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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.
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We may take multiple trades throughout the week. Currently Trade View is Light Net Short.
AUSTRALASIA
ASX – 5167
After reaching a low of 5128 the ASX moved sideways bouncing off two important FICM levels 5144 and 5200. Therefore our comments this week will remain the same as last week with slight amendments midrange on the upside. One thing to note is potential divergence forming.
For a rebound to occur and the ASX starts to move higher we would like to see a push past 5200 area once again with long solid up bars. This could then see 5233 – 52 area reached. Once this area is also broken then we could see 5338 and then test 5367 once more.
For us to see a continuation of this downward momentum we would like a clear break past 5144 – 25 area. If this is achieved with long solid down bars then we could see 5054 reached and if the momentum continues then 4983 could be the next level tested.
EUROPE
FTSE – 6493
Once again the FTSE found it difficult to hold any levels as it moved lower reaching a low of 6419 which fell within our range of 6433 – 6395 mentioned in last weeks brief.
For the FTSE to restart an up move then we would like to see the area between 6433 – 6395 hold as a solid level of support. Otherwise if we see a bounce from here we would like to see 6520 broken early in the week followed by another strong break past 6585. This could then lead the FTSE towards 6656 where it will need to break this level with long bars before we see 6734 again.
For the down move to continue on from last week we would like to see an early break with strong long down bars through 6433 – 6395 as FICM our primary model is showing potential levels of support. If this is achieved then we could see 6358 reached first. Once this level is broken then we will be monitoring the FTSE near 6225. Once this occurs we will discuss this in our member area.
DAX – 9287
The DAX found it tough going last week again after trying to push higher midweek found itself pushed back down to a low of 9162 but was then able to bounce 100+ points to close just below 9300. We will be watching the DAX very closely over the next few weeks as there might be some Volatility coming into the markets soon.
For the DAX to push higher from these levels then we would like to see a solid start to the week where the DAX reaches 9392. Once this is achieved then we would like to see a strong break and move towards 9466. If the momentum continues then we could see 9588 and depending on how soon this is reached we will revise accordingly.
If the DAX has just started its down move and we see a continuation then we would like to see an early break past 9271 which could see 9114 reached. Our primary model FICM is then showing 3 levels of potential support 9113, 9000 and 8959. These levels will be watched closely as if they are broken with solid long down bars then we could see 8533 reached.
US
S&P – 1782
The S&P had a sideways move last week with a 40 point range from its lows to highs closing only 4 points lower. Therefore our comments from last week remain the same.
For the S&P to restart its push higher from last weeks heavy hit than we would like to see solid break early in the week and with strong momentum past 1805. Once this occurs then we need to see a break and close above 1815 – 20 area. Once this is achieved then 1848 – 50 could once again be tested.
If we are to see a continuance of last weeks down move than we would like to see a solid break past 1777 early this week followed by a break and close past 1760. Once this occurs then 1740 – 29 area could be next to fall leading the way towards 1707 which could provide potential support. If not the 1600 here we come.
FOREX
AUD.USD – 8752
The AUD is not doing much at the moment as the market is trying to work waiting for the RBA to make further decisions before a direction is found.
For a new up move to start we would like to see a break past 8774 followed by a solid break past 8893 – 8924 area.
If we see the AUD back inside the long term Standard Deviation Channel and the down move continues then we would like to see a break past 8582 before reaching 8530. If the downward momentum is still strong then we could see 8454 reached.
EUR.USD – 13485
The EUR fell away last week even after it was mentioned that the Eurozone is recovering. One thing is clear and that is the money markets are struggling to understand the true impact of the FED unwinding.
If the EUR is to continue higher we would like to see a break back above 13515 early in the week followed by a strong break past 13594. Once this is achieved we could see 13650 reached.
If the USD continues to find strength again this week and the EUR moves lower then we would like to see 13432 broken early followed by a break past 13396. If this occurs then 13337 could be the next level tested and if broken then 13223 could be reached. If no support is found here then we could see temporary support near 13176 – 65.
GBP.USD – 16434
The GBP started the week with a bounce but then faded during the later stages and closed only 40 points lower.
If the GBP repeats last weeks behaviour and does bounce early in the week then we would like to see 16489 broken which could lead the pair towards 16534. If this level is then broken with strong momentum then we will be watching the 16603 closely and if reached and broken then we could see 16708.
If the GBP is in the process of forming a larger down move then we would like to see 16332 broken which could then lead to 16224. If this level is then broken we could see 16169 and finally some support might be found near 16072.
USD.JPY – 10193
The USD tried to rally early last week but once again as the equity markets fell so did the USD against the JPY. The interesting thing about this is that the JPY again seems to be a safe haven play. We will continue to watch this pair for possible further sharp moves.
If the USD finds strength this week then we would like to see 10250 broken early with a long solid up bar before reaching 10329 – 60 area. Once reached we will be looking for a solid break and close past this area before the pair reaches 10429.
If the equity markets continue to move lower and the JPY continues to be the safe haven of choice then a solid break past 10150 could see the pair near 10078 – 52 area very quickly and possibly a dip below 100 level reaching 9978.
COMMODITIES
GOLD – 1244
Once again we see GOLD finding it difficult to create a strong sustained rally as it moved lower by about 20 points. Our comments from last week remain the same “Remember GOLD is a physical item which can be purchased and when financial money systems break down where else can you put your money? Under your pillow?”
For GOLD to move higher from theses levels we would like to see 1255 broken early in the week followed by a strong push through both 1268 and 1282 with a long solid up bar. Once this occurs than 1320 and 1351 could be the next possible targets.
If GOLD finds it difficult to break past 1269 – 82 area and the long term down move restarts then we would like to see a break past 1231 – 27 area could see 1212. Once this occurs we will revise.
US LIGHT CRUDE OIL – 9745
OIL again moved higher reaching a high of 9857 before settling on one of FICM’s levels of 9745.
For OIL to continue its move higher then we would like to see 9745 hold as a strong level of support before we see a 9803. If the upward momentum continues strong then a break past 9803 could lead OIL back to 9935 and then onto 9991 which would complete the range set in Nov – Dec 2013.
If we see OIL push back below 9696 – 9745 and this area becomes a solid level of resistance then we would like to see 9624 broken early in the week with long down bars. This could then lead OIL to reach 9561. Once this level is broken then we will watch for potential support near 9470 – 55 and if it is not found then 9346 could play that role.
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