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 – 5959 ( +109 or +1.86% ) The ASX has finally managed to close and clear above our important 5921 level. Can the ASX continue its run or are the bears about to come out and play? VOLATILITY ALERTS: Tue 14:30 – RBA Interest Rate Announcement Tue 14:30 – RBA Interest Rate Statement Thu 11:30 – Trade Balance Thu 11:30 – Building Approvals Fri 11:30 – RBA Monetary Policy Statement For a continued move higher we must now see the ASX hold above 5921. A strong close above this level could see a move to 5985. Should we break through 5985 we may see a quick retest of 6000; and if momentum is very strong we cannot rule out a move to 6140. If the ASX cannot hold above 5921,we will look for a move back down to 5875. A strong break and close below this level could see the ASX test 5823, and if momentum is strong we could quickly see a further move all the way back down into 5777. EUROPE DAX – 12583 ( +58 or +0.46% ) The DAX is testing a very key area here and it will be a very interesting week on this market. We will be discussing this in more detail in the LIVE CHAT ROOM . NOTE: Tuesday is a public holiday in Germany (Labour Day) VOLATILITY ALERTS: Mon 16:00 – German Retail Sales (monthly) Mon 16:00 – German Prelim CPI (monthly) Thu 01:30 – German Buba President Weidmann Speaks For a continued move to the upside we must now see the DAX hold above 12566. Should this occur we will look for a quick move into 12640; followed by continuation into 12714. If momentum to the upside is very strong we cannot rule out a move to 12830. If the DAX fails to hold above 12566, we expect to see a move back down into 12384 before a pause. A break below this level however means we may see more selling into 12198 and 12115; and if momentum is very strong to the downside we may see a sharp move into 12044.
US SP500 – 2672 ( +1 or +0.04% ) The S&P managed to close last week a measly 1 point higher and as such our levels remain unchanged. We will be discussing the impact of this in the LIVE CHAT ROOM this week. VOLATILITY ALERTS: Mon 22:30 – Personal Spending (monthly) Mon 23:45 – Chicago PMI Wed 00:00 – ISM Manufacturing PMI Thu 04:00 – FOMC Interest Rate – LIVE TV Thu 04:00 – FOMC Statement – LIVE TV Fri 00:00 – ISM Non-Manufacturing PMI Fri 22:30- Non-Farm Payrolls – LIVE TV For a move higher we would like to see the S&P hold above 2660. Should this occur we will look for a retest of the key 2680 level. A strong break and close above this level could see another retest of 2704, and if momentum remains strong to the upside we cannot rule out moves to 2720 and 2736. If we cannot hold above 2660, we could see this market continue to sell-off into 2638. A strong break through this level however could quickly see a move down to 2590 before a pause. If momentum to the downside is strong we may see a move lower into 2562; and a close below this level may result in a move down to 2540.
FOREX AUD/USD – 0.7581 ( -87 or -1.13% ) The Aussie Dollar is now at a very key level (0.7550) which we discussed many times with members last week. We will discuss this again in more detail in the MEMBER PORTAL this week. VOLATILITY ALERTS: Tue 14:30 – RBA Interest Rate Announcement Tue 14:30 – RBA Interest Rate Statement Thu 11:30 – Trade Balance Thu 11:30 – Building Approvals Fri 11:30 – RBA Monetary Policy Statement For a move higher we must now see this market hold above the key area between 0.7550 and 0.7561, followed by a retest of 0.7617. Should this occur we will look for this market to break higher and retest 0.7662; and if momentum is very strong we may see a quick move into 0.7702. If we cannot hold above 0.7550, we will look for this market to break lower into 0.7489; with a strong break below this level likely to result in a move to 0.7447 before a pause. EUR/USD – 1.2130 ( -157 or -1.28% ) Mario Draghi’s dovish remarks last week saw the EURO sell off aggressively only to rebound on Friday. This market is one to watch this week; particularly the 1.2042 – 1.2055 area. NOTE: Tuesday is a public holiday in Germany, Switzerland, France & Italy (Labour Day) VOLATILITY ALERTS: Mon 16:00 – German Retail Sales (monthly) Mon 16:00 – German Prelim CPI (monthly) Wed 19:00 – Prelim Flash GDP (quarterly) Thu 01:30 – German Buba President Weidmann Speaks Thu 19:00 – CPI Flash Estimate (annual) For a sustained move higher we would like to see the EURO hold above 1.2055 followed by a strong break up through 1.2167. Should this occur, we will then look for this market to retest 1.2268 before a pause; and if momentum is very strong we cannot rule out a move to 1.2305. If however the EURO cannot hold above 1.2055, we may likely see a move back down into the 1.2010 handle before a pause. This is an important level and any subsequent strong break and close below this level may see the EURO sell-off quickly into 1.1929 this week.
GBP/USD – 1.3778 ( -225 or -1.61% ) The Pound found some buyers later Friday afternoon at our 1.3743 level, following a horrid GDP number last week. This week is also key for this market. VOLATILITY ALERTS: Tue 18:30 – Manufacturing PMI Wed 18:30 – Construction PMI Thu 18:30 – Services PMI For a move to the upside we would like to see a strong break and close above 1.3875. A break above this level may result in a retest of 1.4075 and 1.4194. Should momentum remain strong to the upside, we could see a continued rally into 1.4223 by the week’s end. If we cannot close above 1.3875, we may see a quick move down into 1.3743 – 1.3725 before a pause of this move down. A continued sell-off however may see Cable push lower into 1.3683 and 1.3654; and a strong break below these levels could see this market trade down into 1.3534 this week. USD/JPY – 109.05 ( +142 or +1.32% ) The $/YEN has reached a key area at 109; with the next big area to watch at 109.95. We will be discussing this market in more detail in the MEMBER PORTAL . NOTE: There are multiple public holidays this week in Japan (Mon, Thu, Fri) For a move to the upside we must now see this market hold above 108.31, on its way to retesting 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 108.31, we could see a fast move lower into 107.75. A break below this level may result in a retest of 107.36 and this is where things get very interesting. A break below this level could mean a very sharp move down to 106.52.
COMMODITIES GOLD – 1323 ( -12 or -0.9% ) Gold has closed the week below 1333 having tested the big 1316 level which members should remember from many months ago. This market is behaving as expected. For a continued move higher we must now see this market hold above 1333. Should this occur we will look for a retest of 1355, and a close above this level could see further upside into 1365. If momentum remains very strong, we could see a big push into 1374 and 1394. If Gold cannot hold above 1333, we will look for a retest of 1322. A strong break below this level however could see GOLD sell off sharply into 1303, and if momentum is strong to the downside we may see a quick move down into 1294.
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