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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6092 ( +37 or +0.61% )
The ASX has broken out to higher prices and the question now is can this market continue to rally from here?
VOLATILITY ALERTS:
Tue 11:30 – Monetary Policy Meeting Minutes
Wed 23:30 – RBA Governor Lowe Speaks
For a continued move higher we must now see the ASX hold above 6070. Should this occur we will look for a move into 6140. A strong break above this level could see a strong move into 6206 by the week’s end.
If the ASX cannot hold above 6070, we will look for a move back down to 6010. A strong break and close below this level could see the ASX retest 5985, and if downside momentum is strong we could quickly see a further move all the way back down into 5921.
EUROPE
DAX – 13065 ( +274 or +2.14% )
We hope you guys saw the DAX ‘pop’ on Thursday! The market rallied almost 400 points and has now come into a very key area. We will be discussing this market in the LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Tue 06:00 – ECB President Draghi Speaks
Wed 23:30 – ECB President Draghi Speaks
Thu 19:45 – German Buba President Weidmann Speaks
Fri 17:30 – German Flash Manufacturing PMI
Fri 17:30 – German Flash Services PMI
For a continued move to the upside we must now see the DAX hold above 13050. Should this occur we will look for a strong move into 13205, and if momentum remains strong a push back higher into 13301.
If the DAX fails to hold above 13050, we may see a retest back down into the key level of 12921.A close below this level is likely to see a retest of 12714; however if momentum is very strong to the downside we cannot rule out a move to 12566.
US
SP500 – 2777 ( -1 or -0.04% )
The S&P spent the majority of last week in a sideways range despite an increase in interest rates. As such, our levels remain unchanged.
VOLATILITY ALERTS:
Tue 22:30 – Building Permits
Wed 22:30 – Current Account
Wed 23:30 – FED Chair Powell Speaks
Thu 00:00 – Existing Home Sales
Thu 22:30 – Philly FED Manufacturing Index
For a move higher we would like to see the S&P close and hold above 2760. Should this occur we will look for a retest of the key 2785 level. A strong break and close above this level could see another retest of 2802 and 2808, and if momentum remains strong to the upside we cannot rule out a move to 2836.
If we cannot hold above 2760, we could see this market continue to sell-off into 2736 before a pause. If momentum to the downside is strong we may see a move lower into 2704; and a close below this level may result in a move down to 2680 and 2660.
FOREX
AUD/USD – 0.7442 ( -155 or -2.04% )
The Aussie dollar was sold off aggressively last week and this is setting up to be a very key week indeed. We will be discussing this in more detail in the LIVE CHAT ROOM.
VOLATILITY ALERTS:
Tue 11:30 – Monetary Policy Meeting Minutes
Wed 23:30 – RBA Governor Lowe Speaks
For a move higher we would like to see the AUD close above 0.7447, followed by a break and close above 0.7489. A strong break and close above this level could see a quick move to 0.7561 before a pause; and if momentum remains strong we will look for a move into 0.7617.
If we cannot close above 0.7447, we will look for a move back down to 0.7364. A strong break below this level may result in a move back down into 0.7282 before another potential pause. Any subsequent breaks of this level however may result in a very fast move down to 0.7229.
EUR/USD – 1.1607 ( -161 or -1.37% )
The market has called the ECB’s bluff and we have seen the EURO sell off aggressively following the ECB announcement last Thursday. We will be discussing the impact of this in more detail in the LIVE CHAT ROOM.
VOLATILITY ALERTS:
Tue 06:00 – ECB President Draghi Speaks
Wed 23:30 – ECB President Draghi Speaks
Thu 19:45 – German Buba President Weidmann Speaks
Fri 18:00 – Euro area Flash Manufacturing PMI
Fri 18:00 – Euro area Flash Services PMI
For a sustained move higher we would like to see the EURO close and hold above 1.1613 this week. Should this occur we could see a strong move into 1.1738 before another pause. A strong break above 1.1738 could result in a fast move to 1.1822.
If the EURO cannot close above 1.1613, we could see a fast move down into 1.1496. A break below this could be followed by another quick move into 1.1453; and should momentum remain strong we cannot rule out a move to 1.1347.
GBP/USD – 1.3281 ( -126 or -0.94% )
The Pound closed the week slightly lower and is now at a very key level here at 1.3277.
VOLATILITY ALERTS:
Thu 21:00 – BoE Interest Rate Announcement
Fri 06:15 – BoE Governor Carney Speaks
For a continued move to the upside, we would like to see Cable close and hold above 1.3309. Should this occur we will look for the Pound to rally into 1.3534 before a pause; however a strong break of this level could see a retest of 1.3875.
If we cannot close above 1.3309, we will look for a quick move down into 1.3111. A break of this level may result in a retest of 1.3035; however any subsequent break could see this market sell-off quickly into 1.2868. Should the downside momentum continue, we cannot rule out a move to 1.2720.
USD/JPY – 110.66 ( +114 or +1.04% )
The $/YEN found buyers last week as the interest rate announcement brought the $US bulls to the table once again.
VOLATILITY ALERTS:
Wed 23:30 – BoJ Governor Kuroda Speaks
For a move to the upside we must now see this market close strongly through 111.09. A strong break and close above this level could then see the $/YEN rally into 111.73, and if momentum is extremely strong to the upside 112.68 cannot be ruled out.
If we cannot close above 111.09, we will look for a retest of 109.94. A break below this level may result in a retest of 109.21, and if the downside remains strong we could see a strong sell-off into 108.31.
COMMODITIES
GOLD – 1280 ( -18 or -1.39% )
GOLD was obliterated on Friday selling off over 20 points! It’s fair to say that this market is also at very critical levels here.
For a continued move higher we must now see this market close above 1285 followed by a retest of 1294. Should this occur we will look for a full fade back into 1303. A strong break past this level may mean an even stronger move into 1313.
If however Gold cannot close above 1294, we we will look for a move back down into the strong area of support between 1278-1276. This is a very key area and any subsequent breaks below this may result in a sharp move lower to 1266; and if momentum is very strong to the downside we cannot rule out moves to 1257 and 1247 very quickly.
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