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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5471 ( -18 or -0.33% )
The ASX is still range bound with 1 attempt at closing below 5424 with no luck. The bounce back up was quick helping it close slightly lower by 18 points (DE-JA VUE, previous week was 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 – 6876 ( +24 or +0.34% )
The FTSE started the week lower but then found some momentum and broke back above the area of 6848 – 6851 getting ever so close to the previous highs by just 20 points. As we are in a pattern of early down moves followed by late rallies closing not too much higher than the previous week, our comments from last week remain the same.
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 – 10012 ( +61 or + 0.61% )
The DAX has finally reached and closed above 10000. The main helping hand was Mario Draghi. Growth in companies, employment etc, etc, etc – don’t matter anymore.
For the upmove to continue then the DAX will need to break and close above the area 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 9938 followed by 9865 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 – 1950 ( + 28 or + 1.46% )
All time highs for the S&P and Goldman’s June 2015 target of 1950 has been reached. The S&P is now 2.69 Standard Deviations from the Mean Price for 2014. Is this healthy? Not from a statistical point of view.
For the S&P to move higher the momentum needs to remain strong early in the week. The next projected level is 1993. We will however be discussing the moves in our LIVE CHAT ROOM.
For the down move to start we would like to see an early strong break past 1926 – 1915 followed by strong downward momentum past 1900 leading towards the 1882 – 76 area.
FOREX
AUD.USD – 9336 ( + 25 or + 0.27% )
After a slow start and move down, the AUD moved higher again towards the end of last week. It is still range bound and the 2 FICM levels we are looking for before a significant move occurs are 9203 and 9423. Until these 2 key levels are broken our comments from last week remain the same.
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 – 13642 ( + 10 or + 0.07% )
What a wild ride for the EUR last week. Mario Draghi came out and reduced the bank deposit rate to -0.10% to help curb the EUR rally. What does this mean to the general public(man on the street) who are struggling?
Basically if you deposit your funds into a bank then they will charge you:
- This sounds great in theory because then the big players can go out and stimulate the economy by hiring more people and creating new jobs rather than keeping funds in the bank – correct?
- The problem is that the companies that are given this task are not listening, Why?
- As the growth outlook is dim(to say the least), they are spending the funds to make share buy backs and give a better rate of return to the Investor (who is the Investor – the majority of the big players)
- So to conclude the scores are:
Big Players (1) – ECB (0) – Man on the Street (-1)
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 – 16800 ( + 47 or + 0.28% )
After a slow start we saw the GBP rally late to close higher against the USD.
If the GBP makes further moves higher then we would like to see a solid break and close 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 16767 and 16731. If the momentum is strong this could lead the pair to reach 16663. Further breaks past 16663 could see 16582.
USD.JPY – 10249 ( + 72 or + 0.71% )
The USD rallied against the JPY last week fuelled by speculation that further easing would be announced by the ECB, it did.
For the USD to move higher we would like to see an early break past 10309. If the momentum is strong then we could see 10356 reached. This level will then need to be broken with a long solid up bar before we see 10410.
If we see another downward move then we would like to see an early break past 10211 followed by further strong breaks past the area between 10169 – 10152 leading the pair to reach 10052. If 10052 is then broken with a long solid down bar we could see 9977.
COMMODITIES
GOLD – 1250 ( + 1 or + 0.08% )
Gold has formed a temporary bottom for the moment. Note: this can change quickly. “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 – 102.74 ( – 10 or – 0.10% )
OIL gradually moved lower last week but found some strength towards the end closing only 10 points lower. Therefore our comments from last week remain the same.
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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