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 AUSTRALASIA ASX – 5978 ( ) -30 or -0.50% The ASX continued its sideways consolidation last week as we head into a key week for the Australian market. VOLATILITY ALERTS: Tue 11:30 – Monetary Policy Minutes Thu 11:30 – Unemployment Rate For a continued move higher we must now see the ASX hold above 5985. Should this occur we will look for a move to 6070, and if momentum is very strong we could see a move back up into 6140. If the ASX cannot close above 5985, we will look for a move back down to 5921. A strong break and close below this level could see the ASX test 5823, and if momentum is strong we could quickly see a further move down to 5777.
EUROPE DAX – 12392 ( ) +20 or +0.16% Like the ASX, the DAX also spent finished the week where it started having only managed to close 20 points higher. Will we see a a breakout this week? VOLATILITY ALERTS: Tue 21:00 – German ZEW Econominc Sentiment Thu 19:30 – German Flash Manufacturing PMI Thu 19:30 – German Flash Services PMI Thu 20:00 – German IFO Business Climate For a continued move to the upside we must now see the DAX close above 12384. Should this occur we will look for a move back up to 12566. A strong break of this level could then see the DAX rally quickly to 12714. If the DAX fails to close above 12384, we will look for a move back down to 12115. Below this we could see a move into 11875, and should the DAX continue to sell off we cannot rule out a move into key support between 11790 – 11755.
US SP500 – 2750 ( ) -33 or -1.19% The S&P is at a critical level as we enter this important week. We will be discussing the impact of this in the this week. LIVE CHAT ROOM VOLATILITY ALERTS: Wed 23:30 – Current Account Thu 01:00 – Existing Home Sales Thu 05:00 – FOMC Interest Rate – LIVE TV Thu 05:30 – FOMC Press Conference – LIVE TV Fri 23:30 – Core Durable Goods Orders For a move higher we would like to see the S&P hold above 2736. Should this occur we will look for a move back up into 2808. A strong break and close above this level could see the S&P rally quickly into 2850, and if momentum remains strong to the upside we cannot rule out a moves to 2870. If we cannot hold above 2736, we could see this market continue to sell-off into 2694 and 2688 before a pause. A break below this level however could mean this market retraces lower into 2660; and a complete reversal to the downside could see this market fall further into 2638.
FOREX AUD/USD – 0. 7710 ( ) -135 or -1.72% Thursday and Friday saw two days of aggressive selling as the Aussie dollar closed poorly last week. We will discuss the impact of this again in the this week. LIVE CHAT ROOM VOLATILITY ALERTS: Tue 11:30 – Monetary Policy Minutes Thu 11:30 – Unemployment Rate For a move higher we must now see this market close back above 0.7729; followed by a retest of 0.7833.Should this occur we will look for this market to retest 0.7903; and if momentum is very strong we cannot rule out a move back up to 0.7988 and 0.8033. If we cannot close above 0.7729, we are likely to see a move lower into 0.7662. Should the downside momentum continue we could see a quick move into 0.7620; and if selling pressure is strong a move into 0.7600 cannot be ruled out. EUR/USD – 1.2287 ( ) -18 or -0.15% The EURO also finished off the week where we started. We will be discussing this market in more detail in the . LIVE CHAT ROOM VOLATILITY ALERTS: Thu 20:00 – Flash Manufacturing PMI Thu 20:00 – Flash Services PMI For a sustained move higher we would like to see the EURO hold above 1.2266 followed by a strong break through 1.2360. Should this occur, we will then look for this market to test 1.2420; and if momentum is very strong we could see a push higher into 1.2520. If the EURO cannot close above 1.2266, we could see a move back down 1.2165 before a pause. This is an important level and any subsequent strong break and close below this level may see the EURO sell-off further into 1.2042 this week.
GBP/USD – 1.3941 ( ) +92 or +0.66% The Pound has found support at 1.3800 but has been unable to break through the key 1.4000 level. Will we see a break this week? VOLATILITY ALERTS: Tue 20:30 – CPI (annual) Wed 20:30 – Unemployment Rate Thu 20:30 – Retail Sales (monthly) Thu 23:00 – BoE Interest Rate Announcement For a move to the upside we would like to see Cable hold above 1.3875. A hold above this level may result in moves into 1.4075 and 1.4194. Should momentum remain strong to the upside, we could see a move into 1.4223 by the week’s end. If we cannot hold above 1.3875 we could see a quick move down into 1.3743 – 1.3725 before a pause. A continued sell-off may see another move lower into 1.3683 and 1.3654, with a strong break below these levels meaning cable may trade down into 1.3534. If momentum continues to remain strong, we could see a sharp decline to 1.3277. USD/JPY – 105.99 ( ) -82 or -0.77% The $/YEN is also trying to find some support at these levels. We will be discussing this market in more detail in the LIVE CHAT . For a continued move to the upside we would now like to see the market break above 106.30 followed by a close above 107.36. Should this occur we will then be looking for a quick move into 107.75. A strong break and close above 107.75 could then see a quick move into 108.31 before a pause. If momentum is very strong this week, we cannot rule out a move to 109.21 by the end of the week. If however the USD/JPY cannot break above 106.30 and fails at 105.79, a break below could see the USD/JPY trade quickly down to 104.97 before a potential pause. Should we continue to trade lower and see continued downside pressure on the USD/JPY- a sharp move to 103.99 is possible.
COMMODITIES GOLD – 1313 ( ) -10 or -0.76% GOLD has once again closed at the all important 1313 level. This is a very key level to watch this week. For a continued move higher we must now see this market hold above 1313, followed by a break and close above 1333. Should this occur we will look for a move into 1355, and a close above this level could see further upside into 1365. If momentum remains very strong, a very strong move into 1374. If Gold cannot hold above 1313, we will look for a strong move back down into the key 1303 level. A strong break below this level could see GOLD sell off further into 1294, and if momentum is strong to the downside we could see a sharp move down into 1280.
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