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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5515 ( -15 or -0.27% )
The ASX remains range bound as of last week so whilst our levels remain unchanged, be mindful we will soon breakout on this range.
We will be discussing this market in more detail in the LIVE CHAT ROOM this week.
VOLATILITY ALERT: Monetary Policy minutes on Tuesday, Unemployment Rate on Thursday.
For a continued move to the upside we would like to see this market break above 5521. Should this occur, we will look for a move higher into 5550. If the ASX can break and close strongly above 5550, we will look for a move to 5589. A strong close above this level may see the ASX rally to 5651 by the end of the week.
If we fail to hold above 5521, we will look for a move back down to 5437. A break below this could result in a move back down into 5373. Further breaks to the downside could see the ASX fall aggressively back down to 5294 and the important 5248-5238 area.
EUROPE
DAX – 10698 ( +339 or +3.27% )
The DAX continues its rally and we are now approaching key levels.
VOLATILITY ALERT: German ZEW Economic Sentiment on Tuesday.
For a continued move to the upside we would like to see the DAX hold above above 10585 – 10601, followed by a break above 10749. Should this occur, we may see another push higher into 10863. Further breaks of this level could see the DAX rally 10983 and 11060 before a pause.
If we fail to hold above 10601, we will look for a move back down to 10475 and should there be further downside, we could see a move lower to 10382. Should momentum remain very strong, we will look for a move down to 10158.
US
SP500 – 2183 ( +4 or +0.18% )
The S&P again set another all-time high last week. We continue to watch this market closely as the potential for a large move (up or down) is building.
We will be discussing this market in more depth in the MEMBER PORTAL.
VOLATILITY ALERT: Building Permits & Monthly CPI on Tuesday, FOMC Minutes on Wednesday, Philly FED Index on Thursday.
For a move higher we must now see the S&P hold above 2176. Should this occur we will look for a move into 2194. A strong break and close above 2194 is likely to see the S&P set its sights for 2200. If we can hold above 2200 this week, we will ultimately then look for a move into 2212. Should momentum remain very strong, 2234 cannot be ruled out.
If we cannot hold above 2176, we will watch for this market to hold 2150. A break below 2150 may see this market retest the previous all-time highs at 2137. A strong break through 2137 could result in a move back down to 2126, and should we break 2126 we cannot rule out a move back down into 2112 by the end of the week.
FOREX
AUD/USD – 0.7648 ( +32 or +0.42% )
The AUD maintained its move higher last week albeit finished off the week poorly. We are at very key levels now in this market.
We will be discussing this market in more depth in the MEMBER PORTAL.
VOLATILITY ALERT: Monetary Policy minutes on Tuesday, Unemployment Rate on Thursday.
For a move higher we would like to see the AUD hold above 0.7617, followed by a break and close above 0.7662. A strong break and close above this level could then see a quick move to 0.7729 before a pause; and if momentum remains strong we will look for strong move into 0.7789.
If we cannot hold above 0.7617, we will look for a move back down to 0.7561. A strong break below this level may result in a move back down into 0.7447, and further breaks lower could see 0.7364 before another potential pause. If momentum remains strong, a break and close below 0.7364 could see a sharp move down to 0.7282.
EUR/USD – 1.1162 ( +80 or +0.72% )
Our comments from last week remain- the EURO continues to be under pressure from various fundamental factors.
NOTE: Monday is a French & Italian Bank Holiday
VOLATILITY ALERT: German ZEW Economic Sentiment.
For a sustained move higher we would like to see 1.1117 hold followed by a break back above 1.1163 and 1.1201. If momentum to the upside remains strong we will look for further moves higher into 1.1248; and if there is no stopping the upside we could see strong moves into 1.1347 and 1.1385.
On the downside, a strong break and close back below 1.1117 could see the EURO head back down to 1.1064 and 1.1033. A strong break below these levels could see a quick move down to 1.0897; and a further break result in a retest of 1.0814. If there is continued downside pressure we will then look for a move down into 1.0743 – 1.0734.
GBP/USD – 1.2916 ( -139 or -1.06% )
Cable is still consolidating the aftermath of BREXIT, and last week we saw some volatility return to this market.
VOLATILITY ALERT: Annual CPI on Tuesday, Unemployment on Wednesday, Retail Sales on Thursday.
For a move to the upside we would like to see this market break and close above 1.3035. A break above this level could see the market head to 1.3227. Should we see a strong break through this level 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 break above 1.3035, we will look for a move back down to 1.2928. A strong break below this level could see a quick leg down into 1.2720. Should we break this level we will watch for a sharp move down to 1.2510; and if momentum is very strong 1.2297 cannot be ruled out.
USD/JPY – 101.28 ( -52 or -0.51% )
The $/JPY also spent the majority of last week going sideways. Things have been quiet on the BoJ front and the $/JPY is still at big levels.
VOLATILITY ALERT: Prelim GDP on Monday.
For a continued move to the upside we would like to see this market break 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 break 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 – 1336 ( 0 or 0% )
Gold ended last week where it started, so our levels remain unchanged; however two of our levels at 1333 and 1355 are now very key. GOLD is at a major inflection point right now. We’ve said it before and will say it again- BE PREPARED!
We could be seeing signs of a major move in GOLD soon to begin…
For a continued move higher we would like to see GOLD hold above 1333, followed by a strong break and close above 1355. Should this occur we could see a move to retest 1375, and a strong break and close above this level could see a fast spike to 1380.
If Gold cannot hold above 1333, we will look for a move back down to 1322. A break below this level may see GOLD trade down to 1309 -1303. Should momentum on the downside remain strong, we could see Gold trade all the way back down to 1297.
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