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 ASX – 5753 ( +38 or +0.66% ) The ASX remains range bound however this market continues to show signs of holding and rallying. Will we see a rally this week? We will be discussing this market exclusively in the LIVE CHAT ROOM . VOLATILITY ALERTS: Tue 11:30 – Monetary Policy Meeting Minutes Thu 11:30 – Unemployment Rate Thu 11:30 – NAB Quarterly Business Confidence For a continued move higher we would like to see the ASX hold above 5746, followed by a strong break and close above 5777. Should this occur we will look for a retest of 5823, and a strong close above this may result in a move to 5875. If momentum is strong we will then look for a rally into 5921 and 5925. If the ASX cannot hold above 5746, we are likely to see another retest of 5671. A close below this level may result in more selling into 5606 and if momentum is very strong 5582 cannot be ruled out.
EUROPE DAX – 12647 ( +232 or +1.87% ) The DAX recovered last week as we saw a week-long of buying. We are now approaching one of our key levels of 2017. VOLATILITY ALERTS: Tue 19:00 – German ZEW Economic Sentiment Thu 21:45 – ECB Interest Rate Announcement – LIVE TV Thu 22:30 – ECB Press Conference For a continued move to the upside we must now see the DAX hold above 12536. Should this occur we will look for a retest of the important 12714 level before a potential pause. If we can break and close strongly through 12714 we will then look for a move to 12880 – 12900. If momentum to the upside is very strong, a move to new all-time highs into 13205 cannot be ruled out. If the DAX fails to hold above 12536, we are likely to see a move lower into 12384. A strong break and close of this level could see the DAX trade down into 12198; and if momentum is strong a move into 12044 cannot be ruled out.
US SP500 – 2458 ( +33 or +1.36% ) The S&P is at all-time highs and as we have mentioned many times in the past this was to be expected. The bull market is not over yet. VOLATILITY ALERTS: Wed 22:30 – Building Permits Wed 22:30 – Housing Starts For a move higher we would like to see the S&P hold above our key level at 2440, followed by a strong break and close above 2465. Should this occur we anticipate further upside over the following week into 2477 before a pause. If momentum is very strong we could see a move to 2511 before the week is over. If we cannot hold above 2440, we will look for a move to retest strong support at 2431. A strong break below this level could see the S&P trade back down to 2418 before another pause.
FOREX AUD/USD – 0.7825 ( +221 or +2.91% ) The Aussie Dollar has rocketed, reaching last week’s target of 0.7833; and is now at levels not seen since April last year. We will be discussing this in more detail in the MEMBER PORTAL . VOLATILITY ALERTS: Tue 11:30 – Monetary Policy Meeting Minutes Thu 11:30 – Unemployment Rate Thu 11:30 – NAB Quarterly Business Confidence For a move higher we must now see this market hold above 0.7729, followed by a strong break and close above 0.7833. Should this occur we will look for a retest of 0.7903. If momentum is very strong on the upside our next level higher is 0.8034. On the downside, a break of 0.7729 could result in a retest of 0.7677 – 0.7662 before a pause. Should this market break 0.7662 however, we may likely see in a move back down to 0.7612. If momentum remains strong to the downside, a move to 0.7561 could take place.
EUR/USD – 1.1466 ( +66 or +0.58% ) The Euro is still inching higher on the back of $US weakness and this week all eyes will be glued to what Mario Draghi has to say. We will be discussing this in more detail in the LIVE CHAT ROOM . VOLATILITY ALERTS: Mon 19:00 – Final CPI (annual) Tue 19:00 – German ZEW Economic Sentiment Thu 21:45 – ECB Interest Rate Announcement – LIVE TV Thu 22:30 – ECB Press Conference For a sustained move higher we would like to see the EURO hold above 1.1453 on its way to testing 1.1496 again. Should this occur we could see a very strong move to 1.1613 before a pause. If the EURO cannot hold above 1.1453, we will watch for a move back down to 1.1347. A break below this level could see this market trade down to 1.1281, and further breaks to the downside may result in a move to 1.1201.
GBP/USD – 1.3102 ( +217 or +1.68% ) The Pound continues to confirm our scenario shown last month and mid-week we saw the start of another leg higher. VOLATILITY ALERTS: Tue 18:30 – CPI (annual) Tue 18:30 – PPI Input (monthly) Tue 23:30 – BoE Carney Speaks Thu 18:30 – Retail Sales For a continued move to the upside, we would like to see Cable hold above 1.3035 as mentioned last week. Should this occur we will look for the Pound to rally into 1.3277 before a pause. A break of this level is very likely to see the GBP/USD test 1.3309, and if momentum is very strong we will look for a move to 1.3534. If we fail to hold above 1.3035, we will look for a move back down to 1.2868. A break below this level could then see this market trade back into 1.2720 before a pause. If momentum is strong and we break and close below 1.2720, we could see a sharp move lower into 1.2600.
USD/JPY – 112.53 ( -136 or -1.19% ) The YEN continues to grind higher and is now in a very interesting position given the ‘relative’ weakness of the $US dollar. We will be discussing this in more detail in the LIVE CHAT ROOM this week. NOTE: Monday is a public holiday (Marine Day) VOLATILITY ALERTS: Thu 12:30 – BoJ Interest Rate Announcement Thu 12:30 – Monetary Policy Statement Thu 12:30 – BoJ Outlook Report Thu 16:30 – BoJ Press Conference For a continued move to the upside we must now see this market hold above 111.73. Should this occur we will look for a retest of 112.88. If we can break and close above this level, we would see a strong move into 113.87 – 114.08, and if momentum is very strong a move higher into 114.52 cannot be ruled out by week’s end. If we cannot hold above 111.73, we will look for a retest of 111.09 on the downside. A break and close below this level could see the YEN fall lower into the key area between 110.10 – 109.94. If momentum remains strong, we cannot rule out a move to 109.21.
COMMODITIES GOLD – 1228 ( +15 or +1.24% ) GOLD posted a very strong move on Friday as it continues to rally following a KEY swing low posted on Monday. Can this market rally higher? For a continued move higher we want to see this market hold above 1222, and break strongly through 1230. Should this occur we will look for a move higher back up to 1247. A break of this level could see GOLD rally higher back into 1257. If Gold cannot hold above 1222, we will look for a move lower into the very important 1206 level again. We will then need to see a strong break and close below this level for a move lower into the 1187-1181 area.
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