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 ASX – 5983 ( +35 or +0.59% ) The ASX again struggled to test and hold above 6000 last week and the question this week will again be whether we can hold above this level. We will be discussing this market in detail in the LIVE CHAT ROOM . VOLATILITY ALERTS: Thu 11:30 – Private Capex (quarterly) Thu 11:30 – Building Approvals (monthly) For a continued move higher we must now see the ASX close above 6000. Should this occur we will look for this market to test 6070, and if momentum is very strong a move to 6140 is very possible this week. If the ASX cannot hold above 6000, we could see a move back down to 5921. A break below this may result in a retest of 5875, and if momentum to the downside continues we will look for a sell-off into 5823 before a pause.
EUROPE DAX – 13064 ( +95 or +0.73% ) The DAX sold off for the second straight week before finding support on Wednesday at some very key levels. VOLATILITY ALERTS: Wed 18:00 – German Prelim CPI Thu 18:00 – German Retail Sales For a continued move to the upside we must now see the DAX close and hold above 13050. Should this occur we will look for a strong move into 13205, and if momentum remains strong a push back higher into 13388. If the DAX fails to close above 13050 , we may see a push lower back into the key level of 12921. A close below this level is likely to see a retest of 12870; however if momentum is very strong and we break through 12830 we could see a strong sell-off into 12714.
US SP500 – 2602 ( +26 or +1.01% ) The S&P managed to grind higher to yet again new highs despite the Thanksgiving holiday period. We will be discussing this in detail in the LIVE CHAT ROOM this week. NOTE: Friday is a holiday in the US (Thanksgiving Day) VOLATILITY ALERTS: Tue 02:00 – New Home Sales Wed 2:00 – CB Consumer Confidence Thu 00:30 – Prelim GBP (quarterly) Thu 02:00 – FED Chair Yellen Testifies Sat 02:00 – ISM Manufacturing PMI For a move higher we would like to see the S&P hold above 2590. Should this occur we will look for a move higher into 2628, and if momentum is very strong we cannot rule out a strong push into 2648 and 2660. If we cannot hold above 2590, we will look for a move back down to 2574 and 2562. A break below this may likely see a retest of 2550 and 2540, and if momentum is very strong on the downside we could see a sell-off into 2524.
FOREX AUD/USD – 0.7610 ( +46 or +0.61% ) The Aussie Dollar has bounced off our key area and we will be discussing the importance of this bounce and key scenarios this week in the LIVE CHAT ROOM . VOLATILITY ALERTS: Thu 11:30 – Private Capex (quarterly) Thu 11:30 – Building Approvals (monthly) For a move higher we must now see this market hold above 0.7561 followed by a close above 0.7617. Should this occur we will look for a retest of 0.7677. A strong break and close above this key level could see this market rally to 0.7729, and if momentum is strong our next level higher is 0.7833. Should the Aussie Dollar fail to hold above 0.7561, a strong break below 0.7535 could see this market head to 0.7489 before a pause. If momentum to the downside continues, we will look for a move to 0.7447 before the end of the week. EUR/USD – 1.1931 ( +142 or +1.2% ) The EURO has again rallied strongly last week amidst geopolitical concerns and appears to be targeting the key 1.2000 level, having bounced straight off 1.1834. NOTE: Friday is a holiday in Italy (Immaculate Conception Day) VOLATILITY ALERTS: Wed 18:00 – German Prelim CPI Thu 18:00 – German Retail Sales Thu 21:00 – CPI Flash Estimate (annual) For a sustained move higher we would like to see the EURO break and close strongly above 1.2042. Should this occur we will look for the EURO to rally into 1.2167, and if momentum is very strong we will look for a move into 1.2229. If the EURO cannot hold above 1.2042, we will look for a move back down into 1.1834. A strong break of this level could then see a move back down into 1.1738, and if downside momentum is very strong we could quickly see a move lower into 1.1678. GBP/USD – 1.3329 ( +113 or +0.86% ) Cable still remains in a sideways range despite a small move higher into the end of last week. VOLATILITY ALERTS: Tue 18:00 – BoE Financial Stability Report Tue 18:00 – Bank Stress Results Fri 20:30 – Manufacturing PMI For a continued move to the upside, we would like to see Cable hold above 1.1.3309. 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 hold above 1.3277, we will look for a retest of 1.3035. A break below this level could see this market sell-off quickly into 1.2868, and should the downside momentum continue we will look for a move to 1.2720.
USD/JPY – 111.52 ( -62 or -0.55% ) The $/YEN also found support at one of our key levels and we will be discussing this in more detail in the MEMBER PORTAL . For a move to the upside we must now see this market hold above 111.09, on its way to retesting 111.73. Should this occur we will look for a retest of 112.68 before another pause. However a strong break and close above this level could see the YEN rally strongly into 113.87. If we cannot hold above 111.09, we are likely to see a retest of 110.45. A strong break and close below this level could result in a move back down to 109.94. This market should be watched closely for a break below this level as we could see some aggressive selling on a break below.
COMMODITIES GOLD – 1288 ( -6 or -0.46% ) As quickly as it broke out of the range, Gold has come back into the range. We will be discussing this in more detail in the MEMBER PORTAL . For a continued move higher we would like to see this market close above 1294 followed by a move into 1303. A strong break past this level could see a move into 1313; and if momentum is very strong we will look for a move into 1322. If Gold cannot close above 1294, we we will look for a strong move back down into 1278-1276. A break below this level could see a quick test of 1266 however should this level break we are likely to see 1257 very quickly
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