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 – 5829 ( +73 or +1.27% ) The ASX managed to close higher last week but sellers have not disappeared just yet. VOLATILITY ALERTS: Tue 11:30 – Monetary Policy Meeting Minutes Thu 11:30 – Unemployment Rate For a continued move higher we must now see the ASX hold above 5823. A strong close above this level could see a move to 5921 and 5985. Should we break through 5985 we may see a quick retest of 6000; and if momentum is very strong we cannot rule out a move to 6140. If the ASX cannot hold above 5823, we will look for a move back down to 5777 and 5746. A strong break and close below this level could see the ASX test 5703, and if momentum is strong we could quickly see a further move down into 5668. EUROPE DAX – 12446 ( +264 or +2.17% ) The DAX was the strongest performer amongst our list last week and this market is now approaching our key upper levels. We will be discussing this in more detail in the LIVE CHAT ROOM . VOLATILITY ALERTS: Tue 19:00 – German ZEW Economic Sentiment Fri 21:30 – German Buba President Weidmann Speaks For a continued move to the upside we must now see the DAX hold above 12384. Should this occur we will look for a move 12566. A strong break of this level could then see the DAX rally quickly to 12640; and if momentum to the upside is very strong we cannot rule out a move to 12714. If the DAX fails to hold above 12384, we could see a move back down into 12205; with a break below paving the way for a move down into 12115 before a pause. A break below this level however could result in a quick move into 12040, and if momentum to the downside is very strong we cannot rule out a move back down to 11875.
US SP500 – 2658 ( +53 or +2.03% ) The S&P managed to grind higher last week but faced stiff resistance at many of our key levels. We will discuss the impact of this in the LIVE CHAT ROOM this week. VOLATILITY ALERTS: Mon 22:30 – Retail Sales (monthly) Tue 22:30 – Building Permits Thu 22:30 – Philly Fed Manufacturing Index For a move higher we would like to see the S&P hold above 2638. Should this occur we will look for a retest of the key 2660 level. A strong break and close above this level could see another retest of 2680, and if momentum remains strong to the upside we cannot rule out moves to 2720 and 2736. If we cannot hold above 2638, we could see this market continue to sell-off into 2590 before a pause. A break below this level however could mean this market retraces lower into 2562; and a close below this level may see a retest of 2540.
FOREX AUD/USD – 0.7761 ( +87 or +1.13% ) The Aussie Dollar saw a strong break to the upside last week however Friday saw the emergence of sellers re-enter this market. VOLATILITY ALERTS: Tue 11:30 – Monetary Policy Meeting Minutes Thu 11:30 – Unemployment Rate For a move higher we must now see this market hold above 0.7729; followed by a retest of 0.7833.Should this occur we will look for this market to retest 0.7903; and if momentum is very strong we cannot rule out a move back up to 0.7988 and 0.8033. If we cannot hold above 0.7729, we are likely to see a move lower into 0.7662. Should the downside momentum continue we could see a quick move into 0.7620; and if selling pressure is strong a move into 0.7600 cannot be ruled out. EUR/USD – 1.2330 ( +49 or +0.4% ) The EURO continues to remain in a tight sideways range and as such our levels remain unchanged. VOLATILITY ALERTS: Tue 19:00 – German ZEW Economic Sentiment Wed 19:00 – Final CPI (annual) Fri 21:30 – German Buba President Weidmann Speaks For a sustained move higher we would like to see the EURO hold above 1.2266 followed by a strong break through 1.2360. Should this occur, we will then look for this market to test 1.2420; and if momentum is very strong we could see a push higher into 1.2520. If the EURO cannot close above 1.2266, we could see a move back down 1.2165 before a pause. This is an important level and any subsequent strong break and close below this level may see the EURO sell-off further into 1.2042 this week.
GBP/USD – 1.4238 ( +150 or +1.06% ) Cable is again attempting to breakout to the upside and we will know this week whether this third breakout attempt is successful. We will discuss this in more detail in the MEMBER PORTAL this week. VOLATILITY ALERTS: Tue 18:30 – Unemployment Rate Wed 18:30 – CPI (annual) Thu 18:30 – Retail Sales (monthly) For a move to the upside we would like to see the GBP/USD hold above 1.4194. A hold above this level followed by a subsequent break and close above 1.4305 could result in a quick move into 1.4469 and 1.4502; and if momentum is very strong to the upside 1.4630 cannot be ruled out. If we cannot hold above 1.4194 we could see a quick move down into 1.4075. A continued sell-off may see another move lower into 1.3875 before a pause. However should we see a strong break below this level we may see Cable quickly trade down to the important 1.3743 – 1.3725 area. USD/JPY – 107.36 ( +42 or +0.39% ) The $/YEN attempted to break our key 107.75 level but failed following friday’s close, ending the day right on our level below at 107.36. VOLATILITY ALERTS: Wed 09:50 – Trade Balance For a continued move to the upside we would now like to see the market hold above 107.36. Should this occur we will then be looking for a quick move into 107.75. A strong break and close above 107.75 could then see a quick move into 108.31 before a pause. If momentum is very strong this week, we cannot rule out a move to 109.21 by the end of the week. If however the USD/JPY cannot hold above 107.36, we could see a move back down into 106.30 and subsequently 105.79. A break below this level could then see the USD/JPY trade quickly down to 104.97 before a potential pause.
COMMODITIES GOLD – 1345 ( +12 or +0.9% ) GOLD rallied early in the week with another attempt to break highs, failing once again at 1365. For a continued move higher we must now see this market hold above 1333. Should this occur we will look for a retest of 1355, and a close above this level could see further upside into 1365. If momentum remains very strong, we could see a big push into 1374 and 1394. If Gold cannot hold above 1333, we will look for a strong move back down into last week’s close at 1322. A strong break below this level could see GOLD sell off further into 1303, and if momentum is strong to the downside we could see a sharp move down into 1294.
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