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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5244 ( -150 or -2.78% )
Much like other global markets, the ASX took a nosedive on Friday following the big sell-off we saw in the US.
We will be discussing this market in more detail in the LIVE CHAT ROOM.
VOLATILITY ALERT: NAB Business Confidence on Tuesday, Unemployment Rate on Thursday.
For a continued move to the upside we would like to see this market break back up and hold above 5294. Should this occur, we will look for a move back up to 5373 – 5390. A strong break and close above this level could see the market trade to 5487, and if momentum remains very strong we could see the ASX rally to 5589 by the end of the week.
If we fail to hold above 5294, we will look for a move back down to 5238 – 5235. A break below this could result in a move back into 5161, and further breaks to the downside could see the ASX head to 5238. Should we see a complete reversal to the downside, we will watch for a move back down to 5090.
EUROPE
DAX – 10448 ( -258 or -2.41% )
The DAX is now at a critical level and we will be watching this market closely to see how it behaves this week.
VOLATILITY ALERT: Draghi speaks on Tuesday, German ZEW Economic Sentiment.
For a continued move to the upside we would like to see the DAX hold above above 10382. If so we could see the DAX make a move back up to 10585 – 10601 before another pause. If momentum is VERY strong we would not rule out an explosive move to 10863.
If we fail to hold above 10382, we will look for a move back down to 10289 and potentially 10158 quickly. A close below this level may result in a move down 10013 and should this level fail, we could see a move back down into to 9907. A strong break below this level could see the DAX trade all the way back down to 9822.
US
SP500 – 2123 ( -56 or -2.57% )
Wow- a 50+ point day on the S&P? Whoever said this market doesn’t move must be sleeping!
We have now broken through the previous all-time highs at 2137 and will also be watching this market closely to see if buyers are willing to step back into this market.
We will be discussing this market again in more depth in the MEMBER PORTAL this week.
VOLATILITY ALERT: Retail Sales and PPI on Thursday, CPI on Friday.
NOTE: Monday is a public holiday in the US due to Labour Day.
For a move higher we would like to see a the S&P break above 2126. Should this occur we will look for a move to test the key 2137 level. A strong break and close above 2137 could see a retest of above is 2150, and a strong break and close through 2150 could see this market run to 2160 and 2176 very quickly.
If we cannot hold above 2126, we will watch for a move back down into 2112 before a pause. A strong break and close below this level could see the S&P head back down into 2106, and a further break below this level may mean another test of the important 2097 area. If momentum to the downside is very strong we cannot rule out a move back down to 2074.
FOREX
AUD/USD – 0.7535 ( -35 or -0.46% )
This $AUD ended the week slightly lower than where it started amidst growing concerns that there may be another interest rate cut yet to come.
VOLATILITY ALERT: NAB Business Confidence on Tuesday, Unemployment Rate on Thursday.
For a move higher we would like to see the AUD break above 0.7561, followed by a break and close above 0.7617. A strong break and close above this level could then see a quick move to 0.7662 before a pause; and if momentum remains strong we will look for strong move into 0.7729.
If we cannot break above 0.7561, we will look for a move back down to 0.7447. A strong break below this level may result in a move back down into 0.7364 before another potential pause. Any subsequent breaks of this level however may result in a very fast move down to 0.7282.
EUR/USD – 1.1231 ( +77 or +0.69% )
Last week’s ECB interest rate proved to be very muted as we expected, however we did anticipate the move that followed in our Live TV with uncanny accuracy!
VOLATILITY ALERT: ECB President Draghi speaks on Tuesday and German ZEW Economic Sentiment on Tuesday.
For a sustained move higher we would now like to see the EURO break above 1.1248. If we can continue to break higher we will look for a quick move into 1.1347. Should momentum remain strong to the upside, we cannot rule out a move back up to 1.1380 this week.
If the EURO cannot close above 1.1248, we will watch for a move back down to 1.1201. A break below this level could see this market trade quickly down to 1.1117. Should we see further breaks to the downside, a move to 1.1083 cannot be ruled out; and if momentum remains very strong we could see a sharp move down to 1.1033
GBP/USD – 1.3261 ( -19 or -0.14% )
The GBP continues to consolidate the Brexit sell-off. This market has seen subdued volatility over the past few weeks so BE PREPARED for a move!
This week we have the all important BoE Interest Rate announcement and we will be covering this LIVE during LIVE TV
VOLATILITY ALERT: Annual CPI on Tuesday, Unemployment Rate on Wednesday, BoE Interest Rate Announcement on Thursday.
For a move to the upside we would like to see this market hold above 1.3227. Should this occur we could see the GBP/USD test 1.3426 very quickly. If momentum remains very strong, a move to 1.3644 cannot be ruled out.
If we cannot hold above 1.3227, we will look for a move back down to 1.3035. A break below this level could see a retest of 1.2928 before a pause. Should we see a break below 1.2928, watch out for a potential sharp move down to 1.2720.
USD/JPY – 102.68 ( -126 or -1.21% )
The Yen continues to wreck havoc for everyone. One week we are rallying strongly higher- the next we are selling off sharply.
We have some major levels in play (discussed in our Members Forum) and will continue to discuss this market in our MEMBER PORTAL.
For a continued move to the upside we would like to see this market hold above 102.29, followed by a break and close above 103.21. Should this occur we will look for move into 103.99. A strong break above 103.99 could see a move to 104.97, and if momentum remains strong we cannot rule out a sharp move higher to 106.30.
If however the USD/JPY cannot hold above 102.29, we will look for a move down to 101.12 and 100.76 – 100.61. A strong break below these levels could see the USD/JPY trade quickly down to 99.90 before a pause. Should we continue to trade lower and see continued downside pressure on the USD/JPY- a sharp move to 98.22 is possible.
COMMODITIES
GOLD – 1328 ( +4 or +0.3% )
Gold has finished the week where it started, so our levels remain the same. This market is now becoming interesting and is starting to show signs of a potentially explosive.
We will also be discussing this in more detail this week in our MEMBER PORTAL.
For a continued move higher we would like to see GOLD break back above 1333. If we can hold these levels we will look for a move back up to 1355. A break above 1355 could see GOLD retest the important 1375 level before another pause. This is a key area and should we see a strong close above 1375, we will look for a move to 1400.
If Gold cannot break above 1333, we will look for a move back down to 1303. A strong break and close below this level may result in a retest of 1294, and further breaks to the downside could see Gold trade retest the important 1276 level. If downside momentum continues to persist, a strong break through 1276 could see a 1257 by the end of the week.
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