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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.
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INDICES
AUSTRALASIA
ASX – 5743 ( -321 or -5.29% )
Last week saw the ASX crumble under the weight of a global equities sell-off. The big question now is have we seen the low or are we about to break a key technical level? We will be discussing this at length in the MEMBER PORTAL.
VOLATILITY ALERTS:
Tue 11:30 – NAB Business Confidence
Thu 11:30 – Unemployment Rate
Fri 09:30 – RBA Governor Lowe Testifies
For a continued move higher we would like to see the ASX close and hold above 5746. Should this occur we will look for a retest of 5777, and a strong close above this could result in a quick move to 5823. If momentum is strong we will then look for a rally into 5875 and 5921.
If the ASX cannot close and hold above 5746, we are likely to see another retest of 5693, however a break below this could quickly see another move to 5671. A close below this level may result in more selling into 5606 and if momentum is very strong a move down into 5582 and 5521 cannot be ruled out.
EUROPE
DAX – 12217 ( -494 or -3.89% )
The DAX was also sold off very aggressively last week and has now come into a very key area of support. This week will be a key week for this market.
VOLATILITY ALERTS:
Wed 18:00 – German Prelim GDP (quarterly)
Wed 19:00 – German Buba President Weidmann Speaks
For a continued move to the upside we must now see the DAX hold above 12115. Should this occur we will look for a move back up to 12384. A strong break of this level could then see the DAX rally quickly to 12566; and if momentum to the upside is very strong we cannot rule out a move to 12714.
If the DAX fails to hold above 12115, we will look for a move down to 12044. A close below this level could see a move down into 11875. Below this we have key support between 11790 – 11755. However should these levels break be prepared for a potentially strong move down into 11519.
US
SP500 – 2622 ( -134 or -4.86% )
The remarkable increase in volatility in US equity markets saw the S&P collapse last Monday followed by wild volatility throughout the week. We will be discussing the impact of this move in the LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Thu 00:30 – CPI (monthly)
Thu 00:30 – Retail Sales (monthly)
Fri 00:30 – PPI (monthly)
Fri 00:30 – Philly FED Manufacturing Index
Sat 00:30 – Building Permits
Sat 02:00 – Prelim UoM Consumer Sentiment
For a move higher we would like to see the S&P close hold above 2638. Should this occur we will look for a move back up into 2660. A strong break and close above this level could see the S&P rally quickly to 2680, and if momentum remains strong to the upside we cannot rule out moves to 2720 and 2736.
If we cannot close above 2638, we could see this market continue to sell-off into 2590 before a pause. A break below this level however could mean this market retraces lower into 2562; and a close below this level may see a retest of 2540. If the S&P closes below 2540 watch out- we could see a very sharp move into 2511 by the week’s end.
FOREX
AUD/USD – 0.7808 ( -112 or -1.41% )
Last week asked whether the Aussie Dollar could regain the key 80c level and following an early attempt at a move higher, this market continued to sell-off for the rest of the week.
VOLATILITY ALERTS:
Tue 11:30 – NAB Business Confidence
Thu 11:30 – Unemployment Rate
Fri 09:30 – RBA Governor Lowe Testifies
For a move higher we must now see this market close above 0.7833, followed by a strong break and close above 0.7903. Should this occur we will look for this market to test 0.7988. A strong break and close above 0.0.7988 could see this market post further gains into 0.8034 by the week’s end.
If we cannot close above 0.7833, we are likely to see a move lower into 0.7779. Should the downside momentum continue we could see 0.7729 quickly before another pause; and if selling pressure is strong a move into 0.7662 cannot be ruled out.
EUR/USD – 1.2251 ( -204 or -1.64% )
The Euro closed 200 points lower and is also at a key level. Can the Euro bounce higher from here or will we see another leg down? We will be discussing this market in more detail in the LIVE CHAT ROOM.
VOLATILITY ALERTS:
Wed 18:00 – German Prelim GDP (quarterly)
Wed 19:00 – German Buba President Weidmann Speaks
Wed 21:00 – Flash GDP (quarterly)
For a sustained move higher we would like to see the EURO hold above 1.2165 followed by a strong push into 1.2266. Should this occur, we will then look for this market to test 1.2358; and if momentum is very strong we could see a push higher into 1.2420.
If the EURO cannot hold above 1.2165, we could see a move back down 1.2040 before a pause. This is an important level and any subsequent strong break and close below this level may see the EURO sell-off further into 1.1929 this week.
GBP/USD – 1.3826 ( -289 or -2.05% )
Like the EURO, the Pound also finished the weak lower and with continued news filtering through on the Brexit discussion, we are on alert for continued volatility.
VOLATILITY ALERTS:
Tue 20:30 – CPI (annual)
Fri 20:30 – Retail Sales (monthly)
For a move to the upside we would like to see a strong break and close above 1.3875 A break above this level may result in moves into 1.4075 and 1.4194. Should momentum remain strong to the upside, we could see a move into 1.4223 by the week’s end.
If we cannot close above 1.3875 we could see a quick move down into 1.3743 – 1.3725 before a pause. A continued sell-off may see another move lower into 1.3683 and 1.3654, with a strong break below these levels meaning cable may trade down into 1.3534. If momentum continues to remain strong, we could see a sharp decline to 1.3277.
USD/JPY – 108.78 ( -139 or -1.26% )
Following a leg down on Monday, the $/YEN continued to sell-off throughout the week however Friday’s activity creates for a very interesting week this week. We will be discussing this market in more detail in the LIVE CHAT ROOM.
NOTE: Monday is a public holiday in Japan (Foundation Day)
VOLATILITY ALERTS:
Wed 10:50 – Prelim GDP (quarterly)
For a move to the upside we must now see this market hold 108.31, on its way to retesting 109.21 before a pause. A strong break and close above this level could then see the $/YEN rally into 109.94, and if momentum is very strong we could see moves to 110.31 and 110.78.
If we cannot hold above 108.31, we could see a fast move lower into 107.75. A break below this level may result in a retest of 107.36 and this is where things get very interesting. A break below this level could mean a very sharp move down to 106.52.
COMMODITIES
GOLD – 1315 ( -17 or -1.28% )
Sellers were again active in GOLD last week however we are starting to see buyers enter this market. We continue to see a lot of activity in this market at our levels at 1322 and 1333.
For a continued move higher we would like to see this market close above 1322. Should this occur we will look for another retest of 1333 before a pause. If GOLD can hold above 1333 and momentum remains strong, we could see a rallies into 1340 and 1355.
If Gold cannot close above 1322, we will look for a move back down into 1303. A strong break below this level could see GOLD sell off further into 1292, and if momentum is strong to the downside we could see 1278 before the week’s end.
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