Market Brief

Is there another twist to the FED’s comments last week? With equity markets looking skittish, Is the stage set for a move lower or higher? Click below to see what our desk thinks, and the important levels to watch this week.

Read below what our desk thinks, and the important levels to watch this week.

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes. For up to the minute market analysis see our live trading room.

 

INDICES

AUSTRALASIA ASX – 5848 ( +2 or +0.03% )

The ASX remained virtually unchanged from last week as this market continues to test a key area. For a continued move higher we must now see the ASX close above 5921 followed by a push into 6070. Should this occur we will look for a move into 6140, and if momentum to the upside remains strong we cannot rule out a move to 6206 and 6276. If the ASX cannot close above 5921, we will look for a move back down to 5823 before a pause. A strong break and close below this level however could see the ASX retest 5746, and if downside momentum is very strong we could see a move down to 5614.

EUROPE DAX – 13118 ( -64 or -0.49% )

The DAX is struggling against resistance- can this market finally break through and rally higher or will we see strong selling? We will be discussing this in our LIVE CHAT ROOM this week. VOLATILITY ALERTS: Wed 17:30 – German Flash Manufacturing PMI 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 back up into 13266, and if momentum remains strong a push back higher into 13520. If the DAX fails to hold above 13050, we may see a retest back down into the key level of 12714. A close below this level is likely to see a retest of 12566; however if momentum is very strong to the downside we cannot rule out a move to 12266.

US SP500 – 3326 ( -12 or -0.36% )

The S&P was down slightly with the FED changing their outlook every so slightly last week; and this week could also prove to be pivotal. We will be discussing this in the MEMBER PORTAL this week. VOLATILITY ALERTS: Tue 00:00 – FOMC Chair Powell Speaks Wed 00:30 – FOMC Chair Powell Testifies Wed 23:45 – Flash Manufacturing PMI Thu 00:00 – FOMC Chair Powell Testifies Fri 00:00 – FOMC Chair Powell Testifies Fri 22:30 – Durable Goods Orders (monthly) For a move higher we would like to see the S&P close above 3395. Should this occur, we will look for a move higher into 3498. A strong break above this level however sets the stage for a move higher into 3560; and if momentum is very strong we cannot rule out a move to 3602. If we cannot close above 3395, we could see this market move lower into 3300. A break of this level however may result in a quick move down to 3274; and if momentum to the downside remains strong we may see a fast move down to 3210 and 3140.

FOREX

AUD/USD – 0.7291 ( +8 or +0.11% )

The Aussie Dollar was contained in a very narrow range all week and are watching this market very closely now. We will be discussing this market again in the LIVE CHAT ROOM this week. For a move higher, we would first like to see the AUD close above 0.7364. Should this occur we will look for a move into 0.7447, and if upside momentum remains very strong we cannot rule out a move to 0.7489 before a pause. If the AUD cannot close above 0.7364, we will look for this market to break lower through 0.7282. A break and close below this level could see a sharp decline into 0.7112; and if momentum to the downside remains strong we cannot rule out a move into 0.7014 EUR/USD – 1.1842 ( -2 or -0.02% ) The EURO was unchanged last week and as such our levels remain unchanged. VOLATILITY ALERTS: Wed 18:00 – Flash Manufacturing PMI For a move higher we would like to see the EURO hold above 1.1834. Should this occur we could see a retest of 1.1925. A break of this level could see this market rally further to 1.2002; and if momentum is very strong, 1.2042 cannot be ruled out. If the EURO cannot hold above 1.1834, we could see a fast move down into 1.1738 before a pause. A strong break of this level may result in a move into 1.1678, however any weakness below this level could see a sharp drop into 1.1613.

GBP/USD – 1.2916 ( +121 or +0.95% )

The British Pound saw a nice bounce to close off the week but does this market have more turmoil in the week(s) ahead? We will be discussing this in the LIVE CHAT ROOM this week. VOLATILITY ALERTS: Tue 16:00 – Public Sector Net Borrowing Tue 17:30 – BoE Governor Bailey Speaks Wed 18:30 – Flash Manufacturing PMI, Services PMI Fri 00:00 – BoE Governor Bailey Speaks For a continued move to the upside, we would like to see Cable hold above 1.2868, followed by a move higher into 1.3035 before a pause. If however momentum is very strong we may see a strong push into 1.3161 and 1.3277 by the weeks’ end. Should we fail to hold above 1.2868, we could see a move back down to the all important 1.2720. A break below this level however could see Cable further depreciate to 1.2622 by the week’s end; and if momentum is very strong to the downside 1.2480 cannot be ruled out.

USD/JPY – 104.55 ( -159 or -1.5% )

The $/Yen was lower as $US weakness continues; but the question is can this be sustained? We will be discussing this in the MEMBER PORTAL this week. NOTE: Monday and Tuesday are public holidays in Japan (Respect for the Aged and Autumnal Equinox days) For a move to the upside we must now see this market close above 104.97. Should this occur we will look for a retest of 105.50, and if momentum is very strong we cannot rule out a move all the way back up to 106.82. If we cannot hold above 104.97, we could see another move back down into 104.02. A break below this level may result in further downside to 103.21; and any further breaks to the downside may trigger a bigger move into 103.21.

COMMODITIES

GOLD – 1950 ( +10 or +0.52% )

GOLD buyers continue to hold and withstand pressure from the bears. For a move higher we must see this market hold above 1938. Should this occur we will look for a move to 2012. A break above this level sets Gold up for retests of 2033 and 2050. If Gold cannot hold above 1938, we will look for a move back down to 1920. A break below this level could see a move lower into 1900; and if momentum is very strong to the downside we cannot rule out a sharp move down to 1871.
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