yet again posted a very strong week as this market continues to test its key resistance area.
VOLATILITY ALERTS:
Mon 20:00 – ECB Financial Stability Review
Tue 12:00 – ECB President Lagarde Speaks
Fri 02:00 – ECB President Lagarde Speaks
Fri 19:15 – ECB President Lagarde Speaks
For a continued move to the upside we must now see the DAX hold above 13050. Should this occur, we will look for a strong move back up into 13266, and if momentum remains strong a push back higher into 13520.
If the DAX fails to hold above 13050, we may see a retest back down into the key level of 12714. A close below this level is likely to see a retest of 12566; however if momentum is very strong to the downside we cannot rule out a move to 12266.
US
SP500 – 3586 ( +70 or +1.99% )
The S&P managed to post yet another up week but does the recent fundamental data suggest topping signs?. We will be discussing the impact of this this week in the MEMBER PORTAL this week.
VOLATILITY ALERTS:
Wed 00:30 – Retail Sales (monthly)
Fri 00:30 – Philly FED manufacturing Index
For a move higher we would like to see the S&P hold above 3560. Should this occur, we will look for a move higher into 3620. A strong break above this level however sets the stage for a move higher into 3650; and if momentum is very strong we cannot rule out a move to 3733.
If we cannot hold above 3560, we could see this market move lower into 3498. A break of this level however may result in a quick move down to 3395; and if momentum to the downside remains strong we may see a fast move down to 3300 and 3274.
FOREX
AUD/USD – 0.7268 ( +8 or +0.11% )
The Aussie Dollar managed to recover towards the end of the week having finished slightly higher for the week.
VOLATILITY ALERTS:
Mon 19:40 – RBA Governor Lowe Speaks
Tue 11:30 – Monetary Policy Meeting Minutes
Wed 09:00 – RBA Gov Lowe Speaks
Thu 11:30 – Unemployment Rate
For a move higher, we would first like to see the AUD close above 0.7282. Should this occur we will look for a move into 0.7364, and if upside momentum remains very strong we cannot rule out a move to 0.7447 and 0.7489 before a pause.
If the AUD cannot close above 0.7282, we will look for this market to break lower through 0.7197. A break and close below this level could see a sharp decline into 0.7112; and if momentum to the downside remains strong we cannot rule out a move into 0.7014.
EUR/USD – 1.1832 ( -43 or -0.36% )
The Euro was also relatively muted with the market essentially remaining flat for most of the week.
VOLATILITY ALERTS:
Mon 20:00 – ECB Financial Stability Review
Tue 12:00 – ECB President Lagarde Speaks
Fri 02:00 – ECB President Lagarde Speaks
Fri 19:15 – ECB President Lagarde Speaks
For a move higher we would like to see the EURO close above 1.1834. Should this occur we could see a retest of 1.1925. A break of this level could see this market rally further to 1.1950; and if momentum is very strong, 1.2042 cannot be ruled out.
If the EURO cannot close above 1.1834, we could see a fast move down into 1.1738 before a pause. A strong break of this level may result in a move into 1.1678, however any weakness below this level could see a sharp drop into 1.1613 and 1.1553.
GBP/USD – 1.3199 ( +50 or +0.38% )
Cable remains range bound however is edging higher as we now look towards a renewed round of Brexit news.
VOLATILITY ALERTS:
Wed 01:00 – BoE Gov Bailey Speaks
Fri 18:00 – Retail Sales (monthly)
For a continued move to the upside, we would like to see Cable hold above 1.3161, followed by a retest into 1.3277 before a pause. If however momentum is very strong we may see a strong push into 1.3410.
Should we fail to hold above 1.3161, we could see a move back down to 1.3035. A break below this level however could see Cable further depreciate to 1.2867 by the week’s end and if momentum is very week we cannot rule out a move to 1.2720.
USD/JPY – 104.61 ( +125 or +1.21% )
The $/Yen managed to recover this week with a healthy 1% gain. However despite this we are seeing continued pressure from sellers.
For a move to the upside we must now see this market hold above 103.80. Should this occur we will look for a push into 105.50, and if momentum is very strong we cannot rule out a move higher to 106.92.
If we cannot hold above 103.80, we could see another move back down into 103.21. A break below this level may result in further downside to 102.80; and any further breaks to the downside may trigger a bigger move into 100.65.
COMMODITIES
GOLD – 1889 ( -62 or -3.18% )
Gold was significantly lower last week following Monday’s news and we will look to see whether this market can recover this week. We will be discussing this market this week in the MEMBER PORTAL.
For a continued move higher we must now see this market hold above 1871. Should this occur we would then need to see a strong break back above through 1900. Should this occur we could see further upside into 1920and 1950.
If Gold cannot hold above 1871, we will look for a move back down to 1850. A break below this level could see a move lower into 1830; and if momentum is very strong to the downside we could see a move to 1800 and 1786.
