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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Light Net Long. AUSTRALASIA ASX – 5232
The ASX made a solid move up at the start of the week reaching a high of 5252, which was in line with the highs set back in May of this year.
If the uptrend continues, then we would like to see a solid break with a long bar through 5270 which is the top of the range. If this occurs then we could possibly see 5323 reached.
For a down move to restart, then we would like to see 5181 broken followed by a solid long down bar to break and close below 5125. If this occurs with strong momentum we could see 5088 and possibly 4983.
EUROPE FTSE – 6593
The FTSE continued its move up last week and has closed just below an important level of 6599, which could be the difference between a continued uptrend or a solid resistance level, which could see the start of a reversal back down.
If the upmove is to have any chance this week we would like to see 6555 become a solid level of support, but would prefer for 6599 to be broken early and with solid upward momentum. We will be looking for 6699 to be broken before 6740.
If 6599 proves to be a solid level of resistance and we see a reversal to the downside, then an early break of the 6531 – 6514 area could see 6477 being reached. If the downward momentum is strong then 6358 could be reached.
DAX – 8512
The DAX is clearly taking the lead with its 250+ point rally from last week’s close. After such a strong move it is now potentially in a slowdown phase.
If the DAX is to continue higher and the slowdown does not take effect, then we would like to see a solid break past the high set back in May of 8559, and with solid momentum it could even reach a new range of 8883.
If the slowdown takes full effect and the DAX starts to move lower, then we would like to see an early break back down past 8462. If the momentum is strong with long down bars, then we could see 8339 reached and a possible ambitious level of 8139 which could then become support.
US S&P – 1690
The S&P is really showing big moves up by closing 35 points higher than last week. The big question is, will there be more to come, especially with the FOMC meeting on Wednesday 18th this week?
If the move continues higher, then we would like to see 1693 broken early and a solid long bar close above 1707. If the break occurs early in the week and the news from the FOMC meeting is positive for the markets, then if the previous ranges have any bearing, we might be in for an ambitious target of 1773.
If the FOMC meeting doesn’t provide a positive outlook, a reversal could come into play if 1661 is broken, and the long term uptrend will be tested near 1646. If this level is broken the range will be reached at 1610 and possibly start a new direction in the markets.
NASDAQ – 3180
The NASDAQ continued higher last week and met its range set back in July this year, and even extended past it by 10 points. We will watch the NASDAQ closely this week to be on the lookout for any early moves.
If the new upmove has commenced then we would like to see 3170 hold as strong support, and an early move past 3194. If we then see solid long up bars they could lead the way for an ambitious target of 3275.
If this is it for the NASDAQ and a down move occurs, then we would like to see 3131 broken, followed by a domino effect through the levels 3120, 3104, and 3033, before eventually finding support near 2986.
FOREX AUD.USD – 9242
The AUD has made some ground after dipping into the 80’s territory in previous weeks, and it is continuing to stay above the all important 9083 – 9096 area. This could change as the USD’s fate could be determined on Wednesday by the FOMC meeting. All USD pairs will be watched closely this week.
We are still of the mindset that if a new uptrend starts and continues, we would like to see the 9370 – 9395 area broken with strong upward momentum. Once this occurs we will look at and set upper targets.
If the longer term downtrend restarts, then we would like to see another break below 9196 which could lead the pair back down to 9083. If this level shows no support then 9012 could be next. If this is broken then we could see 8925 being reached.
EUR.USD – 13293
After a big move down in the previous week, the slowdown took full effect, and the EUR decided to take a leg up last week inspite of a lot of talk about possible strengthening of the USD.
If we are to see a the move up continue, then we would like 13285 to provide a solid level of support and for 13347 to be broken early in the week before reaching 13397 and then possibly extending to 13433.
If the previous down move is to continue this week, then we would like to see 13285 broken early followed by a solid break past 13215 which could lead the EUR down to 13104 where it might find some support.
GBP.USD – 15873
Last week the GBP made a further move higher breaking through the key level of 15597 and closed nearly 200 points above it. Our proprietary model FICM is now indicating a potential slowdown of the move.
If the up move continues, then we would like to see a solid move past 15894 early in the week as the FOMC meeting could change the direction of the USD quickly. If the FOMC meeting weakens the USD, then the GBP could find itself completing the range set back in May and extending towards the 16067 – 16100 area very quickly.
If the slowdown takes full effect and 15894 is a solid level of resistance, then we would like to see 15722 broken early in the week followed by a strong down move past 15596 which could see the pair back near 15500. Moves with solid momentum could bring the pair further down to 15420.
USD.JPY – 99.36
A strong move early in the week and a high of 100.61 was not enough to keep the pair buoyant, as the USD weakened and fell below the all important level of 100.52, which could become a difficult level to break unless news comes out that helps strengthen the USD.
If the uptrend is take effect, then a solid break back above 100.52 would allow the pair to reach 101.43. If the momentum mid week is strong then we could see the USDJPY finding 102.51 as its next level.
If the failed attempt at 100.52 is the start of a bigger downward move, then we would like to see another break down past 99.08 followed by 98.64 before we could see 97.56.
We will be covering our analysis of this pair in detail in Wednesday night’s webinar with IC Markets entitled
Market News v Market Behaviour . COMMODITIES GOLD – 1325
GOLD took another leg down last week and moved back into the Standard Deviation Channel, and this time it closed well inside of it. Could this be a signal that the USD will be strengthening over the coming weeks?
If GOLD has any chance of moving higher, then we would like to see a sharp reversal back up through 1391 and a close above 1400 before further upper targets are looked at.
If this is the start of the down move, then we would like 1282 to be broken with solid downward momentum, then followed by another solid break past 1264 before coming to potential support near 1223.
US LIGHT CRUDE OIL – 108.50
With a potential non violent resolution in place between the US and Syria, OIL made a slight move down and closed below 110. OIL is trading in an event driven market at the moment.
For the up move to continue and take another leg up, we would like to see a solid start to the week with strong up moves. If we see a break through 110.23, then we could then see the high of 112.20 tested. If this is broken with long up bars then the levels of 114.06 and 119.11 will be monitored carefully.
If we see a further down move, then we would like to see a break past 107.84 before a potential breach of the upper Standard Deviation Channel, which could then lead OIL to reach 106.43 and possibly 105.93.
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