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 – 6232 ( + 140 or +2.3% ) The ASX was the strongest performer last week amongst Asian indices and is now approaching some of our key resistance levels. For a continued move higher we must now see the ASX hold above 6206. Should this occur we will look for a move into 6276, and if momentum to the upside is very strong we may see a stronger move into 6345. If the ASX cannot hold above 6206, we will look for a move back down to 6140 before a pause. A strong break and close below this level however could see the ASX retest 6070, and if downside momentum is very strong we cannot rule out a move all the way back down to 5985. EUROPE DAX – 12553 ( -512 or -3.92% ) The DAX sold off very aggressively last week with a complete reversal of the ECB Interest Rate announcement a week earlier. We will be discussing this market in the LIVE CHAT ROOM this week. VOLATILITY ALERTS: Mon 18:00 – German IFO Business Climate Thu 17:00 – German Prelim CPI (monthly) Fri 16:00 – German Retail Sales (monthly) For a continued move to the upside we must now see the DAX close above 12566. Should this occur we will look for a quick move into 12640; followed by continuation into 12714. If momentum to the upside is very strong we cannot rule out a move to 12830. If the DAX fails to close and hold above 12566, we expect to see a move back down into 12384 before a pause. A break below this level however means we may see more selling into 12198 and 12115; and if momentum is very strong to the downside we may see a sharp move into 12044.
US SP500 – 2753 ( -24 or -0.86% ) The S&P continues to consolidate around the key 2760 level and once again this will be the level to watch this week. We will be discussing this in more detail in the LIVE CHAT ROOM . VOLATILITY ALERTS: Wed 00:00 – CB Consumer Confidence Wed 22:30 – Core Durable Goods Orders (monthly) Thu 22:30 – Final GDP (quarterly) Fri 22:30 – Personal Spending (monthly) Fri 23:45 – Chicago PMI Sat 00:00 – Revised UoM Consumer Sentiment For a move higher we would like to see the S&P close and hold above 2760. Should this occur we will look for a retest of the key 2785 level. A strong break and close above this level could see another retest of 2802 and 2808, and if momentum remains strong to the upside we cannot rule out a move to 2836. If we cannot hold above 2760, we could see this market continue to sell-off into 2736 before a pause. If momentum to the downside is strong we may see a move lower into 2704; and a close below this level may result in a move down to 2680 and 2660.
FOREX AUD/USD – 0.7439 ( -3 or -0.04% ) After starting off the week poor, the Aussie dollar managed to rally strongly on Friday to finish the week flat. For a move higher we would like to see the AUD close above 0.7447, followed by a break and close above 0.7489. A strong break and close above this level could see a quick move to 0.7561 before a pause; and if momentum remains strong we will look for a move into 0.7617. If we cannot close above 0.7447, we will look for a move back down to 0.7364. A strong break below this level may result in a move back down into 0.7282 before another potential pause. Any subsequent breaks of this level however may result in a very fast move down to 0.7229. EUR/USD – 1.1656 ( +49 or +0.42% ) The EURO has put in an important double bottom and the question now is can this market hold support for a move higher, or will we reject at important resistance here for another leg down? We will be discussing the impact of this in more detail in the MEMBER PORTAL. NOTE: Friday is a public holiday in Italy (Feast of St Peter and St. Paul) VOLATILITY ALERTS: Fri 19:00 – CPI Flash Estimate (annual) 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 1.1738 before another pause. A strong break above 1.1738 could result in a fast move to 1.1822. If the EURO cannot hold above 1.1613, we could see a fast move down into 1.1496. A break below this could be followed by another quick move into 1.1453; and should momentum remain strong we cannot rule out a move to 1.1347.
GBP/USD – 1.3262 ( -19 or -0.14% ) The Pound has found buyers at a very important level however like the EURO- is now staring at resistance. We are now watching this market very very closely. VOLATILITY ALERTS: Wed 18:30 – BoE Governor Carney Speaks Wed 18:30 – BoE Financial Stability Report Fri 18:30 – Current Account For a continued move to the upside, we would like to see Cable close above 1.3309. Should this occur we will look for the Pound to rally into 1.3534 before a pause; however a strong break of this level could see a retest of 1.3875. If we cannot close above 1.3309, we will look for a quick move down into 1.3111. A break of this level may result in a retest of 1.3035; however any subsequent break could see this market sell-off quickly into 1.2868. Should the downside momentum continue, we cannot rule out a move to 1.2720. USD/JPY – 109.99 ( -67 or -0.61% ) Once again the $/YEN continues to test the key 110 handle. Is this the week we finally break down below this level, or will buyers view this failure to break below as a sign for higher prices? 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 another quick retest of 109.94. A break below this level however may result in a fast move down to 109.21, and if the downside remains strong we could see a strong sell-off into 108.31.
COMMODITIES GOLD – 1269 ( -11 or -0.86% ) GOLD has sold off for the second straight week and is now at very important levels. For a continued move higher we would like to see this market close above 1276-1278. Should this occur we could see a retest of 1285 before a pause. A strong break above 1285 could result in a move higher into 1294, and if momentum is very strong we cannot rule out a move into 1303. If Gold cannot close above 1276, we will look for a strong move back down into 1260 and potentially 1257 before a pause. A strong break below this level however could see GOLD trade down into 1247 before the week’s end.
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