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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AUSTRALASIA ASX – 5838 ( -255 or -4.19% ) Last week the ASX put in an important reversal and now the ball is in the buyers’ court. Can they rally from here or do we go lower?. VOLATILITY ALERTS: Tue 11:30 – Monetary Policy Meeting Minutes Thu 11:30 – Unemployment Rate Fri 11:30 – Retail Sales (monthly) For a continued move higher we must now see the ASX hold above 5746 followed by a move higher into 5985. Should this occur we will look for a move into 6020. If the ASX cannot hold above 5746, we will look for a move back down to 5590. A strong break and close below this level could see the ASX move lower into 5408; and any break of this level could see a sharp retest lower into 5102.
EUROPE DAX – 12016 ( -757 or -5.93% ) The DAX finds itself at key support to start this week following a big reversal last week. We are watching this market closely for any signs of failure. For a move to the upside we must see the DAX hold above 11875. Should this occur we will look for a retest of 12115. If the DAX can break strongly through this level, we will look for a move into 12384 and if momentum is very strong we cannot rule out a strong move to 12566. If the DAX fails to hold above 11875, we will look for a move back down to 11755 before a pause. Any break below this level however could see the DAX sell-off sharply into 11366, and if momentum is very strong to the downside we cannot rule out a move back down to 11050.
US SP500 – 3037 ( -150 or -4.71% ) The S&P has sold off aggressively off a very big area and the start of this week should prove to be pivotal. We will be discussing this in the MEMBER PORTAL this week. VOLATILITY ALERTS: Tue 22:30 – Retail Sales (monthly) Wed 00:00 – FED Chair Powell Testifies Wed 22:30 – Building Permits Thu 02:00 – FED Chair Powell Testifies Thu 22:30 – Philly FED Manufacturing Index Sat 03:00 – FED Chair Powell Speaks For a move higher, we would like to see the S&P hold above 2998. Should this occur we will look for a move into 3140. A strong break above this level could see this market rally strongly to 3210. If we cannot hold above 2998, we could see this market sell-off into 2902. If momentum to the downside is strong we may see a move lower into 2780; and a close below this level may result in a very fast move down to 2678.
AUD/USD – 0. 6867 ( -100 or -1.44% ) The Aussie Dollar has clipped the 70c handle and since reversed. Will we see more sellers this week?. VOLATILITY ALERTS: Tue 11:30 – Monetary Policy Meeting Minutes Thu 11:30 – Unemployment Rate Fri 11:30 – Retail Sales (monthly) For a move higher, we would first like to see the AUD hold above 0.6762. Should this occur, we will look for a retest of 0.6873, and if upside momentum remains very strong, we may see a push higher into 0.7014 before a pause. If the AUD cannot hold above 0.6762, we could see this market break lower and retest 0.6592. A close below this level could see a move to 0.6456.; and if momentum to the downside is very strong, a move back down to 0.6282 cannot be ruled out.
EUR/USD – 1.1259 ( -31 or -0.27% ) The EURO was sideways for most of last week with a topping pattern; as such our levels remain unchanged. For a move higher we would like to see the EURO close above 1.1335 early in the week. Should this occur we could see a strong move into 1.1453 and any breaks above this level may mean a quick move into 1.1496 before a pause. A strong close above this level however could see the EURO rally strong into 1.1613 by the week’s end. If the EURO cannot close above 1.1335, we could see a fast move down into 1.1249 before a pause. A strong break of this level may result in a move into 1.1201, however any weakness below this level could see a sharp drop into 1.1117 before the week’s end.
GBP/USD – 1.2541 ( -126 or -0.99% ) After starting the week higher Cable closed poorly as markets look forward to this week’s BoE meeting. We will be discussing this market again in the LIVE CHAT ROOM this week. VOLATILITY ALERTS: Tue 16:00 – Claimant Count Change Wed 16:00 – CPI (annual) Thu 21:00 – BoE Interest Rate Announcement Fri 16:00 – Retail Sales (monthly) For a continued move to the upside, we would like to see Cable close above 1.2720, followed by a retest of 1.2868 before a pause. Should this occur we will look for a move to 1.3035 and 1.3161; and if momentum is very strong we could see a re-test of 1.3191. On the downside, should we fail to close above 1.2720, we will be watching the key level at 1.2622 very closely. Any weakness below this level however sets this market up for a move down into 1.2480. If momentum is very strong to the downside we cannot rule out a move to 1.2280 and 1.2080.
USD/JPY – 107.35 ( -223 or -2.04% ) The $/YEN was sold off aggressively on the back of $US weakness. Will we see a rebound this week? VOLATILITY ALERTS: Tue 12:00 – BoJ Interest Rate Announcement Tue 12:00 – BoJ Press Conference For a move to the upside we must now see this market close above 108.31. Should this occur we will look for a retest of 109.21, and if momentum is very strong we could see a move higher into 109.94 and potentially 111.73. If we cannot close above 108.31, we could see a move lower into 106.52. A break below this level may result in a sharp move lower into 105.50; and any further breaks to the downside may see a bigger move into 104.97.
GOLD – 1729 ( +45 or +2.67% ) Gold continues to base in a sideways range and is again above 1700. Can this market breakout to the upside? For a continued move higher we must now see this market hold above 1724. Should this occur we could see a strong move to 1755; and any break of this level could see a stronger move to 1786. If Gold cannot hold above 1724, we will look for a move back down to 1674. A break below this level could see a move lower into 1648; and if momentum is very strong to the downside we could see a move to 1605.
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