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 AUSTRALASIA ASX – 5891 ( +56 or +0.96% ) The ASX closed higher last week however has now come into a very important area of technical resistance. VOLATILITY ALERTS: Tue 14:30 – NAB Business Confidence Wed 11:30 – Wage Price Index (quarterly) Thu 11:30 – Unemployment Rate For a continued move higher we must now see the ASX hold above 5823 followed by a retest of 5930. A strong close above 5930 could see a move back up into 5985 , and if momentum to the upside is very strong we cannot rule out a strong reversal into 6070. If the ASX cannot hold above 5823, we will look for a move back down to 5777 and 5746 before a pause. A strong break and close below this level however could see the ASX sell off into 5671, and if downside momentum is very strong we could see a sharp move down to 5582.
EUROPE DAX – 11541 ( -11 or -0.1% ) The DAX remained relatively unchanged last week as buyers and sellers are now locked in a battle around the key 11519 area. VOLATILITY ALERTS: Tue 14:30 – German ZEW Economic Sentiment Wed 18:00 – Prelim GDP (quarterly) Fri 19:30 – ECB President Draghi Speaks For a continued move to the upside we must see the DAX close strongly above the 11755 – 11790 area. Should this occur, we will look for a retest 11875. If momentum is very strong, a break and close above this level could see another push higher into 12054. If the DAX fails to close above 11755, we will look for a move back down to 11362 before a potential pause. If this market continues to sell-off, a very strong move down into 11050 cannot be ruled out.
US SP500 – 2776 ( +54 or +1.98% ) Like the ASX the S&P has failed to break the key October swing high; and we have been discussing this scenario for some time. We will again be discussing this market extensively in the LIVE CHAT ROOM . NOTE: Monday is a public holiday in the US (Veterans Day) VOLATILITY ALERTS: Thu 00:30 – CPI (monthly) Thu 10:00 – FED Chair Powell Speaks Fri 00:30 – Retail Sales (monthly) Fri 00:30 – Philly FED Manufacturing Index For a move higher we would like to see the S&P hold above 2760. Should this occur we could see another retest of 2808, and if momentum remains strong to the upside we cannot rule out a move to 2838. If we cannot hold above 2760, we could see this market continue to sell-off into 2704 before another pause. A break of this level however may result in quick move down to 2680; and if momentum to the downside remains strong we may see a move down into 2660 and 2638.
FOREX AUD/USD – 0.7225 ( +27 or +0.38% ) The Aussie dollar posted another positive week as this market threatens to end the sustained selling pressure we have seen all year. VOLATILITY ALERTS: Tue 14:30 – NAB Business Confidence Wed 11:30 – Wage Price Index (quarterly) Thu 11:30 – Unemployment Rate For a move higher we would like to see the AUD break above 0.7229, followed by a break and close above 0.7282. A strong break and close above this level could see a quick move to 0.7364 before a pause; and if momentum remains strong we will look for a move back up into 0.7447. If we cannot hold above 0.7229, we will look for a move back down to 0.7169. A strong break below this level may result in a move back down into 0.7112 before another potential pause. Any subsequent breaks of this level however may result in a very fast move down to 0.7070.
EUR/USD – 1.1344 ( -42 or -0.37% ) Sellers have returned to the Euro following a brief rest and the question on everyone’s mind is now will this market break a very big area?. We will be discussing this market extensively in the LIVE CHAT ROOM this week. VOLATILITY ALERTS: Wed 21:00 – Flash GDP (quarterly) Fri 19:30 – ECB President Draghi Speaks For a sustained move higher we would like to see the EURO close and hold above 1.1335 early in the week. Should this occur we could see a strong move into 1.1453 and any breaks above this level may mean a quick move into 1.1496 before a pause. A strong close above this level however could see the EURO rally strong into 1.1613 by the week’s end. If the EURO cannot hold above 1.1335, we could see a fast move down into 1.1249 before a pause. A strong break of this level may result in a move into 1.1201, however any weakness below this level could see a sharp drop into 1.1117 before the week’s end.
GBP/USD – 1.2972 ( +6 or +0.05% ) The Pound is also showing signs of weakness and we are keeping a close eye on this market. VOLATILITY ALERTS: Tue 20:30 – Unemployment Rate Wed 20:30 – CPI (annual) Thu 20:30 – Retail Sales (monthly) For a continued move to the upside, we would like to see Cable close above 1.3035, followed by a retest of 1.3161 before a pause. Should this occur we will look for a move to 1.3191 and 1.3277; and if momentum is very strong we could see a re-test of last week’s highs into 1.3386. On the downside, should we break and close strongly below 1.2868, we could see this market break quickly lower into 1.2720. A strong break below this level however sets this market up for a bigger move down into 1.2622.
USD/JPY – 113.82 ( +63 or +0.56% ) Last week we asked if the $/YEN is holding or or being supported? We noted $US strength early in the week but maintained it is an uphill battle from here. We will be discussing this market in more detail in the MEMBER PORTAL this week. VOLATILITY ALERTS: Wed 10:50 – Prelim GDP (quarterly) For a continued move to the upside we must first see this market close above 113.86. Should this occur we will look for a retest of retest 114.52. A break above this level may see the $/YEN move higher into 115.54, and if momentum is very strong we will look for a move to 116.08. If we cannot close above 113.86 we will look for a move back down into 112.39. A break below this level is likely to result in a retest of 111.73; and as we mentioned last week: Should we break below 111.73 WATCH OUT- the move that follows may be very sharp into 111.09 and 109.94.
COMMODITIES GOLD – 1209 ( -23 or -1.87% ) GOLD was sold off aggressively on Friday following consistent selling all throughout the week. Can this market recover this week? For a move higher we must see this market hold above 1206 on its way to retesting 1222. Should this occur we will look for a retest of 1238. A close above this level may likely see a further move to the upside into 1247 before a pause. Should momentum remain very strong, we could see a fast move into 1260. If Gold cannot hold above 1206, we could see another quick decline into 1187. Any subsequent breaks of this level may result in further downside into 1180, and if momentum to the downside remains very strong we cannot rule out a move into 1170.
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