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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6795 ( +73 or +1.09% )
The ASX was slightly higher last week however remains in a very tight sideways range. We will be discussing this in our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Wed 09:00 – RBA Governor Lowe Speaks
For a continued move higher we must now see the ASX hold above 6682. Should this occur, we will look for a move into 6804, and if momentum to the upside is very strong we cannot rule out a move to 6850 and 6960.
If the ASX cannot hold above 6682, we will look for a move back down to 6550. A strong break and close below this level however could see the ASX retest of 6500, and if downside momentum is very strong, we could see a move down to 6435.
EUROPE
DAX – 14051 ( +266 or +1.93% )
The DAX continues to remain in its large sideways consolidation and we are on high alert for a breakout move now heading into an important week.
VOLATILITY ALERTS:
Thu 23:45 – ECB Interest Rate Announcement
Fri 00:30 – ECB Press Conference
For a continued move to the upside we must now see the DAX hold above 13800. Should this occur, we will look for a strong move up into 14210, and if momentum remains strong a push back higher into 14450.
If the DAX fails to hold above 13800, we may see a retest back down into the key level of 13050. A close below this level is likely to see a retest of 13520; however if momentum is very strong to the downside we cannot rule out a move to 13266.
US
SP500 – 3842 ( +31 or +0.81% )
he high volatility in the S&P continues with a big reversal day and rally into the week’s close. But is this the bottom or just a short squeeze? We will be discussing this in our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Thu 00:30 – CPI (monthly)
For a move higher we would like to see the S&P hold above 3780. Should this occur, we will look for a move to 3850; and if momentum is very strong we cannot rule out moves back up to 3900 and 3950.
If we cannot hold above 3780, we could see this market move lower into 3733. A break of this level however may result in a quick move down to 3694; and if momentum to the downside remains strong we may see a fast move down to 3655.
FOREX
AUD/USD – 0.7679 ( -27 or -0.35% )
Despite rallying early in the week, the Aussie Dollar closed poorly and is set for lower prices come next week.
VOLATILITY ALERTS:
Wed 09:00 – RBA Governor Lowe Speaks
For a move higher, we would first like to see the AUD hold above 0.7662. Should this occur we will look for a move into 0.7750, and if upside momentum remains very strong we cannot rule out a move to 0.7823 and 0.7997 before a pause.
If the AUD cannot hold above 0.7662, we will look for this market to break lower through 0.7617. A break and close below this level could see a sharp decline into 0.7550; and if momentum to the downside remains strong we cannot rule out a move into 0.7489.
EUR/USD – 1.2073 ( -44 or -0.36% )
The Euro was also weak last week following the strength we saw in the $US. Does Christine Lagarde and the ECB have something to say about the relative weakness in the Euro since the last meeting? We will be discussing this in our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Thu 23:45 – ECB Interest Rate Announcement
Fri 00:30 – ECB Press Conference
For a move higher we would like to see the EURO hold 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 hold 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 – 1.3824 ( -103 or -0.74% )
Cable has now closed back below 1.4000 for the 2nd consecutive week and like the Euro, has an important week coming up.
VOLATILITY ALERTS:
Mon 21:00 – BoE Governor Bailey Speaks
For a move to the upside now, we would like to see Cable close above 1.3875, before a break higher through 1.4041. If this market can hold above this level we may then see a strong push into 1.4120 before another pause. A break through this level sets Cable up for a move up to 1.4250.
Should we fail to close above 1.3875, we will look for a move down to 1.3743. A break below this level however could see Cable further depreciate to 1.3534 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3410.
USD/JPY – 108.39 ( +186 or +1.75% )
The $/YEN was the start performer last week as the strong rally continues off the back of $US strength.
For a move to the upside we must now see this market hold above 108.31. Should this occur we will look for a retest of 109.21, and if momentum is very strong we could see a move higher into 109.94 and potentially 111.73.
If we cannot hold above 108.31, we could see a move lower into 106.52 before a pause to the downside. A break below this level may result in a sharp move lower into 105.50; and any further breaks to the downside may see a bigger move into 104.97.
COMMODITIES
GOLD – 1734 ( -49 or -2.75% )
Gold continues to drift lower having broken all previous support levels and is now at the big 1700 level. We will discuss this market in detail in the LIVE CHAT ROOM.
For a continued move higher we must now see this market hold above 1700. Should this occur we could see a retest of 1755; and any break of this level could see a stronger move into 1786.
If Gold cannot hold above 1700, we will look for a move back down to 1687. A break below this level could see a move lower into 1674, and if momentum is very strong to the downside we could see a move to 1648.
