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 – 5769 ( +84 or +1.48% ) The ASX managed to gain over 1% last week with a small move to the upside. The question now will be can this market continue to rally from here? We will be discussing this market in more detail in the MEMBER PORTAL . For a continued move higher we would like to see the ASX hold above 5746, and break strongly 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, a break below could see a move lower to downside a move lower into 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 – 12758 ( -16 or -0.13% ) The DAX continues to remain a tight narrow range and our key level at 12714 continues to play its role on an almost daily basis. VOLATILITY ALERT: German Flash Manufacturing and Services PMI on Friday. For a continued move to the upside we must see the DAX hold above 12714. Should this occur we could see a strong move 13110, and if momentum is very strong to the upside we cannot rule out a move to 13205. If the DAX fails to hold above 12714, we will look for a move back down to 12536. A strong break below this level is likely to see a push further down into 12384.
US SP500 – 2433 ( +3 or +0.12% ) After last week’s rate hike the S&P remains practically unchanged and so our levels and commentary remain unchanged. VOLATILITY ALERT: Current Account on Tuesday, Existing Home Sales on Wednesday, New Home Sales on Friday. For a move higher we would like to see the S&P hold strongly above our key level at 2418. Should this occur and we see a strong break and close above 2440, we anticipate further upside over the following week. Our next upside targets remain at 2465 and 2477. If we cannot hold above 2418, we will look for a move to retest strong support at 2400. A strong break below this level could see the S&P spike to 2392, and a close below this level could see this market trade 2386 by week’s end.
FOREX AUD/USD – 0.7616 ( +86 or +1.14% ) The Aussie Dollar continues to rally into our key areas and we saw this towards the end of last week, failing to close convincingly above 0.7617 three days in a row. We will be discussing this market in more detail in the MEMBER PORTAL . VOLATILITY ALERT: RBA Governor Lowe speaks on Monday, Monetary Policy Minutes on Tuesday. For a move higher we must now see this market close and hold above 0.7617. Should this occur we will look for a retest of 0.7677. A strong break and close above this key level could see this market rally to 0.7729, and if momentum is strong our next level higher is 0.7833. On the downside, we are monitoring the 0.7617 level as an area for a pause, however a strong break below will likely result in a move back down to 0.7561. If momentum remains strong to the downside, we could quickly see 0.7489.
EUR/USD – 1.1194 ( -2 or -0.02% ) The EURO is now at a very key level. We urge you to look at this week’s chart and take not of the action as we could be seeing a big move very soon, so GET READY. We will discuss this in more detail in the MEMBER PORTAL . VOLATILITY ALERT: Euro Area Flash Manufacturing and Services PMI on Friday. For a sustained move higher we would now like to see the EURO close and hold above 1.1201. Should this occur we will then look for a move to 1.1248 before a pause. However a strong break above this level could see a quick move into 1.1347. Should momentum remain strong to the upside, we cannot rule out a move into 1.1380 this week. If the EURO cannot hold above 1.1201, we will watch for a move back down to 1.1117. A break below this level could see this market trade quickly down 1.1083 cannot be ruled out; and if momentum remains very strong we could see a sharp move down to 1.1033 and 1.0977.
GBP/USD – 1.2774 ( +32 or +0.25% ) The Pound has been marginally higher since the election. Theresa May appears safe for now but as we know things can change very quickly! VOLATILITY ALERT: Carney speaks on Tuesday. For a continued move to the upside, we would like to see Cable remain above our key level of 1.2720, followed by a strong break through 1.2802. A strong break through this level could see the GBP/USD trade to 1.2868, and should momentum remain very strong we will look for a strong move back into 1.3035. On the downside, should we break and close strongly below 1.2720, we could see the GBP/USD move back into 1.2510. A break below this level may result in a move to 1.2458, and further breaks to the downside may see a sharp move into 1.2297.
USD/JPY – 110.86 ( +54 or +0.49% ) Last week we informed members early to watch out for a mid week reversal and this is exactly what we saw, with the YEN posting a key 180 point reversal on Thursday. We will be discussing this market in more detail in the LIVE CHAT ROOM . For a continued move to the upside we must now see this market break and close above 111.09. Should this occur we will look for a move back up to 111.73, and a retest of the key level at 112.22. Should we break and close above 112.22 we could 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 break back above 111.09, the YEN may see further downside into a key area between 110.10 – 109.94. A strong break and close below 109.94 may result in further downside into 109.21, and if downside momentum is very strong this week 108.31 cannot be ruled out.
COMMODITIES GOLD – 1253 ( -25 or -1.96% ) GOLD has closed below another key level at 1257 and this should now be watched closely. A move higher through this area could see the start of a new rally in Gold. For a continued move higher we would like to see this market hold above 1257. Should this occur we will look for a move higher back into our key 1276 – 1278 area, and if momentum is very strong to the upside we could see a retest of 1294. If Gold cannot hold above 1257, we will look for a move back down into 1247. A strong break below this level could see a move down into 1235, and if momentum is very strong to the downside we cannot rule out a move to 1222.
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