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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.
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We may take multiple trades throughout the week. Currently Trade View is Light Net Short.
ASX – 5300
The ASX started moving lower last week reaching our 5200 level mentioned in our earlier market brief. Once this level was reached we saw a strong push back up to 5300 very quickly.
As we have closed near the same level as last week we will maintain similar levels of interest as mentioned previously.
For a move higher we would like to see a solid break past 5367 before an attempt is made to reach 5424. If this level is then broken with strong upward momentum then we could see a full but ambitious extension reaching 5564.
As mentioned last week, if 5367 continues to play its part as a strong resistance level then a break below 5276 could see 5240 reached quickly. If this is then broken with solid long down bars then 5200 is next in line. This time 5200 needs to be broken with long down bars before a push towards 5144 – 25 area could be seen were the ASX might see some support.
FTSE – 6826
After a sideways move early in the week the FTSE made a strong move higher closing 7 points higher than our mid range target of 6819 mentioned in last weeks brief.
For the up move to continue then 6906 needs to be broken early with the same momentum as mid last week. If this is done and the momentum is strong then the next level we will be watching is 7071 which will be the completion of the new range set in Dec 2013.
For the down move to start then a strong break below the 6756 – 40 area needs to occur early in the week. Once this is done we could see 6657 reached. If the downward momentum is strong then a break past 6657 could see 6607 and possibly 6520.
DAX – 9719
The DAX continues to overextended its up moves reaching a high of 9791 which was only 8 points lower than our upper level mentioned in last weeks brief. This is something to take note of as it is obviously trying to lead the markets forward but will be interesting if the rest of the world does not follow.
For the DAX to once again push higher then we would like to see the same strong upward momentum with long up bars before we could see a push past 9864 before targeting an ambitious level of 10019.
If the rest of the world does not follow the DAX higher and we see a move down then we would like to see a strong break back down past the 9627 – 44 which could then reach 9586. If 9586 is then broken we could see 9480. If the downward momentum continues then 9368 is the lower level we will be watching.
S&P – 1839
The S&P made another attempt at breaking through the 2013 highs reaching a high of 1850 but was unable to hold and break through. At Trade View we are concerned about the lack of growth in the US and we left our clients in 2013 with “Don’t forget to HEDGE, HEDGE, HEDGE.”
Once again we have reached all time highs and if we are to see any further moves higher we would like to see a solid move towards 1867. If this move is strong then the full range which was set back in June – July 2013 could be reached with an ambitious level of 1901.
For a new down move to start the highs of 2014 need to become a solid level of resistance and if so then a break below 1832 could see 1820 reached. If this downward momentum is strong then 1805 could be seen next. If 1805 is broken with long down bars then we could see 1792 reached.
AUD.USD – 8770
If RBA is still unsure whether to cut interest rates or not after the bad job numbers in December, and the AUD falling sharply then maybe the markets need to try harder in assisting with the decision?
For a new upmove to start we would like to see a solid break past 8924.
If the long term downtrend continues and the RBA indicates further rate cuts then we would like to see a solid break back down through the long term Standard Deviation Channel which the AUD is currently sitting on. Once this occurs and if the momentum is strong then 8454 could be reached.
EUR.USD – 13540
The EUR made a move lower last week but only by about 100 points. We will be watching this pair closely as it has been strong even though the ECB has indicated they would like it lower.
For the EUR to continue upward we would like for 13515 to hold as strong support followed by a bounce back up past 13564 reaching 13604. If this level is broken with long solid up bars then we could see 13721 reached.
If the USD continues its strength and the ECB makes moves to push their currency lower then we would like to see a solid break past both 13515 and 13485 early in the week. This could then lead the pair to 13432 and possibly extend to reach 13396.
GBP.USD – 16420
The GBP continues to be one of the most stubborn currency pairs against the USD as every time it moves down it tends to find strength again very quickly and we saw this last week again on Friday where it reached a low of 16309 then bounced 150 points to reach a high of 16458
If the GBP continues its strength this week then we would like to see a solid break past 16455 with long solid up bars before a push higher towards 16573 is achieved. If the move up is strong then 16705 would complete the range.
For the down move to restart, we would like to see an early break past 16415 which could then test 16309 which was the the low of Friday. If this level is then broken with long down bars then we could see 16269 reached and possibly 16227.
USD.JPY – 10430
The JPY strengthened early last week but could not continue as the USD found the same strength the next day and we saw a 200 point rally. We will continue to watch this pair for further sharp moves.
If the USD continues strong this week then we would like to see a solid move past the area between 10467 – 78 before a new attempt is made in reaching and breaking 10543. Once this level is broken we could see a possible extension to 10632.
If we see another down move start like early last week then we would like to see 10409 broken early in the week with long down bars followed by a break past 10379, this could then lead the pair to reach 10251. If 10251 is broken again with long solid down bars, then we could see a longer term downward move restart.
GOLD – 1253
As GOLD has moved sideways our upper levels of interest remain the same but our formula’s have amended the lower initial breaks. We mentioned in previous briefs that we will be watching GOLD closely as it has the potential to make dramatic moves quickly, either up or down. So be prepared it could come anytime soon.
If GOLD continues higher from here we would like to see a strong break past the area of 1269 – 82 before we see GOLD back into 1300 again. Once this is reached than 1320 and 1351 could be the next possible targets.
If the down move continues, then a solid break past 1236 and 1218 early in the week could lead the way for GOLD dipping below 1200 again and reaching the area of 1182 – 80.
US LIGHT CRUDE OIL – 9428
OIL found further upward momentum reaching last weeks mid range level of 9456 with a high of 9504.
For OIL to continue its move higher then we would like to see 9456 broken again with long solid up bars early in the week. Once this occurs then we could see 9598. If achieved and broken this could then push OIL back up to the area between 9696 – 9745 where it might find some resistance.
If 9456 is hard to break again and the longer term down move continues then we would like to see a solid break past 9345 early in the week followed by a break past 92.92. If this occurs with solid momentum then 9156 could be seen followed by 9015 which would complete the full range.
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