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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.
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AUSTRALASIA
ASX – 5051
The ASX took a leg down last week, and it reached our first downward target of 4983 then bounced off 4983 to settle 70 points higher.
If we are to see a continuation of the up move then we would like to see 5125 broken early in the week with long solid bars. If this occurs then we will be looking for 5249 as our next target.
If another down move is to occur then 4983 needs to break before finding possible support near the 4923 – 4904 area. If this area is broken with strong downward momentum then an ambitious target of 4760 could be reached.
EUROPE
FTSE – 6589
The FTSE moved lower last week and is now sitting just below an import level of 6599 which is now becoming a short term level of interest.
If the FTSE makes another attempt to move higher, then we would like to see 6599 broken early in the week. We would also like to see 6699 and 6740 broken with solid momentum before we see an ambitious target of 6876 reached.
If we see a continuation of the down move from here, then we would like to see 6541 broken before potential support is found at 6439. If 6439 is broken with solid downward momentum then we could see 6306.
DAX – 8342
The DAX has now broken below the standard deviation channel and is now sitting in between 2 short term levels of interest – 8345 and 8298
If we are to see a move up then we would like to see 8345 broken early in the week and hold as a solid level of support before seeing 8458.
If the down move continues then we would like to see 8298 broken before support is found at 8106. If this level is then broken with solid downward momentum then 8006 could be reached with a possible extension down to 7933.
US
S&P – 1688
The S&P was not able to continue the rally last week and it faded below 1700 after reaching a high of 1708 which was 2 points from our upper target.
If we are to see an up move then we will be looking for a break past a short term level of 1696. If we see a solid break and a close above 1710 we may then see the start of a new uptrend cycle. Once this cycle starts then we will look for new upper targets.
If the S&P struggles to get above 1696 and there is a solid break below 1685, then we could see the 1648 level before reaching an ambitious downside target of 1623 which could become support.
NASDAQ – 3114
The NASDAQ last week slowed down after a very aggressive upward move.
As mentioned in last week’s brief, if this up move has any chance at continuing then we would like to see a strong move with long up bars breaking past 3145 which could then lead to a move towards 3194.
If a break back down occurs then 3087 needs to be broken, and if this does happen then we will be looking for 3032. If the downward move is strong then we could see the NASDAQ dip below 3000 once again.
FOREX
AUD.USD – 9197
The AUD bucked the trend last week after the RBA announcement and made an all important move back above 9055 and breaking 9113. The question remains; which will strengthen more in the coming months, the AUD or the USD?
If we see the longer term downtrend continue then we would like to see a solid break back down past 9055 and then further downward momentum towards 8780 which will then become an important level to watch.
Now that the AUD has broken 9113 we would like to see a strong move past the area between 9370 – 9395 before a new uptrend can form. Once this is done we will revisit upper targets.
EUR.USD – 13338
The EUR made the all important break above 13285 last week to start the process of a potential new uptrend.
If the move up is to continue then we would like to see a solid break past 13433 early, which could then lead to 13506. If 13506 is broken with strong upward momentum then 13710 could be then the next possible target.
The downside move could take place if 13293 is broken early in the week followed by a solid break past 13176 could lead to 13086.
GBP.USD – 15496
The GBP had its second wind and rallied further last week reaching a high of 15574, which was only 24 points below our upper target.
If we see a continuation of the upmove then we would like to see a solid break past 15598 before an attempt at 15722 occurs. If the momentum is strong then 15838 is our ambitious upper target.
If we see a down move from here, then we would like to see 15380 broken before the move finds potential support near 15282.
USD.JPY – 96.21
The JPY is showing the potential to strengthen and this is not helped with the equity markets rallies slowing down. Has the smart money already made the move to the safe haven play?
For the USDJPY pair to start a new rally we would first like to see 97.56 broken with solid long up bars which could lead it towards 98.73, which will then become an important level to watch before next move is made on this pair.
For this down move to take a new leg down we would like to see a solid break past 95.08 before we could see an old low of 93.77 area.
COMMODITIES
GOLD – 1314
If another attempt at an upmove is to take place then we would like to see 1302 hold and 1324 broken on the upside. If this occurs with solid momentum then we could see 1391 reached. If the momentum continues then 1436 is the ambitious upper target.
If we see a continuation of the longer term downtrend then 1302 needs to be broken and then 1261 – 1254 levels will play an important role as either support or just another level to be broken before GOLD dips below 1200 again.
US LIGHT CRUDE OIL – 106.13
What we said last week still holds: “A lot has to be said about the move in OIL lately, and as you will notice in the charts any solid downward moves early were followed by strong rallies late. It seems like we are running out of the commodity by the end of each week. Overall we could be in for a world were 100+ OIL is the norm.”
For the up move to continue then a solid break with long bars past 110 could see 119.11 reached very quickly.
If we see a down move then any strong movement break past the standard deviation channel or 105.60 could see 102.51, and if 102.51 is broken the 100.92 could be the next level.
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