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do not publish updates of such changes.
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We may take multiple trades throughout the week. Currently Trade View is
Net Short. AUSTRALASIA ASX – 5506 ( – 21 or – 0.38% )
The ASX fell away early in the week but was able to find support near the 5415 area to bounce 70 points to close on 21 points lower than last weeks close. As we are back near previous levels our comments from last week remain the same.
For the up move to continue and possibly start a new trend up we would like to see a solid break and close past 5562 with a long up bar before a further push towards 5732 is made.
If we are to see another attempt at a downward move then we would like to see 5461 broken early in the week followed by 5447 and 5415. We will then be watching the all important level of 5367. It will all depend on how quick the downside moves progress if this level is to be broken.
EUROPE FTSE – 6692 ( – 171 or – 2.49% )
The FTSE found resistance again at the 6900 levels falling back down following Banking concern in Europe.
For the up move to restart we would like to see 6632 become a solid level of support before a push higher towards 6761 is made. Once this level is broken we could see 6790 tested and broken. There will then be a lot of resistance areas past this point and they are: 6852 – 6878 – 6904.
For a downward process to continue we would like to see 6696 hold as a strong resistance level pushing the FTSE back down past 6632 with a long down bar. Once this is achieved we could see temporary support between 6550 – 23. If this does not hold then 6459 could be seen.
DAX – 9673 ( – 350 or – 3.49% )
We sound like a broken record when we talk about the DAX:
As mentioned previously “With continuous new all time highs being reached and then failing to hold, it is important to understand this behaviour before taking part in that direction.” We will be monitoring the DAX behaviour over the next few weeks to gauge the market sentiment overall.
For the upmove to restart we would like to see 9579 hold as a strong level of support pushing the DAX back up towards 9826 and then 9949 before another attempt is made at breaking the area between 10021 – 75.
If the DAX takes another aggressive leg down then we would like to see 9579 broken early with a long solid down bar. This could then lead the Index down towards 9402 with the potential to reach 9321.
US S&P – 1968 ( – 16 or – 0.81% )
The S&P took a breither last week and moved lower. The recent pattern of 2 down days and then rally was interrupted by another down day immediately after an up day. Any slight uncertainty will cause this type of behaviour.
If Fridays bar is an early sign for this week and we see a move higher, then we would like to see 1977 broken early in the week followed by the all time highs of 1985. If the up move has momentum then the S&P could reach the next projected level of 1993 – 2002 over the next few weeks.
For the down move to restart then we would like to see a solid break back down past 1964 with a long down bar reaching the area between 1950 – 47. Once this area is broken 1938 and 1922 will be the next 2 levels we will be watching.
FOREX AUD.USD – 9389 ( + 30 or + 0.32% )
Another break above 9423 with a high of 9456, but again that’s where it ended as it fell back down below 9423 and back into the range.
“It is still range bound and the 2 FICM levels we are looking for before a significant move occurs are 9203 and 9423. Until these 2 key levels are broken our comments from last week remain the same.”
For the move higher to continue we would need to see an early break and close past 9423 and 9460 before the potential to reach 9539 could occur. Once this is reached the AUD could start a new phase and potentially new up trend.
If the USD finds strength and 9423 proves to be difficult to stay above, then a move past 9333 could reach 9287. If the downward momentum is strong then we would like to see a strong break and close past 9287 reaching 9203 were the AUD might find temporary support.
EUR.USD – 13607 ( – 1 or – 0.01% )
Another early move higher for the EUR, but then back down.to close 1 point lower from last week. Therefore our comments remain the same as last week.
If the EUR was to strengthen then we would like to see the area between 13637 – 69 broken early followed by a further break past 13713. Once this level is also broken we could see the EUR back near 13749- 79.
For the EUR to restart a move down we would like to see an early break past 13589 reaching 13513. Once this occurs we could see the area between 13482 – 72 reached. If the momentum is strong then we could see 13392.
GBP.USD – 17120 ( – 43 or – 0.25% )
The GBP slowed down last week and moved sideways to close slightly lower. Some potential divergence forming. As not much movement occurred, our comments from last week will remain.
For the GBP to move higher we would like to see solid support near 17105 which could then lead the pair towards 17283 and eventually 17324.
For the GBP to move lower then we would like to see a solid long down bar break and close below 17064. Once this occurs further downside moves past 17000 could reach 16935.
USD.JPY – 10133 ( – 79 or – 0.77% )
Another break below 10152 and now the downward process is in its middle phase. We will be watching the equity markets to gauge potential direction. As we have previously mentioned the USD.JPY is definitely in limbo as any breaks are met with either support or resistance pushing it back into the range between 10152 and 10270. Friday’s up move on the equity markets could be enough to bring it back into the range.
For the USD to move higher we would like to see a strong break above 10166 followed by a strong close through 10270 pushing towards 10309. If the momentum is strong then we could see 10356 reached. This level will then need to be broken with a long solid up bar before we see 10410.
If the down move is to continue we would like to see 10152 – 69 area hold as a strong level of resistance. If the downward momentum then continues we could see 10052 tested. If 10052 is then broken with a long solid down bar we could see 9977.
COMMODITIES GOLD – 1338 ( + 19 or + 1.44% )
Markets going down, GOLD going up? There are a few murmurs in the trading circles that the FED might have lost control?
For the upward move to continue higher we would like to see the area between 1326 – 1330 hold as a solid level of support before pushing towards 1351 – 59. Once this area is broken the 1367 – 77 area will play an important role in defining the next move.
If the down move restarts then we would like to see an early break past 1326 -30 area reaching 1315. If the downward momentum is strong then we could see 1296 reached and possible short term support near 1285.
US LIGHT CRUDE OIL – 100.64 ( – 324 or – 3.12% )
Another strong down move for OIL passing levels that were formed before the IRAQ issue. The markets seem to have totally discounted any further action in Iraq. As mentioned previously “….
Caution should be taken if you decide to chase explosive moves.” NOTE: potential bullish divergence formed.
For the upmove to restart we would like to see an early break back above 101.16 followed by a strong push past 102.36. If the momentum is strong then we would like to see a strong up bar break and close past both 103.48 and 104.06 before further moves are possible.
If the move lower continues then we would like to see a strong break past 100.19 followed by a break and close past 99.42. This could then lead OIL to reach 98.21 with the possibility for support near 97.21.
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