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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5430 ( -35 or -0.64% )
Another relatively muted week on the ASX saw the market drifted slightly lower into Friday. With another quiet week on the calendar we will continue to look for our levels below to tell us where this market is headed.
VOLATILITY ALERT: Monetary Policy Minutes on Tuesday, Unemployment numbers on Thursday.
For a continued move to the upside we would like to see this market close above 5437. If this were to happen, we could see a move into 5504 and 5521. A strong break above these levels could see a move to retest the all important 5550 level, and if momentum remains very strong we could see the ASX rally to 5664 by the end of the week.
If we fail to close above 5437, we will look for a move back down to 5373. A break below this could result in a move back into 5294, and further breaks to the downside could see the ASX head to 5238. If we see a complete reversal to the downside, we will watch 5161 as a potential area of support.
EUROPE
DAX – 10589 ( +108 or +1.03% )
The DAX closed strongly into Friday, however remains right near our key level of 10585.
VOLATILITY ALERT: Draghi speaks on Monday, ECB Interest Rate Announcement followed by Press Conference on Thursday.
For a continued move to the upside we would like to see the DAX close above above 10585, 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 close above 10585, 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 further move down into 10158.
US
SP500 – 2133 ( -19 or -0.88% )
A midweek sell-off saw the S&P all but test our key level at 2112 before a big reversal on Thursday. The question now remains- are the lows in or is there more downside to come?
We will be discussing this market again in more depth in the LIVE CHAT ROOM this week.
VOLATILITY ALERT: CPI on Tuesday, Building Permits on Wednesday, Philly FED Manufacturing Index on Thursday.
For a move higher we must now see the S&P break and close above 2137. A strong close above this level could see a retest of 2160, and further breaks to the upside may see a strong move to 2176 before a pause. Should we break 2176 we will look for a move back up into the all-time highs at 2194. If this market breaks and closes above 2194, we cannot rule out a move to 2212 by the end of the week.
If we cannot close above 2137, we will look for a move back down to 2126. A break and close through 2126 may result in a retest of 2112, with the potential for a quick spike down to 2108. Should we break 2108 watch out, this market could move much lower.
FOREX
AUD/USD – 0.7615 ( +29 or +0.38% )
The Aussie dollar again started the week poorly but finished strongly. As this market is still trading in a tight range our levels have not changed.
VOLATILITY ALERT: RBA Gov Lowe speaks on Tuesday, Monetary Policy Minutes on Tuesday, Unemployment numbers on Thursday.
For a move higher we would like to see the AUD close above 0.7617, followed by a strong break and close above the 0.7662 – 0.7683 region. A strong break and close above these levels 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 close 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 – 1.0972 ( -228 or -2.04% )
We have been warning for many weeks of a potential for the EURO to move lower and we saw this last week. The EURO is now in a precarious position as we await to see whether this market can hold firm here, or we see further downside.
VOLATILITY ALERT: Draghi speaks on Monday, ECB Interest Rate Announcement followed by Press Conference on Thursday.
We will be discussing this market in the MEMBER PORTAL this week, and covering the ECB Interest Rate Announcement LIVE during LIVE TV.
For a sustained move higher we would now like to see the EURO break strongly above 1.0977. A break above above this level could see the EURO quickly head to 1.1033. If we see continued upside we will then look for a move to 1.1117, and should momentum remain very strong, we will look for a move to 1.1201.
On the downside, if the EURO cannot break and close above 1.0977 we will look for a further move down to 1.0902 and 1.0887. A break and close below these levels could see the EURO continue to move lower to 1.0814 before a pause. Should momentum remain very strong to the downside, 1.0738 cannot be ruled out.
GBP/USD – 1.2189 ( -230 or -1.85% )
The GBP/USD has been consolidating following the Flash Crash a fortnight ago, and was again under pressure last week.
For a move to the upside to begin, we would like to see a strong break and close above 1.2297. If the move higher follows through we could see a retest of 1.2480. A strong break and close above this level should see a retest of 1.2622, and if momentum remains strong a move to 1.2720 becomes very possible.
On the downside, we are not watching two key areas at 1.2100 and further below between 1.1896 -1.1880.
We will be providing special coverage of this market in great detail this week in our MEMBER PORTAL.
USD/JPY – 104.16 ( +122 or +1.19% )
The $/JPY continued its move higher last week following increased speculation the FED will raise rates.
For a continued move to the upside we would like to see this market hold above 103.99. Should this occur we 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 hold above 103.99, we will look for a move back down to 103.21. A strong break and close below this level could then see 102.29 before a pause. Should we break this level with strong momentum, we may see the $/JPY fade all the way back down to 100.61.
COMMODITIES
GOLD – 1250 ( -6 or -0.48% )
Like Cable, GOLD has been consolidating the strong move down we saw a fortnight ago and remains in a tight range. As such our levels have not changed.
We will discuss this market in more detail throughout the week in our MEMBER PORTAL.
For a continued move higher we would like to see GOLD break and close back above 1258, followed by an immediate retest of 1276. A strong break and close above 1276 could see this market head higher to 1294 and 1303 before the end of the week.
If Gold cannot break and close above 1258, we will look to see this market hold above 1247. However a break below this level may result in more downside for Gold- with the potential for a fast move down to 1222. Should momentum remain strong, we will watch for a move to 1210 before a pause.
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