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 – 6055 ( -66 or -1.08% ) The ASX struggled to break higher last week and has since reversed lower off our key 6140 level. VOLATILITY ALERTS: Wed 11:30 – Construction Work Done (quarterly) Wed 18:00 – RBA Governor Lowe Speaks For a continued move higher we must now see the ASX close above 6070. Should this occur we will look for continued upside into 6140. A strong break above this level could see a strong move into 6206 by the week’s end. If the ASX cannot close above 6070, we will look for a move back down to 6010. A strong break and close below this level could see the ASX retest 5985, and if momentum is strong we could quickly see a further move all the way back down into 5921. EUROPE DAX – 13075 ( +87 or +0.67% ) The DAX was higher for the 4th straight week following another push to the upside. Are we now witnessing the last leg up in this rally? We will be discussing this in more detail in the LIVE CHAT ROOM . NOTE: Monday is a public holiday in Germany (Whit Monday). VOLATILITY ALERTS: Wed 17:30 – German Flash Manufacturing PMI Wed 17:30 – German Flash Services PMI Thu 21:30 – ECB Monetary Policy Meeting Accounts Fri 18:00 – German IFO Business Climate For a continued move to the upside we must now see the DAX hold above 13050. Should this occur we will look for a strong move into 13205, and if momentum remains strong a push back higher into 13301. If the DAX fails to hold above 13050, we may see a retest back down into the key level of 12921.A close below this level is likely to see a retest of 12714; however if momentum is very strong to the downside we cannot rule out a move to 12566.
US SP500 – 2712 ( -16 or -0.59% ) The S&P failed to reach the key 2760 level and is now at a very critical area. We will be discussing the impact of this in the LIVE CHAT ROOM this week. VOLATILITY ALERTS: Thu 04:00 – FOMC Meeting Minutes Fri 00:00 – Existing Home Sales Fri 22:30 – Core Durable Goods (monthly) Fri 23:20 – FED Chair Powell Speaks Sat 00:00 – UoM Consumer Sentiment (revised) For a move higher we would like to see the S&P close above 2736. Should this occur we will look for a retest of the key 2760 level. A strong break and close above this level could see another retest of 2785, and if momentum remains strong to the upside we cannot rule out a move to 2808. If we cannot close above 2736, we could see this market continue to sell-off into 2704 before a pause. If momentum to the downside is strong we may see a move lower into 2680; and a close below this level may result in a move down to 2660 and 2638.
FOREX AUD/USD – 0.7512 ( -29 or -0.38% ) The Aussie Dollar remained range bound for most of the week and this week should prove to be an important week for this market. VOLATILITY ALERTS: Wed 11:30 – Construction Work Done (quarterly) Wed 18:00 – RBA Governor Lowe Speaks For a move higher we must now see this market hold above 0.7489, followed by a retest of the key area between 0.7550 and 0.7561. A break above this level could see this market break higher and retest 0.7617; and if momentum is very strong we may see a quick move into 0.7662. If we cannot hold above 0.7489, we will look for this market to break lower into 0.7447 before another pause. A strong break and close below this level however could mean this market sells off sharply into 0.7364. EUR/USD – 1.1769 ( -170 or -1.42% ) Like the Aussie Dollar the Euro is also attempting to base. Will this market finally bottom this week? VOLATILITY ALERTS: Wed 18:00 – Euro area Flash Manufacturing PMI Wed 18:00 – Euro area Flash Services PMI Thu 21:30 – ECB Monetary Policy Meeting Accounts Fri 18:00 – German IFO Business Climate For a sustained move higher we would like to see the EURO close above 1.1738, followed by a retest of 1.1834. Should this occur, we will then look for this market to retest 1.1927; and if momentum is very strong we cannot rule out a move to 1.2042. If however the EURO cannot hold above 1.1738, we may likely see a move lower into into the 1.1678. A strong break and close below this level however could see a sharper move down into 1.1613.
GBP/USD – 1.3471 ( -68 or -0.5% ) Cable continues to be in a tight sideways range. We are watching this market again very closely and will be discussing this exclusively in the LIVE CHAT ROOM . VOLATILITY ALERTS: Tue 19:00 – Inflation Report Hearings Wed 18:30 – CPI (annual) Thu 18:00 – BoE Governor Carney Speaks For a move to the upside we would like to see a strong break and close above 1.3683. Should this occur we could see a quick move into 1.3875 before a pause. If momentum is very strong to the upside we may see a further push into 1.4075. If we cannot close above 1.3683, we may see further selling into 1.3402 before a pause. A strong break and close below this level however could see Cable sell off aggressively into 1.3277. USD/JPY – 110.74 ( +137 or +1.25% ) The $/YEN found sellers at our 111.09 level and this may prove to be the level that defines this market this week. We will be discussing this in more detail in the MEMBER PORTAL . VOLATILITY ALERTS: Mon 09:50 – Trade Balance Tue 15:00 – Core CPI (annual) Wed 10:30 – Flash Manufacturing PMI For a move to the upside we must now see this market close strongly through 111.09. A strong break and close above this level could then see the $/YEN rally into 111.73, and if momentum is extremely strong to the upside 112.68 cannot be ruled out. If we cannot close above 111.09, we will look for a retest of 109.94. A break below this level may result in a retest of 109.21, and if the downside remains strong we could see a strong sell-off into 108.31.
COMMODITIES GOLD – 1293 ( -25 or -1.9% ) It is now or never for GOLD as this market is testing the resolve of both bulls and bears. For a continued move higher we must now see this market close and hold above 1294. Should this occur we will look for a retest of 1303. A strong close above this level could see further upside into 1313; and if momentum remains very strong, we could see a big push into 1322. If Gold cannot hold above 1294, we will look for a move back down into 1285. A strong break and close below this level however takes us down into the key 1276 – 1278 area which is very important and will be watched closely.
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