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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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
ASX – 5697 ( -56 or -0.97% )
The ASX continues to remain in a narrow sideways consolidation and as we mentioned in the MEMBER PORTAL last week GET READY. We will be discussing this market exclusively in the LIVE CHAT ROOM.
VOLATILITY ALERTS:
Tue 11:30 – Quarterly CPI
Thu 13:05 – RBA Governor Lowe Speaks
For a continued move higher we would like to see the ASX hold above 5671, followed by a strong break and close above 5746. Should this occur we will look for a retest of 5777, and a strong close above this could result in a quick move to 5823. If momentum is strong we will then look for a rally into 5875 and 5921.
If the ASX cannot hold above 5671, we are likely to see another retest of 5606. A close below this level may result in more selling into 5582 and if momentum is very strong 5521 cannot be ruled out.
EUROPE
DAX – 12252 ( -395 or -3.12% )
The DAX broke through a key area we discussed on Friday and has come into another one of our key levels.
VOLATILITY ALERTS:
Mon 17:30 – German Flash Manufacturing PMI
Mon 17:30 – German Flash Services PMI
Mon 18:00 – Euro Area Flash Manufacturing & Services PMI]
Tue 18:00 – German IFO Business Climate
Fri 17:00 – German Prelim CPI
For a continued move to the upside we must now see the DAX hold above 12198. Should this occur we will look for a move back up to 12384; and if we can break strongly above this area this sets the DAX up for a retest of 12536. A strong break of 12536 could then see a move into 12714.
If the DAX fails to hold above 12198, we are likely to see a move lower into 12044 – 12035. This is a very key area and a break below could see a sharp move down into 11875.
US
SP500 – 2471 ( +13 or +0.53% )
Last week we said the S&P is at all-time highs and the bull market is not over yet. We have come into important resistance as we move into FED week. We will be discussing this in more detail in the MEMBER PORTAL.
VOLATILITY ALERTS:
Tue 00:00 – Existing Home Sales
Wed 00:00 – CB Consumer Confidence
Thu 00:00 – New Home Sales
Thu 04:00 – FOMC Fed Interest Rate – LIVE TV
For a move higher we would like to see the S&P hold above our key level at 2465, followed by a strong break and close above 2477. Should we continue to break higher, we will look for a move to 2511 before another pause.
If we cannot hold above 2465, we will look for a move down to retest 2450. A strong break and close below this level means we could see the S&P trade lower into 2445 and 2440. If momentum to the downside is strong, a move down into 2431 by the end of the week cannot be ruled out.
FOREX
AUD/USD – 0.7912 ( +87 or +1.11% )
The Aussie dollar came within 20 points of reaching the all-important 80c level before reversing lower.
VOLATILITY ALERTS:
Tue 11:30 – Quarterly CPI
Thu 13:05 – RBA Governor Lowe Speaks
For a move higher we must now see this market hold above 0.7903, followed by a strong break and close above 0.7988. Should this occur we will look for this market to test 0.8034. A strong break and close above 0.8034 could see this market post further gains into 0.8118.
On the downside, a close below 0.7903 could result in a retest of 0.7833. Should we break lower however, we will look for a move back into 0.7779 and if downside momentum continues we could see 0.7729 quickly before another pause.
EUR/USD – 1.1662 ( +196 or +1.71% )
The Euro continues to rally as we saw the ECB announce last week that monetary policy may change in the coming months. We will be discussing this in more detail in the LIVE CHAT ROOM.
VOLATILITY ALERTS:
Mon 17:00 – German Flash Manufacturing PMI
Mon 17:00 – German Flash Services PMI
Mon 17:30 – German Flash Manufacturing PMI
Mon 17:30 – German Flash Services PMI
Mon 18:00 – Euro Area Flash Manufacturing & Services PMI]
Tue 18:00 – German IFO Business Climate
Fri 17:00 – German Prelim CPI
For a sustained move higher we would like to see the EURO hold above 1.1613 this week. Should this occur we could see a strong move into 1.1746 before another pause. A strong break above 1.1746 could result in a fast move to 1.1822.
If the EURO cannot hold above 1.1613, we will look for a move back down into 1.1496. A break below this could see a quick move into 1.1453; and should momentum remain strong we will look for a move to 1.1347.
GBP/USD – 1.2992 ( -110 or -0.84% )
The Pound continues to confirm our scenario shown last month as we continue to see a grind higher.
VOLATILITY ALERTS:
Wed 18:30 – Prelim GDP quarterly
For a continued move to the upside, we would like to see Cable hold above 1.3035 as mentioned last week. Should this occur we will look for the Pound to rally into 1.3277 before a pause. A break of this level is very likely to see the GBP/USD test 1.3309, and if momentum is very strong we will look for a move to 1.3534.
If we fail to hold above 1.3035, we will look for a move back down to 1.2868. A break below this level could then see this market trade back into 1.2720 before a pause. If momentum is strong and we break and close below 1.2720, we could see a sharp move lower into 1.2600.
USD/JPY – 111.13 ( -140 or -1.24% )
The $/YEN has struggled to hold support and has continued to move lower. This market is also at key support and this week is set to be an interesting week for this market.
For a continued move to the upside we must now see this market hold above 111.09. Should this occur we will look for a move back up to 111.73, and a retest of the key level at 112.22. Should we break and close above 112.22 we could see a strong move into 113.87 – 114.08, and if momentum is very strong a move higher into 114.52 cannot be ruled out by week’s end.
If we cannot hold above 111.09, the YEN may see further downside into a key area between 110.10 – 109.94. A strong break and close below 109.94 may result in further downside into 109.21, and if downside momentum is very strong this week 108.31 cannot be ruled out.
COMMODITIES
GOLD – 1254 ( +26 or +2.12% )
GOLD has rallied all week into the close. Will GOLD continue to rally from here? We will be discussing this in the LIVE CHAT ROOM.
For a continued move higher we would like to see this market break strongly above 1257. Should this occur we will look for a move higher back into our key 1276 – 1278 area, and if momentum is very strong to the upside we could see a retest of 1294.
If Gold cannot break above 1257, we will look for a move back down into 1247. A strong break below this level could see a move down into 1235, and if momentum is very strong to the downside we cannot rule out a move to 1222.
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