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 – 6276 ( +20 or +0.32% ) The ASX was one of the few major markets that managed to close higher last week how remains in a very narrow range, closing right at our key level of 6276. VOLATILITY ALERTS: Tue 14:30 – NAB Business Confidence Wed 11:30 – Wage Price Index (quarterly) Thu 11:30 – Unemployment Rate Fri 09:30 – RBA Governor Lowe Speaks For a continued move higher we must now see the ASX close above 6276. Should this occur we will look for a move into 6345, and if momentum to the upside is very strong we cannot rule out a move to 6440. If the ASX cannot close above 6276, we will look for a move back down to 6206 before a pause. A strong break and close below this level however could see the ASX retest 6140, and if downside momentum is very strong we could see a move down to 6070.
EUROPE DAX – 12412 ( -228 or -1.8% ) Last week we mentioned the DAX was showing topping signs and this market followed through with a strong sell-off on Friday. We will be discussing this in more detail in the MEMBER PORTAL this week. VOLATILITY ALERTS: Tue 16:00 – German Prelim GDP (quarterly) Tue 19:00 – German ZEW Economic Sentiment For a continued move to the upside we must now see the DAX hold above 12384 followed by a move into 12566. A break of this level could then result into a quick move into 12640; followed by continuation into 12714. If momentum to the upside is very strong we cannot rule out a move to 12830. If the DAX fails to close and hold above 12384, we expect to see a move back down into 12198 before a pause. A break below this level however means we may see more selling into 12115; and if momentum is very strong to the downside we may see a sharp move into 12044. US SP500 – 2838 ( -3 or -0.11% ) The S&P finished off the week down slightly; however this week will be a key week for this market. We will be discussing this in more detail in the LIVE CHAT ROOM . VOLATILITY ALERTS: Wed 22:30 – Retail Sales (monthly) Thu 22:30 – Building Permits Sat 00:00 – Prelim UoM Consumer Sentiment For a move higher we would like to see the S&P close and hold above 2840. Should this occur the stage is set for a retest of 2870 and any break above this level could see new all-time highs into 2902. If we cannot hold above 2840, we will look for a move back down to 2808. A break below this level may result in another quick move down into 2794 and 2785; and if momentum to the downside is very strong we cannot rule out a move into 2760.
FOREX AUD/USD – 0.7294 ( -102 or -1.38% ) The Aussie Dollar marks the first of many currencies that broke out last week. Will we see a continued breakdown? We will be discussing this in more detail in the LIVE CHAT ROOM . VOLATILITY ALERTS: Tue 14:30 – NAB Business Confidence Wed 11:30 – Wage Price Index (quarterly) Thu 11:30 – Unemployment Rate Fri 09:30 – RBA Governor Lowe Speaks For a move higher we would like to see the AUD hold above 0.7282, followed by a retest and close above 0.7364. A strong break and close above this level could see a quick move to 0.7447 before a pause; and if momentum remains very strong we will look for a big move into 0.7489. If we cannot close above 0.7282, we will look for a move back down to 0.7364. A strong break below this level may result in a move down into 0.7229 before another potential pause. Any subsequent breaks of this level however may result in a very fast move down to 0.7169 and 0.7112.
EUR/USD – 1.1409 ( -157 or -1.36% ) The bears are firmly in control as we mentioned in last Friday’s Live TV. Will we see a continuation of this move now? NOTE: Wednesday is a public holiday in Italy and France (Assumption Day) VOLATILITY ALERTS: Tue 16:00 – German Prelim GDP (quarterly) Tue 19:00 – Flash GDP (quarterly) Tue 19:00 – German ZEW Economic Sentiment Fri 17:00 – Final CPI (annual) For a sustained move higher we would like to see the EURO close and hold above 1.1453 this week. Should this occur we could see a quick move into 1.1496 before another pause. A strong break above 1.1496 could then result in a fast move back up to to 1.1613. If the EURO cannot close above 1.1453, we could see a fast move down into 1.1347. A break below level however could be followed by another sharp move down into 1.1249; and should momentum remain strong we cannot rule out a move to 1.1197. GBP/USD – 1.2771 ( -231 or -1.78% ) The Pound continues to sell off amidst Brexit news and challenges to Theresa May’s leadership; and this week is yet another important week for this market. VOLATILITY ALERTS: Tue 18:30 – Unemployment Rate Wed 18:30 – CPI (annual) Thu 18:30 – Retail Sales (monthly) 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 back up 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 – 110.91 ( -36 or -0.32% ) They $/YEN continues to try and form a base at the key 110.50 area having fully faded the BoJ’s comments a fortnight ago. For a move to the upside we must now see this market close strongly through 111.09. A strong break and close above this level could then see the $/YEN rally into 111.73, and if momentum is extremely strong to the upside 112.68 cannot be ruled out. If we cannot close above 111.09, we will look for a quick retest of 109.94. A break below this level however may result in a fast move down to 109.21, and if the downside remains strong we could see a strong sell-off into 108.31.
COMMODITIES GOLD – 1211 ( -2 or -0.16% ) GOLD remains in a tight sideways range and our levels have remained unchanged since last week. For a move higher we would like to see this market close above 1216 and 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 close above 1222, we could see another quick decline into 1206. Any subsequent breaks of this level may result in further downside into 1194, and if momentum to the downside remains very strong we cannot rule out a move into 1187.
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