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 – 5292 ( +48 or +0.92% ) The ASX is now in what appears to be a basing formation. Will we rally from here or head lower? We will be discussing this market in more detail in the LIVE CHAT ROOM . VOLATILITY ALERT: Monetary Policy Minutes on Tuesday. For a continued move to the upside we would like to see this market break back up and hold above 5294. Should this occur, we will look for a move back up to 5373 – 5390. A strong break and close above this level could see the market trade to 5487, and if momentum remains very strong we could see the ASX rally to 5589 by the end of the week. If we fail to hold above 5294, we will look for a move back down to 5238 – 5235. A break below this could result in a move back into 5161, and further breaks to the downside could see the ASX head to 5238. Should we see a complete reversal to the downside, we will watch for a move back down to 5090. EUROPE DAX – 10292 ( -156 or -1.49% ) The DAX is still at critical levels and as each week goes by we get closer to an explosive move so BE PREPARED! VOLATILITY ALERT: Draghi speaks on Thursday, Flash PMI numbers on Friday. For a continued move to the upside we would like to see the DAX break above above 10382. If so we could see the DAX make a move back up to 10585 – 10601 before another pause. If momentum is VERY strong we would not rule out an explosive move to 10863. If we fail to break above 10382, we are likely to see a break below 10289 and potentially 10158 quickly. A close below this level may result in a move down 10013 and should this level fail, we could see a move back down into to 9907. A strong break below this level could see the DAX trade all the way back down to 9822. US SP500 – 2140 ( +17 or +0.8% ) Like the ASX- the S&P also appears to be forming a base however we cannot rule out the possibility of a further move down! All eyes will be on the FED this week as the market looks for clues as to when the next rate hike will be. We will be covering the FOMC Announcement LIVE during LIVE TV early Thursday morning, beginning at 3:45am AEST. VOLATILITY ALERT: Building Permits on Tuesday, FOMC Interest Rate on Thursday . For a move higher we would like to see a the S&P hold above 2137. Should this occur we will look for a move to test 2150, and a strong break and close through 2150 could see this market run to 2160 and 2176 very quickly. Should we see a break above 2176, we will look for a retest of 2194. The next level above to watch out for is 2212. If we cannot hold above 2137, we will watch for a move back down into 2112 before a pause. A strong break and close below this level could see the S&P head back down into 2106, and a further break below this level may mean another test of the important 2097 area. If momentum to the downside is very strong we cannot rule out a move back down to 2074. FOREX AUD/USD – 0.7493 ( -42 or -0.56% ) This $AUD again ended the week slightly lower than where it started. This week could prove to be very pivotal for the Aussie Dollar. VOLATILITY ALERT: Monetary Policy Minutes on Tuesday, Mid Year Economic & Fiscal Outlook on Wednesday. For a move higher we would like to see the AUD break above 0.7561, followed by a break and close above 0.7617. A strong break and close above this level could then see a quick move to 0.7662 before a pause; and if momentum remains strong we will look for strong move into 0.7729. If we cannot break above 0.7561, we will look for a move back down to 0.7447. A strong break below this level may result in a move back down into 0.7364 before another potential pause. Any subsequent breaks of this level however may result in a very fast move down to 0.7282. EUR/USD – 1.1156 ( -75 or -0.67% ) Members of our member Portal noted last week our comments that the EURO may be headed for a nose-dive. We saw this on Friday and now the question remains- will this sell-off continue or has it come to an end? We will also be discussing this market again in more depth in the MEMBER PORTAL this week. VOLATILITY ALERT: Draghi speaks on Thursday, Flash PMI numbers on Friday. For a sustained move higher we would still like to see the EURO break and close above 1.1248. If we can continue to break higher we will look for a quick move into 1.1347. Should momentum remain strong to the upside, we cannot rule out a move back up to 1.1380 this week. If the EURO cannot close above 1.1248, we will watch for a move back down to to 1.1117. Should we see further breaks to the downside, a move to 1.1083 cannot be ruled out; and if momentum remains very strong we could see a sharp move down to 1.1033 GBP/USD – 1.2998 ( -263 or -1.98% ) Not much to be said about the GBP- other than last week we saw a move down in what is still a larger consolidation move. Amidst other currencies- the GBP has clearly been the weakest performer given the uncertainty post Brexit. For a move to the upside we would like to see this market break above 1.3035. If the GBP can hold this level we will look for this market to head to 1.3227. Should we see a strong break through this level we could see the GBP/USD test 1.3426 very quickly. If momentum remains very strong, a move to 1.3644 cannot be ruled out. If we cannot break above 1.3035, we will look for a move back down to 1.2928. A strong break below this level could see a quick leg down into 1.2720. Should we break this level we will watch for a sharp move down to 1.2510; and if momentum is very strong 1.2297 cannot be ruled out. USD/JPY – 102.24 ( -44 or -0.43% ) The Yen will be very interesting this week as we look to what the FED has to say, and just as importantly what (if anything) comes out of the BoJ. The currency wars are in full swing and $/JPY is the perfect example of this. NOTE: Monday and Thursday are public holidays in Japan. VOLATILITY ALERT: Monetary Policy Statement on Wednesday. We have some major levels in play (discussed in our Members Forum) and will continue to discuss this market in our MEMBER PORTAL . For a continued move to the upside we would like to see this market break above 102.29, followed by a break and close above 103.21. Should this occur we will look for move into 103.99. A strong break above 103.99 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 break above 102.29, we will look for a move down to 101.12 and 100.76 – 100.61. A strong break below these levels could see the USD/JPY trade quickly down to 99.90 before a pause. Should we continue to trade lower and see continued downside pressure on the USD/JPY- a sharp move to 98.22 is possible. COMMODITIES GOLD – 1309 ( -19 or -1.43% ) Gold ended last week slightly lower, and once again we could see an explosive move in this market this Wednesday. Our key level of 1333 has proved to be a very important level for this market. We will also be discussing this in more detail this week in our MEMBER PORTAL . For a continued move higher we would like to see GOLD break back above 1322, and more importantly 1333. If we can hold these levels we will look for a move back up to 1355. A break above 1355 could see GOLD retest the important 1375 level before another pause. This is a key area and should we see a strong close above 1375, we will look for a move to 1400. If Gold cannot break above 1322, we will look for a move back down to 1303. A strong break and close below this level may result in a retest of 1294, and further breaks to the downside could see Gold trade retest the important 1276 level. If downside momentum continues to persist, a strong break through 1276 could see a 1257 by the end of the week.
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