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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.
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Trade View has entered the weekend Net Long.
AUSTRALASIA
ASX – 5527 ( – 32 or – 0.58% )
The ASX gapped down heavy early in the week, then we saw a strong rally back up to fill the Gap. Friday came and Greece worries surfaced as trades decided to reduce exposure over the weekend and the ASX closed slightly lower.
For the upmove to restart we need to see 5541 broken early in the week reaching 5595. Once this level is broken then we would like to see a strong long up bar break and close above 5636 before pushing towards 5715 and then 5754. Once these levels are broken we could see the ASX reach 5789 which would complete the range.
If the ASX finds it difficult to break back above 5541 then the downward move could continue if we see an early break past 5505. Once this is broken the ASX will could find support near the area between 5463 – 44 again. If the world markets take a leg down then we could see the ASX extend towards 5367.
EUROPE
DAX – 11116 ( – 416 or – 3.61% )
De-ja Vue:
Another wild ride for the DAX traders last week with a 500+ point GAP down.
The Greek people have now voted ‘NO’
Expect more Volatility this week. Therefore we will provide some outrageous extensions both on the long and short side.
For the upmove to restart we would like to see a strong break above 11162. Once this level is broken the DAX will need to close back up above the area between 11227 – 92. This could lead the DAX towards 11373. This will then fill the GAP and could possibly reach 11537 very quickly extending towards 11621. If the Greek situation is sorted expect the DAX near 11868.
If the downside prevails then the levels we will be watching closely (depending on momentum) will be 10939, 10869, 10793, 10683 with a possible extension down towards 10473.
US
S&P – 2074 ( – 30 or – 1.43% )
Like all other markets the S&P Gapped down and then recovered slightly.
Markets need clarity and when the Greek situation is resolved (one way or another) then the true direction will start forming.
If the upward move is to restart we need to see a strong up bar break through 2085 before seeing 2101 again. If the momentum is strong and we continue to see the move higher then as always the two important levels of 2112 and 2126 come back into play.
If the S&P cannot get back above 2100 early this week and fill the GAP then a break back down past the area between 2050 – 46 could see 2033 and 2024 very quickly. If the downside momentum is strong then 2010 will not be far away .
FOREX
AUD.USD – 7505 ( – 149 or – 1.95% )
And …. we have a break…… down. As mentioned previously if a break occurs it would be a strong move. The AUDUSD reached a low of 7503 which was only 5 points higher than our range target level of 7498. (This is a perfect example of when we say ‘Long down bar break’)
For the upmove to restart we would like to see a strong move back up again early in the week reaching 7635 before moving towards 7718 again. If the upward momentum maintains then 7778 could be seen.
For the downside move to continue a strong break past 7498 is need early in the week before reaching 7407. Once this level is broken we could see the AUD near 7263.
EUR.USD – 11114 ( – 49 or – 0.44% )
Last week we said “Expect the unexpected this week with the EUR pairs.” and we did not have to wait long as we saw a 158 point GAP followed by a 324 point range day, all on Monday. Who said trading on Monday wasn’t exciting?
If the EUR is to move back up again we would like to see a solid break past 11166 before pushing back past 11315 and finally reaching 11396 again. We will then like to see a strong long up bar break through this level if we are going to reach 11471.
If the downside move plays out then a clean break past 11038 will see the EUR back down near 10941 and 10899. If these levels are broken with a long down bar then 10780 could be seen quickly and possibly extending to 10590.
GBP.USD – 15564 ( – 181 or – 1.15% )
The GBP continued to fall away last week not being able to break back up above our FICM level of 15744.
For the GBP to restart its run higher we would like to see early breaks past 15591 and 15644 before another attempt at reaching and breaking through 15744 is made. Once this occurs then 15744 must become a solid level of support before the GBP can reach 15834 and potentially extend towards 16030.
For the down move to continue we would like to see 15549 broken early with a long down bar reaching another one of our FICM levels of 15458. For the downside move to continue then this level needs to broken with a long down bar as well. If this is achieved then 15366 could be seen.
USD.JPY – 12274 ( – 114 or – 0.92% )
Last week was a confusing one for this pair as one day everything is fine with the US and Interest rate rises are on the cards (so it wants to go up) the next day the world is going to end because Greece might leave the Euro (so traders flock to safety in the Yen [which is a doomed currency itself]).
All I can say is “get ready for another CHF style debacle”.
For the USD to continue its longer term rally we need to see a strong up bar break through the area between 12324 – 46 before reaching 12403. if the momentum continues strong then 12464 could be seen.
COMMODITIES
GOLD – 1168 ( – 7 or – 0.60% )
“People just don’t love GOLD anymore” The world is fine and there is no chance of inflation
Our comments remain the same
For the upward move to continue we would like to see an early break past 1177 – 80 before pushing back towards 1192 and possibly 1208.
For the down move to restart and continue the area between 1180 – 78 needs to become a solid level of resistance before GOLD reaches 1167 and finally 1161 again. If we see continued downward momentum then 1149 will not be far away.
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