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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5207
The ASX bounced off a low of 5046 last week, which was 8 points lower than our level of 5054 mentioned in our previous brief. The short burst up then closed only 7 points above the important level of 5200. It is also interesting to note that the divergence of the downside mentioned last week also came into play.
For the up move to continue we would like to see 5200 hold as a solid line of support before a move past 5240 can occur. Once this is achieved then we could see 5271. If the upward momentum remains strong and 5271 is broken with long up bars then we could reach 5338 and once again possibly retest 5366.
For the longer term down move to continue then we would like to see another solid break past 5200 leading towards 5175. If the downward momentum is strong then a clear break past 5144 – 25 area needs to occur before we see further moves towards 5054 reached and 4983.
EUROPE
FTSE – 6603
The FTSE bounced of a low of 5389 which was near FICM’s potential support levels to rally another 200+ points which was in line with some of the other moves in the equity markets.
For the FTSE to continue its up move we would like to see an early strong break past 6658 followed by a long up bar breaking through 6739 which could then lead the FTSE to complete its range and reach 6791. If the momentum is strong then we could see an extension towards 6847.
For the down move to restart then we would like to see an early break past 6516 followed by 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.
DAX – 9346
The DAX also moved higher towards the end of the week pretty much following the rest of the world, but the move was mild for the DAX with only 200+ points from the lows considering some of the other less correlated markets moved by the same amount. As mentioned last week 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 continue 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 9431. If the momentum continues then we could see the area between 9554 – 88 tested and depending on how soon this is reached we will revise accordingly.
If the DAX restarts its down move and we see a continuation then we would like to see an early break past 9294 which could see 9114 reached. Our primary model FICM is then showing 3 levels of potential support 9113, 9000 and 8959.
US
S&P – 1797
The S&P had an interesting week last week after falling 44 points on day 1 and then rebounding by over 53 points to close higher. Now this comes off the back of ‘not so good’ job numbers! Confused? It’s a simple formula this time, next time its anyones guess:
(strong growth + good job numbers = Fed Taper) Bad for the markets
or
(slow growth + bad job numbers = No Fed Taper) Good for the markets
Sometimes the markets will play mind games with traders and it really depends on the way the wind is blowing. Some fancy analysis for you all:
Bad is Good and Good is Bad
Bad is Good and Good is Good
Bad is Bad and Good is Bad
Bad is Bad and Good is Good
Once you work this out you are on your way to becoming a policy maker or politician.
For the S&P to continue higher then we will stay with previous levels mentioned. We would like to see an early solid break and close above 1815 – 20 area. Once this is achieved then 1848 – 50 could once again be tested. Once this level is broken we will be discussing potential upside levels in our members area.
If the S&P cannot break past 1800 – 1805 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 – 8958
The AUD rallied last week and closed just under 9000 which it will need to break through to find further direction.
For a new up move to continue then we would like to see 8964 broken early in the week followed by a push past 8994. Once this occurs we could see the AUD move towards 9105. We will revise once this level is met.
If the AUD cannot break through the round number of 9000 then we would like to see a solid break with long down bars through 8923 reaching 8873. Once this occurs we would like to see a strong break through both 8873 and 8846 which could then reach 8753.
EUR.USD – 13634
We have, one week down and the next week up, once the markets understand the true impact of the FED unwinding we will then see clear direction forming.
For the EUR to continue higher we would like to see a break past 13647 early in the week followed by another strong move past 13701. Once this is achieved we could see 13774 reached. If the momentum continues then 13805 would become an ambitious level reached.
For the EUR to move lower then we would like to see 13606 broken early followed by a break past 13581. If this occurs then we would like to see a solid break with a long down bar to break through 13515. The EUR then might some potential short term support between 13432 and 13396.
GBP.USD – 16410
The GBP started last week with a strong down move, but then true to its previous form BOUNCE back to previous levels to close only 24 points lower. Therefore our comments from last week remain the same with slight mathematical amendments.
If the GBP repeats last weeks behaviour and does bounce early in the week then we would like to see 16460 broken which could lead the pair towards 16548. If this level is then broken with strong momentum then we will be watching the 16628 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 16229. If this level is then broken we could see 16169 and finally some support might be found near 16072.
USD.JPY – 10232
The USD is trying to rally but with many other factors in the world not playing out as planned by the USD Fed, traders are looking for potential moves back into safe have products like the Yen. 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 10304 broken early with a long solid up bar before reaching 10429. Once reached we will be looking for a solid break and close past this level before an attempt at 10544 is made.
If the equity markets take a turn for the worst and continue to move lower and traders move into the JPY as a safe haven of choice then a solid break past 10206 could lead the pair towards 10150 if the momentum is strong then we could see the pair near 10052 very quickly and possibly a further dip below 100 level reaching 9978.
COMMODITIES
GOLD – 1267
GOLD is trying very hard to make a move higher but is still reliant on the fear factor in the markets to push it higher and Friday did not help its cause. Here at Trade View we are still watching Gold closely as if the markets do move lower in a strong way then Gold might be back in play.
For GOLD to break higher both 1269 and 1282 need to be broken with a long solid up bar early in the week. Once this occurs than 1320 and 1351 could be the next possible targets. If the momentum is strong then GOLD might find some resistance near 1391.
If GOLD continues to find 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 – 100.05
OIL continued higher completing its full range set back in Dec 2013 to close higher by only 14 points.
For OIL to continue its move higher after Friday’s strong move we would like to see 100.70 broken early leading it towards 102.70. Once this level is reached and if it is broken with a solid long upbar then 104.07 could be the next level reached.
If we see OIL break back down below 99.35 we could see 9822 reached. If the momentum continues strong and we see a further breaks past 9744 then 96.99 could be reached. If 97.44 and 96.99 are broken with long down bars OIL could reach 9598 and possibly 94.55.
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