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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 Net Short.
AUSTRALASIA
ASX – 5489 ( – 17 or – 0.31% )
The ASX was technically rangebound last week as we saw a move higher early but could not be sustained as a sell off on Friday helped it to close lower by 17 points. Therefore our comments from last week remain the same.
For the up move to continue then we would like to see a break back past 5562 with a long up bar. If the momentum is strong when it breaks through 5562 and the rest of the world markets rally then we could see a further push higher towards 5732. As mentioned previously, this would need to be based on strong momentum.
If the down move restarts then we would like to see an early break back down past 5447 followed by an all important break and close through 5424 with a long solid down bar. Once this level is broken then we could see temporary support near 5367. If this level does not provide support and is broken with a long down bar then 5270 could be seen with a possible extension down to 5201.
EUROPE
FTSE – 6853 ( + 42 or + 0.62% )
The FTSE moved higher again last week breaking through the area of 6848 – 6851 after a few attempts but then fell short in breaking the previous highs by just 14 points to then close slightly lower from the highs.
For the up move to continue we would like to see the area between 6848 – 6851 become a strong level of support. Once this occurs we would like to see a strong upward momentum break past 6878 and possibly 6904. This will then complete the range set back in OCT 2013. Any further moves higher will most likely be dependant on the rest of the world markets also moving higher. Once we see a break higher we will discuss it further in our LIVE CHAT ROOM.
For a down move to restart we would like to see an early break with a long down bar past 6848 followed by a further break and close below 6791. This will then lead the FTSE towards 6723. If the downward momentum is strong and 6723 is broken with a long down bar then 6632 could provide some level of support.
DAX – 9951 ( + 181 or + 1.85% )
Last week saw another big run higher by the DAX closing almost 2% higher. Most of the move was early in the week as the move slowed down from the middle of the week onwards. This week will be a test for the DAX as it is now only 50 points away from reaching the magical 10,000 mark. Does it have enough in the tank to push through it?
For the upmove to continue then the DAX will need to break and close above the magical 10,000 mark. Once this occurs it could settle between 10021 – 75. Any strong break past this area will be discussed in our LIVE CHAT ROOM.
If the down move restarts we would like to see a strong early break and close past 9871 before it reaches 9750. Once 9750 is also broken then further downside moves could continue if 9667 followed by 9527. If this is also broken with strong downward momentum we could the DAX back down near 9402 which was a strong level of support many times over the past few months.
US
S&P – 1922 ( + 22 or + 1.16% )
DEJA VU for the S&P last week as it closed 22 points higher which is the same as the previous week. Now that the S&P is 2 Standard Deviations from the Mean Price and all indicators are weak, can the FED really justify another move higher?
For the S&P to break higher we would like to see 1915 hold as a strong level of support before pushing higher and reaching 1938. As the S&P is creating new highs it is important to understand the dynamics behind the moves at the time and that is why we discuss further breaks in our LIVE CHAT ROOM.
For the down move to start we would like to see an early strong break past 1915 followed by strong downward momentum past 1900 leading towards the 1882 – 76 area.
FOREX
AUD.USD – 9311 ( + 81 or + 0.88% )
The AUD moved higher towards the end of last week after a subdued start. It is still range bound and the 2 FICM levels we are looking for before a significant move occurs are 9203 and 9423.
For the move higher to continue we would like to see 9309 hold as a solid level of support before a move towards 9386 is made. If the upward momentum is strong then 9423 could be seen which will need to be broken before further up moves occur.
If the USD continues to find strength and AUD restarts its short term downward move, we would like to see a strong break and close past 9287 followed by a further break past 9203 and 9176 before reaching the area between 9091 – 78.
EUR.USD – 13632 ( 0 or 0.0% )
A flat week for the EURUSD as this week the spotlight is on Mario Draghi and the ECB who are meeting on the 05th: http://www.ecb.europa.eu/events/calendar/mgcgc/html/index.en.html
Expect Volatility.
For the up move to restart we would like to see an early break past 13655 followed by a push towards 13713. If the upward momentum is strong we could see 13812 reached.
For the EUR to continue last weeks down move then we would like to see an early break past the 13594. Once this occurs we could see the area near 13482 – 72 reached.
GBP.USD – 16753 ( – 77 or – 0.46% )
Another strong weak for the USD against the GBP and other currency pairs.
If the GBP finds a way to restart its move higher then we would like to see a solid break past 16807 followed by a push past the 16845 -64 area before reaching 16902. Once this occurs we could see another test towards 17000.
If the slow and steady down move continues then we would like to see an early break past 16731. If the momentum is strong this could lead the pair to reach 16663. Further breaks past 16663 could see 16582.
USD.JPY – 10177 ( – 14 or – 0.14% )
Once again no real move in this pair as it continues to be range bound. Once again we feel that “If no real market solution is found to the mounting debt for both countries then we could be range bound for a while, either way caution should be taken.”
For the USD to move higher we would like to see an early break past 10216 followed by a strong break above 10252 with a long up bar reaching 10309. If the momentum is strong then we could see an extension towards 10356.
If downward move gains strength we would like to see another strong break and close past 10152 leading the pair to reach 10052. If 10052 is then broken with a long solid down bar we could see 9977.
COMMODITIES
GOLD – 1249 ( – 43 or – 3.33% )
After an uneventful few weeks GOLD took another leg down, falling over 3%. It is obvious that with equity markets continuously forming new highs traders have no need for any safety measures. Is this a good thing? Only if the markets continue higher.
If we are to see any attempt of another up move we would like to see a strong break and close past 1252 early in the week pushing towards 1274. Once this is level is broken we could see 1282.
If the down move continues then we would like to see 1252 hold as a strong level of resistance followed by a strong break and close past the area between 1238 – 30. Once this occurs further falls could occur if 1215 is broken which could lead the metal back down testing the previous lows in Jan 2014 of 1182.
US LIGHT CRUDE OIL – 102.84 ( – 144 or – 1.38% )
OIL was not able to sustain its previous weeks rally as we saw a sideways move early before a push lower in the middle of the week closing down by nearly 1.5%.
For the upmove to continue then we would like to see an early break and close back up past both 103.49 and 104.05. Once this occurs we could see 104.96.
For the down move to continue we would like to see an early break past 102.29 reaching 101.28. Once this occurs and if the downward momentum is strong then we could see OIL’s first level of support near 99.91 – 47.
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