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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.
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INDICES
AUSTRALASIA
ASX – 5521 ( +6 or +0.11% )
The ASX continues to remain in a very tight range. Sooner rather than later this market will break out and we may see a very large directional move.
We will be discussing this market in more detail in the LIVE CHAT ROOM this week.
For a continued move to the upside we would like to see this market hold above 5521, which has been a key level for a few weeks. Should this occur, we will look for a move higher into 5550, which is also a very key level! If the ASX can break and close strongly above 5550, we will look for a move to 5589. A strong close above this level may see the ASX rally to 5651 by the end of the week.
If we fail to hold above 5521, we will look for a move back down to 5437. A break below this could result in a move back down into 5373. Further breaks to the downside could see the ASX fall aggressively back down to 5294 and the important 5248-5238 area.
EUROPE
DAX – 10565 ( -133 or -1.24% )
The DAX has taken a breather but may be setting up for another directionally move. We will be watching this market closely this week.
VOLATILITY ALERT: Flash PMI data on Tuesday, Ifo Business Climate on Thursday.
For a continued move to the upside we would like to see the DAX break and close above above 10585 – 10601. Should this occur we will look for a move back up to 10749. A break past 10749 may see another push higher into 10863, and further breaks of this level could see the DAX rally 10983 and 11060.
If we fail to close above 10601, we will look for a move back down to 10475 and should there be further downside, we could see a move lower to 10382. Should momentum remain very strong, we will look for a move down to 10158.
US
SP500 – 2183 ( 0 or +0.00% )
The S&P spent the majority of last week moving sideways and has finished the week where it ended. As such our levels remain unchanged.
We will be discussing this market in more depth in the MEMBER PORTAL.
VOLATILITY ALERT: Prelim quarterly GDP, Yellen speaks on Friday.
For a move higher we must now see the S&P hold above 2176. Should this occur we will look for a move into 2194. A strong break and close above 2194 is likely to see the S&P set its sights for 2200. If we can hold above 2200 this week, we will ultimately then look for a move into 2212. Should momentum remain very strong, 2234 cannot be ruled out.
If we cannot hold above 2176, we will watch for this market to hold 2150. A break below 2150 may see this market retest the previous all-time highs at 2137. A strong break through 2137 could result in a move back down to 2126, and should we break 2126 we cannot rule out a move back down into 2112 by the end of the week.
FOREX
AUD/USD – 0.7625 ( -23 or -0.3% )
The AUD is also rangebound despite the increased volatility we have seen over the past week. It is a quiet week on the calendar this week so it will be interesting to see where sentiment takes this market.
For a move higher we would like to see the AUD hold above 0.7617, followed by a break and close above 0.7662. A strong break and close above this level could then see a quick move to 0.7729 before a pause; and if momentum remains strong we will look for strong move into 0.7789.
If we cannot hold above 0.7617, we will look for a move back down to 0.7561. A strong break below this level may result in a move back down into 0.7447, and further breaks lower could see 0.7364 before another potential pause. If momentum remains strong, a break and close below 0.7364 could see a sharp move down to 0.7282.
EUR/USD – 1.1324 ( +162 or +1.45% )
The EURO has reached one of our important levels for the week and is now at a very key level. Will we see the Euro continue to rally or is a reversal underway?
VOLATILITY ALERT: Flash PMI data on Tuesday, M3 Money Supply on Wednesday.
For a sustained move higher we would like to see 1.1117 hold followed by a break back above 1.1163 and 1.1201. If momentum to the upside remains strong we will look for further moves higher into 1.1248; and if there is no stopping the upside we could see strong moves into 1.1347 and 1.1385.
On the downside, a strong break and close back below 1.1117 could see the EURO head back down to 1.1064 and 1.1033. A strong break below these levels could see a quick move down to 1.0897; and a further break result in a retest of 1.0814. If there is continued downside pressure we will then look for a move down into 1.0743 – 1.0734.
GBP/USD – 1.3070 ( +154 or +1.19% )
Like the EURO, the GBP/USD managed to edge its way higher. When this market makes its move it could be substantial so BE PREPARED!
For a move to the upside we would like to see this market hold 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 hold 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 – 100.19 ( -109 or -1.08% )
The $/JPY is becoming VERY INTERESTING at this big level, which we have discussed in great length to our members in the Member Portal. We will be discussing this market in more detail this week in the MEMBER PORTAL.
VOLATILITY ALERT: BoJ Kuroda speaks on Tuesday.
For a continued move to the upside we would like to see this market break above 101.12, followed by a break and close above 102.29. Should this occur we will look for move into 103.21. A strong break above 103.21 could see a move to 103.99, and if momentum remains strong we cannot rule out a sharp move higher to 104.97.
If however the USD/JPY cannot break above 101.12, we will be watching 100.76 – 100.61 closely for resistance. Should the $/JPY remain below these levels, we will watch for a move back down to 99.90. A strong break below this level could see the USD/JPY trade quickly down to 98.22 before a pause.
COMMODITIES
GOLD – 1341 ( +5 or +0.37% )
Gold ended last week where it started, so once again our levels remain unchanged. Last week we said GOLD is at a major inflection point right now and this is indeed the case so BE PREPARED!
We could be seeing signs of a major move in GOLD soon to begin…
For a continued move higher we would like to see GOLD hold above 1333, followed by a strong break and close above 1355. Should this occur we could see a move to retest 1375, and a strong break and close above this level could see a fast spike to 1380.
If Gold cannot hold above 1333, we will look for a move back down to 1322. A break below this level may see GOLD trade down to 1309 -1303. Should momentum on the downside remain strong, we could see Gold trade all the way back down to 1297.
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