This market brief is an overview of the week ahead and some of the events we see as being important to the markets.
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INDICES ASX – 5685 ( -103 or -1.78% ) The ASX continued lower despite showing signs of a bounce late in the week. We will be discussing this market in more detail in the MEMBER PORTAL . NOTE: Monday is a public holiday in most states (Queen’s Birthday) VOLATILITY ALERT: NAB Business Confidence on Tuesday, Unemployment Rate on Thursday. For a continued move higher we would like to see the ASX hold above 5671. Should this occur we will look for a retest of 5746, and a strong close above this may result in a move to 5777. If momentum is strong we will then look for a rally into 5823. If the ASX cannot hold above 5671, a break below could see a move lower to downside a move lower into 5606. A close below this level may result in more selling into 5582 before a pause; however if the selling persists to the downside we cannot rule out a move back down to 5521.
EUROPE DAX – 12774 ( -69 or -0.54% ) Amongst last week’s uncertainty the DAX continues to hold up with the ECB again announcing they will do whatever it takes. VOLATILITY ALERT: German ZEW Economic Sentiment on Tuesday, Eurogroup meetings on Thursday. For a continued move to the upside we must see the DAX hold above 12714. Should this occur we could see a strong move 13110, and if momentum is very strong to the upside we cannot rule out a move to 13205. If the DAX fails to hold above 12714, we will look for a move back down to 12536. A strong break below this level is likely to see a push further down into 12384.
US SP500 – 2430 ( -7 or +0.29% ) It is a big week for US markets with a very busy economic calendar scheduled. This week markets will be looking to what the FED will do. We will be covering the FOMC Interest Rate Announcement live during Live TV. VOLATILITY ALERT: Monthly PPI on Tuesday, CPI, Retail Sales and FOMC Interest Rate Announcement on Wednesday, Philly FED Manufacturing Index on Thursday, Building Permits and Housing starts on Friday For a move higher we would like to see the S&P hold strongly above our key level at 2418 Should this occur we anticipate further upside over the following week. Our next upside targets are 2465 and 2477. If we cannot hold above 2418, we will look for a move to retest strong support at 2400. A strong break below this level could see the S&P spike to 2392, and a close below this level could see this market trade 2386 by week’s end.
FOREX AUD/USD – 0.7530 ( +89 or +1.20 % ) The Aussie Dollar has rallied right into one of our key reversal areas and we will now look to see if this market reverses this week or continues higher. We will be discussing this market in more detail in the MEMBER PORTAL . NOTE: Monday is a public holiday in most states (Queen’s Birthday) VOLATILITY ALERT: NAB Business Confidence on Tuesday, Unemployment Rate on Thursday. For a move higher we would like to see this market now break and close above 0.7561. Should this occur we will look for a retest of 0.7617. A strong break and close above this key level could see this market rally to 0.7677 before a pause. If we cannot close above 0.7561, we will look for a retest of the key 0.7489 support area. A close below 0.7489 may then result in a move down to 0.7447. Should we break strongly through this level, we cannot rule out a sharp move down to 0.7364 by the end of this week.
EUR/USD – 1.1196 ( -83 or -0.74% ) Like the Aussie Dollar the EURO has also come into one of our key areas and is now testing the bulls for higher prices. VOLATILITY ALERT: German ZEW Economic Sentiment, Eurogroup meetings on Thursday, ECOFIN meetings on Friday. For a sustained move higher we would now like to see the EURO close and hold above 1.1201. Should this occur we will then look for a move to 1.1248 before a pause. However a strong break above this level could see a quick move into 1.1347. Should momentum remain strong to the upside, we cannot rule out a move into 1.1380 this week. If the EURO cannot hold above 1.1201, we will watch for a move back down to 1.1117. A break below this level could see this market trade quickly down 1.1083 cannot be ruled out; and if momentum remains very strong we could see a sharp move down to 1.1033 and 1.0977.
GBP/USD – 1.2742 ( -147 or -1.14 % ) We spoke about how the Election would impact the Pound in both LiveTV and in our coverage in the Member Portal last week, and we we called the exact scenario that would occur. We will discuss this market further this week and what follow-through we could see from Theresa May’s bungled election in the MEMBER PORTAL . VOLATILITY ALERT: Annual CPI on Tuesday, Unemployment Rate on Wednesday, Retail Sales and Interest Rate Announcement on Thursday . We will be covering the BoE Interest Rate Announcement live during Live TV. For a continued move to the upside, we would like to see Cable remain above our key level of 1.2720. A strong break through this level could see the GBP/USD trade to 1.2868, and should momentum remain very strong we will look for a strong move back into 1.3035. On the downside, should we break and close strongly below 1.2720, we could see the GBP/USD move back into 1.2510. A break below this level may result in a move to 1.2458, and further breaks to the downside may see a sharp move into 1.2297.
USD/JPY – 110.32 ( -10 or -0.09% ) The YEN finished the week off slightly lower than where it started and as such our levels remain unchanged. This week is a key week for this market and we expect some volatility here this week. VOLATILITY ALERT: BoJ Interest Rate Announcement on Friday . For a continued move to the upside we must now see this market break and close above 111.09. Should this occur we will look for a move back up to 111.73, and a retest of the key level at 112.22. Should we break and close above 112.22 we could see a strong move into 113.87 – 114.08, and if momentum is very strong a move higher into 114.52 cannot be ruled out by week’s end. If we cannot break back above 111.09, the YEN may see further downside into a key area between 110.10 – 109.94. A strong break and close below 109.94 may result in further downside into 109.21, and if downside momentum is very strong this week 108.31 cannot be ruled out.
COMMODITIES GOLD – 1266 ( -12 or -0.94% ) After rallying into our key 1276-1278 area last week, our next level higher was 1294 and that’s exactly where GOLD topped before selling off sharply into the close of last week. For a continued move higher we would like to see this market hold above 1257. Should this occur we will look for a move higher back into our key 1276 – 1278 area, and if momentum is very strong to the upside we could see a retest of 1294. If Gold cannot hold above 1257, we will look for a move back down into 1247. A strong break below this level could see a move down into 1235, and if momentum is very strong to the downside we cannot rule out a move to 1222.
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