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 – 6031 ( -34 or -0.56% ) The ASX once again spent the majority of last week in a tight consolidated range; and as such our comments remain the same. VOLATILITY ALERTS: Wed 11:30 – CPI (quarterly) For a continued move higher we must now see the ASX close above 6070 followed by a push into 6140. Should this occur we will look for a move into 6206, and if momentum to the upside remains strong we cannot rule out a move to 6276. If the ASX cannot hold above 6070, we will look for a move back down to 5921 before a pause. A strong break and close below this level however could see the ASX retest 5823, and if downside momentum is very strong we could see a move down to 5746.
EUROPE DAX – 12830 ( -134 or -1.03% ) The DAX managed to reverse all of its early weekly gains and is now in a precarious position. We will be discussing this in the MEMBER PORTAL this week. VOLATILITY ALERTS: Thu 18:00 – German Prelim GDP (quarterly) For a continued move to the upside we must now see the DAX hold above 12714. Should this occur, we will look for a strong move into 13050, and if momentum remains strong a push back higher into 13205. If the DAX fails to hold above 12714, we may see a retest back down into the key level of 12566. A close below this level is likely to see a retest of 12366; however if momentum is very strong to the downside we cannot rule out a move to 12166.
US SP500 – 3211 ( -11 or -0.34% ) Like the DAX, the S&P is also holding onto the important 3200 level going into a very important week. VOLATILITY ALERTS: Mon 22:30 – Core Durable Goods (monthly) Wed 00:00 – CB Consumer Confidence Thu 00:00 – Pending Home Sales (monthly) Thu 04:00 – FOMC Interest Rate Announcement Thu 22:30 – Advance 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 hold above 3208. Should this occur, we will look for a move higher into 3248. A strong break above this level however sets the stage for a move higher into 3274; and if momentum is very strong we cannot rule out a move to 3308. If we cannot hold above 3208, we could see this market move lower into 3166. A break of this level however may result in a quick move down to 3106; and if momentum to the downside remains strong we may see a fast move down to 2998 and 2974.
FOREX AUD/USD – 0. 7105 ( +112 or +1.6% ) The Aussie Dollar was strong last week having finally broken through the 70c ceiling. But is it in trouble of reversing this week? VOLATILITY ALERTS: Wed 11:30 – CPI (quarterly) For a move higher, we would first like to see the AUD close above 0.7113. Should this occur we will look for a move into 0.7197, and if upside momentum remains very strong we cannot rule out a move to 0.7236 before a pause. If the AUD cannot close above 0.7113, we will look for the AUD to 0.7014. A break and close below this level however could see a sharp decline into 0.6934; and if momentum to the downside remains strong we cannot rule out a move into 0.6830.
EUR/USD – 1.1655 ( +231 or +2.02% ) The EURO was the strongest of the majors last week and can the bulls continue the tear it has been on? We will be discussing this market again in the LIVE CHAT ROOM this week. For a move higher we would like to see the EURO hold above 1.1613. Should this occur we could see a continued move higher into 1.1678. A break of this level could see this market rally further to 1.1738 and if momentum is very strong, 1.1840 cannot be ruled out. If the EURO cannot hold above 1.1613, we could see a fast move down into 1.1496 before a pause. A strong break of this level may result in a move into 1.1453, however any weakness below this level could see a sharp drop into 1.1347.
GBP/USD – 1.2794 ( +228 or +1.81% ) The British Pound was also higher last week having broken the key 1.2720 level; but can it hold above here? For a continued move to the upside, we would like to see Cable hold above 1.2720, followed by a move higher into 1.2890 before a pause. If however momentum is very strong we may see a strong push into 1.3035. Should we fail to hold above 1.2720, we could see a move back down to 1.2622. A break below this level however could see Cable further depreciate to 1.2480 by the week’s end.
USD/JPY – 106.12 ( -90 or -0.84% ) The $/YEN is really testing a very big support area now and all eyes are on this market this week. For a move to the upside we must now see this market hold above 105.99. Should this occur we will look for a retest of 106.52, and if momentum is very strong we cannot rule out a move all the way back up to 108.31. If we cannot close above 106.52, we could see a move lower into 105.50. A break below this level may result in another sharp move lower into 104.97; and any further breaks to the downside may trigger a bigger move into 103.21.
COMMODITIES GOLD – 1901 ( +92 or +5.09% ) Gold has steamrolled its way through 1800 and is now approaching its all-time high. We will be discussing this market exclusively in the MEMBER PORTAL this week. For a continued move higher we must now see this market hold above 1900. Should this occur we will look for a move to 1920. A break above this level sets Gold up for moves to 1938 and potentially 1969. If Gold cannot hold above 1900, we will look for a move back down to 1871. A break below this level could see a move lower into 1830; and if momentum is very strong to the downside we cannot rule out a sharp move down to 1786.
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