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 – 6363 ( -732 or -10.32% )
Following a global market sell-off, the ASX is now back down to levels we have not seen since Q1-Q2 2019. VOLATILITY ALERTS: Mon 11:30 – Company Operating Profits (quarterly) Tue 11:30 – Building Approvals (monthly) Tue 14:30 – RBA Interest Rate Wed 11:30 – GDP (quarterly) Thur 11:30 – Trade Balance Fri 11:30 – Retail Sales For a continued move higher we must now see the ASX close above 6435. Should this occur we will look for a test of 6500, and above this 6550. If momentum to the upside is very strong we cannot rule out a move to 6670. If the ASX cannot close above 6435, we will look for a move back down to 6350 for strong support. A strong break and close below this level however could see the ASX retest 6276, and if downside momentum is very strong we could see a move down to 6180. EUROPE
DAX – 11929 ( -1629 or -12.02% )
The DAX was also aggressively sold off last week having failed to break through one of our major levels. For a continued move to the upside we must see the DAX close above 12198. Should this occur, we will look for a move into 12384 before a pause. If momentum is very strong we cannot rule out a blow off move to 12566 and 12750. If the DAX fails to close above 12198, we will look for a move back down to 11875. Any break below this level however could see the DAX sell-off sharply into 11755 this week; and if downside momentum is very strong we cannot rule out a move down to 11519.
SP500 – 2989 ( -349 or -10.46% )
With the S&P at critical levels now, we are watching this market very closely this week and will be discussing this extensively in the MEMBER PORTAL . VOLATILITY ALERTS: Tue 02:00 – ISM Manufacturing PMI Thu 02:00 – ISM Non-Manufacturing PMI Sat 00:30 – Non-Farm Employment Numbers
For a move higher we would like to see the S&P hold above 2960. Should this occur, we will look for a move to 2985. A strong break above this level however could see the S&P trade above 3003, and if momentum is very strong, we may see a big move into 3066. If we cannot hold above 2960, we could see this market retest 2902. A break of this level however may result in quick move down to 2885; and if momentum to the downside remains strong we may see a fast move down to 2750. FOREX
AUD/USD – 0. 6507 ( -119 or -1.8% )
The Aussie Dollar continues to post multi-year lows and we could see further room to the downside. We will be discussing the impact of this in the LIVE CHAT ROOM . VOLATILITY ALERTS: Mon 11:30 – Company Operating Profits (quarterly) Tue 11:30 – Building Approvals (monthly) Tue 14:30 – RBA Interest Rate Wed 11:30 – GDP (quarterly) Thur 11:30 – Trade Balance Fri 11:30 – Retail Sales For a move higher, we would first like to see the AUD hold above 0.6598. Should this occur, we will look for a retest of of 0.6692, and if upside momentum remains very strong, we may see a push higher into 0.6762 before a pause. If the AUD cannot close above 0.6598, we could see this market retest 0.6457. If momentum to the downside is very strong, we could see sharp moves to 0.6398 and 0.6320.
EUR/USD – 1.1028 ( +181 or +1.67% )
The EURO managed to put in a short-term low and posted a strong reversal on Friday. VOLATILITY ALERTS: Tue 09:00 – CPI Flash Estimate (annual) For a move higher this week, we would like to see the EURO close above 1.1033 on its way to retesting 1.1117. Should this occur, we will look for a move to 1.1197; and if momentum is very strong we cannot rule out a move to 1.1249. 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 a move lower into 1.0902 is very possible; and if momentum is very strong to the downside we could see a fast and sharp move down into 1.0814.
GBP/USD – 1.2814 ( -142 or -1.1% )
The UK broke down last week however can it hold the all-important 1.2720? We will be discussing this market again in the LIVE CHAT ROOM this week. VOLATILITY ALERTS: Fri 04:00 – BoE Governor Carney Speaks For a continued move to the upside, we would like to see Cable hold above 1.2720, followed by a retest of 1.2868 before a pause. Should this occur we will look for a move to 1.3035 and 1.3161; and if momentum is very strong we could see a re-test of 1.3191. On the downside, should we fail to hold above 1.2720, we will be watching the key level at 1.2622 very closely. A strong break below this level however sets this market up for a bigger move down into 1.2480. USD/JPY – 108.08 ( -348 or -3.12% )
The $/YEN has faded to the downside as quickly as it rallied. We are now at a critical junction for this market. For a move to the upside we must now see this market hold above 107.75, on its way to retesting 108.31 before a pause. A strong break and close above this level could then see the $/YEN rally into 109.21, and if momentum is very strong we could see moves to 109.94. If we cannot hold above 107.75, we could see a fast move lower into 107.36. A break below this level may result in a retest of 106.52 before a pause; however any breaks below this level could mean a very sharp move down to 105.50. COMMODITIES GOLD – 1585 ( -58 or -3.53% )
Gold was sold off on Friday in its biggest one day sell-off in many years. For a continued move higher we must now see this market hold above 1574, followed by a close above 1605. A break and close above this level sets the stage for a move to 1620; and if momentum is very strong to the upside we cannot rule out a move to 1632. If Gold cannot hold above 1574, we will look for a sharp move back down to 1525. This is a pivotal area; and any break below this level sets the stage for a much larger move down to 1504 and 1474.
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