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 – 6878 ( +163 or +2.43% )
The ASX has finally managed to rally into all-time highs, and this week will be an important week to see we can follow through to the upside. We will be discussing this in the MEMBER PORTAL this week.
For a continued move higher we must now see the ASX hold above 6850. Should this occur we will look for a re-test of 6905. A strong break of this level however is likely to see the ASX rally to to further all-time highs at 7011. If the ASX cannot hold above 6850, we will look for a move back down to 6804. A strong break and close below this level however could see the ASX move lower into 6720 before a pause; and if downside momentum is very strong, we could see a move down to 6650.
DAX – 13456 ( +279 or +2.12% )
The DAX is also on the march with yet another multi-year high; as this market is also now testing significant highs.
VOLATILITY ALERTS: Thu 23:30 – ECB Monetary Policy Meeting Accounts Fri 05:00 – ECB President Lagarde Speaks
For a continued move to the upside we would now like to see the DAX hold above 13388, on its way to retesting 13520. A strong break and close above this level could see a fast move to 13697, and if momentum is very strong we could see a sharp move higher into 13787.
If the DAX fails to hold above 13388, we could see a move back down into 13205. A break below this level could mean a further move down into 13050, and if momentum is very strong we could see a fast move down to 12921.
SP500 – 3262 ( +27 or +0.83% )
The S&P continues to march higher with yet another week posting all-time highs.
VOLATILITY ALERTS: Wed 00:30 – CPI (monthly) Thu 00:30 – PPI (monthly) Fri 00:30 – Retail Sales (monthly), 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 hold above 3248. Should this occur, we will look for a move higher into 3274. A strong break above this level however sets the stage for a move higher into 3300; and if momentum is very strong we cannot rule out a move to 3348. If we cannot hold above 3248, we could see this market move lower into 3208. A break of this level however may result in quick move down to 3166; and if momentum to the downside remains strong we may see a fast move down to 3115 and 3100.
FOREX AUD/USD – 0.6899 ( -47 or -0.68% )
The Aussie Dollar is still range bound as we move into a sentiment based week.
For a move higher, we would first like to see the AUD hold above 0.6873. Should this occur, we will look for a retest of 0.6934, and if upside momentum remains very strong we cannot rule out a move to 0.7014 before a pause. If the AUD cannot hold above 0.6873, we will look for a move lower into 0.6800. A break of this level sets the stage for a move down to 0.6762; and if momentum is very strong to the downside we may see a move into 0.6692.
EUR/USD – 1.1121 ( -35 or -0.31% )
Like the Aussie Dollar, the EURO is also range bound.
VOLATILITY ALERTS: Mon 20:00 – Euro Area Flash Manufacturing PMI, Services PMI Wed 19:30 – ECB President Lagarde speaks
For a move higher this week, we would like to see the EURO hold above 1.1117; followed by a break back above 1.1197. Should this occur, we will look for a move to 1.1249 if momentum remains strong.
If the EURO cannot hold above 1.1117, we could see a move back down into 1.1033. If this market continues to sell-off, we could see a sharp move down into 1.0977, and any further weakness may result in a much bigger move down to 1.0902.
GBP/USD – 1.3060 ( -15 or -0.11% )
Following a volatile end to 2019, the Pound remains volatile however we have seen contracting ranges over the past week. We will again be covering this market exclusively in the LIVE CHAT ROOM this week.
VOLATILITY ALERTS: Mon 20:30 – GDP (monthly), manufacturing Production Wed 20:30 – CPI (annual), PPI Thu 20:30 – Boe Credit Conditions Fri 20:30 – Retail Sales (monthly)
For a continued move to the upside, we must now see Cable close above 1.3277. Should this occur we will look for a move into 1.3386; and if momentum to the upside remains strong we cannot rule out a break of the key resistance at 1.3534. If Cable cannot close above 1.3277, we could see this market 1.3110 retest the important 1.3035 level. If momentum to the downside is strong we cannot rule out a bigger move down to 1.2868 and 1.2720.
USD/JPY – 109.49 ( +138 or +1.28% )
The $/YEN is pushing up against important resistance and this 109.50 level is becoming a major or break area for this market. NOTE: Monday is a public holiday in Japan (Coming of Age Day)
VOLATILITY ALERTS: Wed 11:30 – BoJ Governor Kuroda speaks
For a move to the upside we must now see this market hold above 109.21, on its way to retesting 109.94 before a pause. A strong break and close above this level could then see the $/YEN rally into 110.31, and if momentum is very strong we could see moves to 110.78 and 111.09.
If we cannot hold above 109.21, we could see a fast move lower into 108.31. A break below this level may result in a retest of 107.75 before a pause. Should we break lower however, we could see a strong move down into 107.36.
COMMODITIES GOLD – 1562 ( +11 or +0.71% )
Gold continues to remain strong despite a large reversal last Wednesday.
For a continued move higher we must now see this market hold above 1525, on its way to retesting 1574. A break and close above this level sets the stage for a move to 1605; and if momentum is very strong to the upside we cannot rule out a move to 1620.
If Gold cannot hold above 1525, we will look for a sharp move back down to 1504. This is a pivotal area; and any break below this level sets the stage for a much larger move down to 1485, 1474 and potentially 1460.
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