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 – 6001 ( -54 or -0.89% ) The ASX continues to correct and this will be an important week for this market. Will the buyers return? VOLATILITY ALERTS: Wed 11:30 – Building Approvals (monthly) Thu 11:30 – Private Capex (quarterly) For a continued move higher we must now see the ASX close above 6010 followed by a retest of 6070. Should this occur a strong break and close above 6070 may result in continued upside into 6140. A strong break above this level could see a strong move into 6206 by the week’s end. If the ASX cannot close above 6010, we will look for a move back down to 5985. A strong break and close below this level could see the ASX retest 5921, and if downside momentum is strong we could quickly see a further move all the way back down into 5875. EUROPE DAX – 12931 ( -144 or -1.1% ) The DAX has put in a short-term high right near our key 13205 level, and the question this week will be will we see a retest of this? VOLATILITY ALERTS: Wed 16:00 – German Retail Sales (monthly) Wed 16:00 – German Prelim CPI (monthly) For a continued move to the upside we must now see the DAX close above 13050. Should this occur we will look for a strong move into 13205, and if momentum remains strong a push back higher into 13301. If the DAX fails to close above 13050, we may see a retest back down into the key level of 12921.A close below this level is likely to see a retest of 12714; however if momentum is very strong to the downside we cannot rule out a move to 12566.
US SP500 – 2721 ( +9 or +0.33% ) The S&P continues to remain in a sideways consolidation. Do we break higher or lower from here? We will be discussing the impact of this in the LIVE CHAT ROOM this week. NOTE: Monday is a public holiday in the US (Memorial day) VOLATILITY ALERTS: Wed 22:30 – Prelim GDP (quarterly) Thu 23:45 – Chicago PMI Fri 22:30 – Non-Farm Employment – LIVE TV For a move higher we would like to see the S&P hold above 2736. Should this occur we will look for a retest of the key 2760 level. A strong break and close above this level could see another retest of 2785, and if momentum remains strong to the upside we cannot rule out a move to 2808. If we cannot hold above 2736, we could see this market continue to sell-off into 2704 before a pause. If momentum to the downside is strong we may see a move lower into 2680; and a close below this level may result in a move down to 2660 and 2638.
FOREX AUD/USD – 0.7546 ( +34 or +0.45% ) The Aussie Dollar is attempting to break higher however continues to consolidate around the key 0.7561 level. We will be discussing this in more detail in the LIVE CHAT ROOM . VOLATILITY ALERTS: Wed 11:30 – Building Approvals (monthly) Thu 11:30 – Private Capex (quarterly) For a move higher we must now see this market hold above 0.7489, followed by a close above of the key area between 0.7550 and 0.7561. A break above this level could see this market break higher and retest 0.7617; and if momentum is very strong we may see a quick move into 0.7662. If we cannot hold above 0.7489, we will look for this market to break lower into 0.7447 before another pause. A strong break and close below this level however could mean this market sells off sharply into 0.7364. EUR/USD – 1.1650 ( -119 or -1.01% ) As the Euro continues to nosedive all eyes will be on this market this week for any sign of a reversal higher now. VOLATILITY ALERTS: Wed 16:00 – German Retail Sales (monthly) Wed 16:00 – German Prelim CPI (monthly) Thu 19:00 – CPI Flash Estimate (annual) For a sustained move higher we would like to see the EURO close above 1.1678, followed by a retest of 1.1738. Should this occur, we will then look for this market to retest 1.1834; and if momentum is very strong we cannot rule out a move to 1.1927. If however the EURO cannot hold above 1.1678, we may likely see a move lower into into the 1.1613. A strong break and close below this level however could see the EURO sell-off sharply down into 1.1496.
GBP/USD – 1.3297 ( -174 or -1.29% ) Like the EURO Cable was also sold last week and we are now approaching a key level. NOTE: Monday is a public holiday in the UK (Spring Bank Holiday) VOLATILITY ALERTS: Fri 18:30 – Manufacturing PMI For a continued move to the upside, we would like to see Cable hold 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 hold above 1.3309, we will look for a quick move down into 1.3277. A break of this level however may result in 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 cannot rule out a move to 1.2720. USD/JPY – 109.41 ( -133 or -1.2% ) The $/YEN sold off aggressively last week and we are now watching this market for some potential consolidation. We will be discussing this in more detail in the MEMBER PORTAL . VOLATILITY ALERTS: Wed 10:00 – BoJ Governor Kuroda speaks For a move to the upside we must now see this market hold above 109.21. A strong break and close above this level could then see the $/YEN rally into 109.95, and if momentum is very strong we could see moves to 110.31 and 110.78. If we cannot hold above 109.21, we could see a fast move lower into 108.31. A break below this level may result in a retest of 107.75, and if the downside remains strong we could see a further sell-off into 107.36. A break below this level however could mean a very sharp move down to 106.52.
COMMODITIES GOLD – 1301 ( +8 or +0.62% ) Last week we noted ‘it was now or never for Gold’. Since then Gold has broken out to the upside and the question this week will be: Will GOLD rally higher or consolidate back down into a range? For a continued move higher we must now see this market hold above 1294. Should this occur we will look for a retest of 1303. A strong close above this level could see further upside into 1313; and if momentum remains very strong, we could see a big push into 1322 and 1333. If Gold cannot hold above 1294, we will look for a move back down into 1285. A strong break and close below this level however takes us down into the key 1276 – 1278 area which is very important and will be watched closely.
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