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 – 6176 ( +3 or +0.05% ) The ASX has once again remained practically unchanged over the past week; and as such our levels remain unchanged. VOLATILITY ALERTS: Tue 14:30 – RBA Interest Rate Announcement Thu 11:30 – AUD Trade Balance For a continued move higher we must now see the ASX hold above 6140 followed by a retest of 6206. Should this occur we will look for a move into 6276, and if momentum to the upside is very strong we cannot rule out a move to 6345 and 6374. If the ASX cannot hold above 6140, we will look for a move back down to 6085 before a pause. A strong break and close below this level however could see the ASX retest 6040, and if downside momentum is very strong we could see a move down to 6002.
EUROPE DAX – 12225 ( -183 or -1.47% ) The DAX sold off aggressively last week off a big reversal on Friday; falling right into our key level at 12198. We will be discussing this market extensively in the MEMBER PORTAL this week. NOTE: Wednesday is a public holiday in Germany (German Unity Day) VOLATILITY ALERTS: Thu 17:30 – German Construction PMI Fri 16:00 – German Factory Orders For a continued move to the upside we must now see the DAX close above 12384 followed by a move into 12566. A break of this level could then result into a quick move into 12640; followed by continuation into 12714. If momentum to the upside is very strong we cannot rule out a move to 12830. If the DAX fails to close and hold above 12384, we expect to see a move back down into 12198 before a pause. A break below this level however means we may see more selling into 12115; and if momentum is very strong to the downside we may see a sharp move into 12044.
US SP500 – 2916 ( -10 or -0.34% ) The US was slightly down last week and whilst we did see buyers step back into this market off the key 2902 level, the week was all about 2928. We will be discussing this in more detail in the LIVE CHAT ROOM . VOLATILITY ALERTS: Tue 00:00 – ISM Manufacturing Wed 02:00 – FED Chairman Powell Speaks Thu 00:00 – ISM Non-Manufacturing Fri 00:00 – Durable Goods Orders Fri 22:30 – Trade Balance Fri 22:30 – Non-Farm Payrolls – LIVE TV For a move higher we would like to see the S&P close above 2928. Should this occur we will look for a move into 2946 which may see the bulls push this market higher into 2950 – 2957. If momentum is strong we cannot rule out a move to 2977. If we cannot close above 2928, we will look for a move back down to 2908. A break below this level may result in another quick move down into 2870; and if momentum to the downside is very strong we cannot rule out a move into 2840.
FOREX AUD/USD – 0.7217 ( -71 or -0.97% ) The Aussie dollar heads into an important week going into the RBA and we are now watching this market closely this week. VOLATILITY ALERTS: Tue 14:30 – RBA Interest Rate Announcement Thu 11:30 – AUD Trade Balance For a move higher we would like to see the AUD break above 0.7229, followed by a break and close above 0.7282. A strong break and close above this level could see a quick move to 0.7364 before a pause; and if momentum remains strong we will look for a move back up into 0.7447. If we cannot break above 0.7229, we will look for a move back down to 0.7169. A strong break below this level may result in a move back down into 0.7112 before another potential pause. Any subsequent breaks of this level however may result in a very fast move down to 0.7070.
EUR/USD – 1.1602 ( -152 or -1.29% ) The Euro was again weaker last week following a stronger US Dollar last week. Can it regain some of last week’s losses this week? VOLATILITY ALERTS: Mon 19:00 – EU Unemployment Rate Wed 19:00 – EU Retail Sales 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 – 1.3028 ( -55 or -0.42% ) The Pound is becoming more and more volatile as we get closer towards some important Brexit dates. We will be discussing this in more detail in the LIVE CHAT ROOM . VOLATILITY ALERTS: Mon 18:30 – Mortgage Approvals For a continued move to the upside, we would like to see Cable remain above 1.3035, followed by a retest of 1.3111 and 1.3161 before a pause. Should this occur we will look for a move to 1.3191; and if momentum is very strong we could see a re-test of last week’s highs into 1.3277. On the downside, should we break and close strongly below 1.2868, there is every chance we see a move lower into 1.2720. Should this level break however we could see a fast move down into 1.2622; and if momentum is very strong we cannot rule out a move to 1.2510.
USD/JPY – 113.69 ( +114 or +1.01% ) The $/YEN was also strong last week on the back of the US dollar. Is there more room to the upside still? VOLATILITY ALERTS: Tue 15:00 – JPY Consumer Confidence For a continued move to the upside we must first see this market close above 113.86. Should this occur we will look for a retest of retest 114.52. A break above this level may see the $/YEN move higher into 115.54, and if momentum is very strong we will look for a move to 116.08. If we cannot close above 113.86 we will look for a move back down into 112.39. A break below this level is likely to result in a retest of 111.73; and as we mentioned last week: Should we break below 111.73 WATCH OUT- the move that follows may be very sharp into 111.09 and 109.94.
COMMODITIES GOLD – 1191 ( -8 or -0.67% ) GOLD finally broke out of its sideways range to the downside last week but a reversal on Friday sees it again within its sideways range. For a move higher we must see this market close above 1206 on its way to 1222. Should this occur we will look for a retest of 1238. A close above this level may likely see a further move to the upside into 1247 before a pause. Should momentum remain very strong, we could see a fast move into 1260. If Gold cannot close above 1206, we could see another quick decline into 1187. Any subsequent breaks of this level may result in further downside into 1180, and if momentum to the downside remains very strong we cannot rule out a move into 1170.
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