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 – 6853 ( +126 or +1.87% ) The ASX posted all time highs on Thursday before some profit taking came into the market on Friday. We will be discussing this in the MEMBER PORTAL this week. VOLATILITY ALERTS: Mon 11:30 – Building Approvals (monthly) Tue 11:30 – Current Account Tue 14:30 – RBA Interest Rate Announcement Wed 11:30 – GDP (quarterly) Thu 11:30 – Retail Sales (monthly) For a continued move higher we must now see the ASX hold above 6804. Should this occur we will look for a re-test of 6850. A strong break of this level however is likely to see the ASX rally to new all-time highs into 6905, and if momentum is very strong we cannot rule out a move to 7011. If the ASX cannot hold above 6804, we will look for a move back down to 6720. A strong break and close below this level however could see the ASX move lower into 6650 before a pause; and if downside momentum is very strong, we could see a move down to 6544.
EUROPE DAX – 13230 ( +41 or +0.31% ) The DAX continues to trade in a very tight sideways consolidation and we are watching this market this week for a potential breakout again this week. VOLATILITY ALERTS: Tue 01:00 – ECB President Lagarde speaks For a continued move to the upside we would now like to see the DAX hold above 13205, on its way to retesting 13388. A strong break and close above this level could see a fast move to 13520, and if momentum is very strong we could see a sharp move higher into 13697. If the DAX fails to hold above 13205, we could see a move back down into 13050. A break below this level could mean a further move down into 12921, and if momentum is very strong we could see a fast move down to 12830.
US SP500 – 3143 ( +31 or +1% ) The S&P again made new all time highs and the question now is this market due for a correction or are we going higher? VOLATILITY ALERTS: Tue 02:00 – ISM Manufacturing PMI Sat 00:30 – Non-Farm Unemployment – LIVE TV For a move higher we would like to see the S&P hold above 3115. Should this occur, we will look for a move to 3150. A strong break above this level however sets the stage for a move higher into 3159 and 3166; and if momentum is very strong we cannot rule out a move to 3210. If we cannot hold above 3115, we could see this market move lower into 3100. A break of this level however may result in quick move down to 3066; and if momentum to the downside remains strong we may see a fast move down to 3020.
FOREX AUD/USD – 0.6761 ( -24 or -0.35% ) The Aussie Dollar continues to grind lower into a very important support area now. VOLATILITY ALERTS: Mon 11:30 – Building Approvals (monthly) Tue 11:30 – Current Account Tue 14:30 – RBA Interest Rate Announcement Wed 11:30 – GDP (quarterly) Thu 11:30 – Retail Sales (monthly) For a move higher, we would first like to see the AUD close above 0.6800 on its way to retesting 0.6873. Should this occur, we will look for a move into 0.6934, and if upside momentum remains very strong we cannot rule out a move to 0.7014 before a pause. If the AUD cannot close above 0.6800, we will look for a move lower into 0.6692. If momentum is very strong to the downside we may see a move into 0.6598.
EUR/USD – 1.1018 ( -1 or -0.01% ) The Euro remained virtually unchanged since last week and as such our levels remain the same. VOLATILITY ALERTS: Tue 01:00 – ECB President Lagarde speaks For a move higher this week, we would like to see the EURO close above 1.1033; followed by a break back above 1.1197. Should this occur, we cannot rule out a move to 1.1249 if momentum remains strong. If the EURO cannot close above 1.1033, we could see a move back down into 1.0977. If this market continues to sell-off, we could see a sharp move down into 1.0902 and 1.0814 by the week’s end.
GBP/USD – 1.2932 ( +104 or +0.81% ) Cable is still in a large sideways consolidation. We will be discussing this consolidation in the LIVE CHAT ROOM this week. For a move to the upside, we would like to see Cable hold above 1.2868, followed by a retest of 1.3035 before a pause. Should this occur, we will look for a move to 1.3161 – 1.3191. On the downside, should we fail to hold above 1.2868, we will be watching the key level at 1.2720 very closely. A strong break below this level however sets this market up for a bigger move down into 1.2622, and if momentum is very strong we cannot rule out a move to 1.2480.
USD/JPY – 109.47 ( +83 or +0.76% ) The $/YEN continues to rally however is this move gaining strength or losing momentum? For a move to the upside we must now see this market hold above 109.21, on its way to retesting 109.94 before a pause. A strong break and close above this level could then see the $/YEN rally into 110.31, and if momentum is very strong we could see moves to 110.78 and 111.09. 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 before a pause. Should we break lower however, we could see a strong move down into 107.36.
COMMODITIES GOLD – 1463 ( +1 or +0.07% ) Gold has once again respected our key levels of 1450 and 1460, and we will be watching these levels again this week. For a continued move higher we must now see this market hold above 1450. Should this occur, we will look for a retest of 1470; and if momentum remains very strong, a strong break above this level could see Gold rally quickly into 1480 and 1505. If Gold cannot hold above 1450, we will look for a move back down into 1433. A strong break and close below this level could send this market lower into 1416, and if momentum is strong to the downside we cannot rule out a move lower into 1402.
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