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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.
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Trade View has entered the weekend Net Long.
ASX – 5971 ( + 144 or + 2.47% )
The ASX struggled to move higher again last week early on until Friday came. Then we saw a ‘POP’ with the ASX reversing all of the previous weeks loses. Is this now enough to break the ‘triple top formation’. We would really like to know what side of the fence you sit, is it continuation rally or reversal?
If Friday’s move is enough to restart the upward momentum then we would like to see 5998 tested again. The break could then create strong momentum pushing through to the area between 6108 – 47. If the rest of the world market push much higher we could see the ASX extend itself towards 6200.
The ASX needs to get back down past 5892 very quickly if the downside move is to restart. Once this occurs we would like to see 5842 broken and then a strong momentum long down bar break past our key FICM level of 5790.
DAX – 11812 ( + 143 or + 1.23% )
Even though we saw move higher it is obvious that this market really does not like uncertainty. Its all about the uncertain outcome of Greece.
Lets put some simple perspective on the situation:
May 6th – Greece needs to Pay the IMF 200 mill in Interest which they don’t have or can’t afford.
Eurozone technically cannot afford for Greece to leave as it could cause a ripple effect with others leaving, this would then put the Euro in jeopardy to survive.
We believe that “Grext” will not occur and the Eurozone will do what it takes to keep the Euro stable.
For the upmove to restart we would like to see 11897 broken early in the week followed by a strong push past 11984. If the momentum continues strong past these levels then 12164 could be seen. if there is a glimmer of hope with Greece then we could see the DAX reach for the stars, in this case 12460.
If a down move persists and no solution is found soon then a strong break past 11791 could lead the DAX back down towards 11621. If the proverbial hits the fan this week then our lower end target is between 11292 – 57.
S&P – 2118 ( + 35 or + 1.68% )
2112 was the level to break and last week saw plenty of volume as it broke through. We saw thousands of lots traded at a time as the break occurred reaching a high of 2121 for the week which was within our level mentioned last week.
For the S&P to now continue higher we would like to see 2112 become a strong level of support before a an early break and close past 2126 occurs. If the upward momentum is strong we could see 2137 broken with a long up bar. This could then lead the S&P to overextend itself towards the area between 2173 – 80.
If the S&P cannot stay above 2112 for long and we see an early break back down with a long down bar then 2101 could be seen very quickly. Once this occurs we could see 2085 and 2076 once again.
AUD.USD – 7820 ( + 38 or + 0.49% )
After a shaky start to the week we saw the AUD break back above 7800 to really test the resolve of the shorts. As mentioned last week “The key now is will it continue?”
For the up move to continue we would like to see and early strong break past 7869 before reaching 7927. If the short squeeze continues then 8088 could be seen quickly
For the longer term downside move to restart we would like to see a strong down bar break 7778 pushing through 7718. Once this occurs we could see 7635 again.
EUR.USD – 10873 ( + 67 or + 0.62% )
The EUR shorts all over twitter are getting tested. The key now is will we see another break past 110?? We will say one thing, if it does get ready for a ‘POP’.
All we can say is that it will Interesting to say the least.
For the EUR to make a move higher we would like to see an early break back above 10899 before reaching 110. If the upward momentum is strong and the short squeeze is on then a long up bar break past 110 could see 11166, and if the move is strong enough then we could see the EUR extend towards 11315 or even 11396.
For the longer term downleg to restart and continue would like to see an early break back down past 10780. If the momentum is strong we could see 10590 again and then a possible test of 10452.
GBP.USD – 15186 ( + 226 or + 1.51% )
Another strong week by the GBP reaching a high of 15187 which was only 22 points from our FICM level of 15209.
For the GBP to continue its strong move up we would like to see a long upbar break and close past 15209. This will then need to become a solid level of support before a move towards 15280 is made. The upper levels we will monitor closely are 15366, two of our FICM levels 15458 and 15522.
For the down move to restart 15209 needs to become a solid level of resistance before a break back down past 15140 occurs. If the down move is strong then 14950 could be seen quickly
USD.JPY – 11893 ( + 1 or + 0.01% )
Volatility here we come. Another Volatile week for this pair, chop, chop, chop bouncing up and down to close only 1 point higher. Therefore our comments from last week remain the same.
For the USD to continue its long term rally we would like to see a strong long up bar break through 11931 early in the week followed by a continuous break past the area between 11991 – 12017 before a new attempt at breaking our key FICM level of 12064 is made. If the break is strong and has momentum then we could see 12184 and possibly 12275.
If the USDJPY restarts back lower then we would like to see strong early break and close past our key FICM level of 11867 before further downside breaks are made. If this is done with strong downward momentum then we could see 11813, 11784 down to 11763 were it would complete the range set in March.
GOLD – 1179 ( – 25 or – 2.08% )
Last week saw a slow grind down for GOLD reaching a low of 1175 and closing at 1179. As mentioned previously “GOLD will need to break an important level between 1178 – 80”
For the upward move to restart then we would like to see 1178 – 80 become a strong level of support before a bounce towards 1192 is made. Once this occurs we could see 1208 again.
For the down move GOLD will need to break an important level between 1178 – 80. If this occurs with a long down bar then it could continue down towards 1167 and settling near 1149 again.
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