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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 Net Short.
AUSTRALASIA
ASX – 5437 ( + 34 or + 0.63% )
The ASX bounced off our FICM level of 5367 on 3 occasions early in the week before moving higher. The ASX is still range bound therefore our comments remain the same.
For the up move to continue then we would like to see 5367 remain as a strong level of support followed by a strong push back above the area between 5415 – 47 with a long up bar. Once this is broken then 5495 could be seen again. If the momentum is strong when it breaks through 5495 then it could reach 5562 again before slowing down temporarily.
The downward process was stopped by strong support near 5367. If the Downward process is to continue then we would need to see a strong break and close below 5367. This could then accelerate the move down towards 5270 with a possible extension down to 5201. If the momentum is strong then we could see 5177 reached were the ASX might find some temporary support.
EUROPE
FTSE – 6820 ( + 43 or + 0.63% )
The FTSE found support early in the week to bounce back into the zone between 6791 – 6851. Downside moves has been short lived by this market as any fear has been removed from the markets by central bank continued intervention.
For the up move to continue we would like to see strong early breaks past 6851 before another attempt is made at breaking past both 6878 and possibly 6904. This will then complete the range set back in OCT 2013.
For a downward process to restart and take effect we would like to see 6851 become a solid level of resistance before moving down towards 6791 and finally 6723. If the downward momentum is strong and 6723 is broken with a long down bar then 6632 could provide some level of support.
DAX – 9990 ( + 86 or + 0.87% )
The DAX reached another all time high last week of 10049. But once again failed to hold on. This level fell between the 10021 – 75 target we mentioned on the DAX over the past few weeks. With continuous new all time highs being reached and then failing to hold, it is important to understand this behaviour before taking part in that direction.
For the upmove to continue to new levels we would like to see a strong momentum break past the area between 10021 – 75. Any strong break past this area could extend to an ambitious level of 10258.
If the highs cannot hold and we see a strong break back down past 9930 we could see 9856 reached. Further strong beaks past 9856 is needed to reach 9750. Once 9750 is also broken then further downside moves could continue if 9667 followed by 9580 which could provide the first level of support.
US
S&P – 1962 ( + 26 or + 1.34% )
Another all time high for the S&P last week of 1964. There is no stopping this rampant BULL? or is there? GOLD spiking, Volatility Low, Earnings no longer following fundamentals, Potential all out war in Iraq. In the NEW economy these all don’t matter because the FED will step in to print more money. Lets be serious ladies and gentlemen, Can YOU print money to pay your mortgage? I did not think so.
If the S&P stays on this course then the next projected level is 1993 – 2002. We will however be discussing the moves in our LIVE CHAT ROOM.
For the down move to restart then we would like to see a solid break back down past 1943 reaching 1929. Once this level is broken then we could see 1911 again.
FOREX
AUD.USD – 9385 ( – 15 or – 0.16% )
The AUD attempted another move past the all important 9423 area on Thrusday(again) with a high of 9431, but was unable to stay above it for long. “It is still range bound and the 2 FICM levels we are looking for before a significant move occurs are 9203 and 9423. Until these 2 key levels are broken our comments from last week remain the same.”
For the move higher to continue we would need to see an early break and close past 9423 before the potential to reach 9539 could occur. Once this is reached the AUD could start a new phase and potentially new up trend.
If the USD finds strength and 9423 proves to be difficult to stay above, then a move past 9333 could reach 9287. If the downward momentum is strong then we would like to see a strong break and close past 9287 reaching 9203 were the AUD might find temporary support.
EUR.USD – 13599 ( + 59 or + 0.44% )
The EUR made a move higher last week but then found some selling pressure late. It will be interesting to see how the markets handle the negative interest rates by the ECB. New uncharted territories for many reserve banks, the one thing we have seen over many years in the markets is that the markets will always adjust.
If the EUR was to strengthen then we would like to see 13619 broken early followed by a further break past 13669. Once this level is also broken we could see the EUR back near 13713.
For the EUR to restart a move down we would like to see an early break past 13564 followed by a strong break and close below the area between 13482 – 72 with a long down bar. Once this is reached we could see 13392.
GBP.USD – 17013 ( + 50 or + 0.29% )
Another slow start for the GBP, but once again the move higher had momentum behind it reaching a high of 17063. Then we saw the close above the previous highs in MAY.
For the GBP to move higher we would like to see solid support near 16996 followed by a break and close past the range high of 17105 before further moves towards 17283 occur.
For the GBP to move lower then we would like to see a solid long down bar break and close below 16996. Once this occurs further downside moves past 16908 could reach 16854. If the downward momentum is strong then 16767 and 16731 could be reached.
USD.JPY – 10206 ( + 2 or + 0.02% )
This pair is currently trading in a range where most of the trading has been between 102.70 and 101.52 since FEB 2014. We have seen some spikes above and below but until a clear direction is formed our comments will remain the same week in – week out.
For the USD to move higher we would like to see an early break past 10309. If the momentum is strong then we could see 10356 reached. This level will then need to be broken with a long solid up bar before we see 10410.
If we see another downward move then we would like to see an early break past 10180 followed by further strong breaks past the area between 10169 – 10152 leading the pair to reach 10052. If 10052 is then broken with a long solid down bar we could see 9977.
COMMODITIES
GOLD – 1314 ( + 37 or + 2.90% )
Two weeks with GOLD rallying over 2%. The World markets moving higher. Once again we saw gaps up in GOLD. “If we see a shift from complacency in this market turning to panic GOLD might find strength as a safe haven once more.” has the shift started? If we break through 1400 again then maybe people and the FED will take notice. The Big question will then be, “WILL THE FED THEN TAKE ACTION TO SUPPRESS THE VOLATILITY IN GOLD TO AVOID PANIC”
For the upward move to continue higher we would like to see an early break and close past 1330. This could then lead GOLD to reach the area between 1351 – 59. Once this area is broken the 1367 – 77 will play an important role in defining the next move.
If the down move restarts then we would like to see an early break past 1296 reaching 1285. Once this level is also broken we could see GOLD testing 1274 once again.
US LIGHT CRUDE OIL – 106.65 ( – 8 or – 0.07% )
After an explosive move two weeks ago OIL took a breather. Therefore our comments remain the same.
“The one thing to note that moves like this are event driven, so when the event circumstances cool, then the move reverts back to previous levels. Caution should be taken if you decide to chase explosive moves.”
For the upmove to continue then we would like to see another early break back above 107.71 with strong upward momentum reaching 108.92. If this level is broken and the conflict continues to escalate then the previous highs of 112.20 set back in AUG2013 could be tested.
If the conflict cools down and we see a down move breaking past 104.96 then we could see OIL back down near 104.02 – 103.49 area where it might find some temporary support, but if the sell off is strong then we could see OIL breaking past 102.29 reaching 101.28.
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