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 – 5716 ( +19 or +0.33% ) The ASX continues to remain in a narrow sideways consolidation and as we mentioned in the MEMBER PORTAL last week GET READY. We will be discussing this market exclusively in the LIVE CHAT ROOM . VOLATILITY ALERTS: Tue 14:30 – RBA Interest Rate Announcement Wed 11:30 – Monthly Building Approvals Thu 11:30 – Trade Balance Fri 11:30 – RBA Monetary Policy Statement Fri 11:30 – Retail Sales For a continued move higher we would like to see the ASX hold above 5671, followed by a strong break and close above 5746. Should this occur we will look for a retest of 5777, and a strong close above this could result in a quick move to 5823. If momentum is strong we will then look for a rally into 5875 and 5921. If the ASX cannot hold above 5671, we are likely to see another retest of 5606. A close below this level may result in more selling into 5582 and if momentum is very strong 5521 cannot be ruled out.
EUROPE DAX – 12180 ( -72 or -0.59% ) The DAX is once again testing a very key area and we last week we saw the first signs of a potential reversal higher. We will be discussing this market in more detail in the MEMBER PORTAL . VOLATILITY ALERTS: Mon 16:00 – German Retail Sales Mon 19:00 – Annual CPI Flash Estimate Tue 19:00 – Quarterly Prelim Flash GDP For a continued move to the upside we must now see the DAX close above 12198. Should this occur we will look for a move back up to 12384; and if we can break strongly above this area this sets the DAX up for a retest of 12536. A strong break of 12536 could then see a move into 12714. If the DAX fails to close above 12198, we are likely to see a move lower into 12044 – 12035. This is a very key area and a break below could see a sharp move down into 11875.
US SP500 – 2473 ( +2 or +0.08% ) The S&P managed to close only marginally higher last week and as such our levels remain the same. This week we have the all-important jobs number. VOLATILITY ALERTS: Mon 23:45 – Chicago PMI Tue 00:00 – Pending Home Sales Wed 00:00 – ISM Manufacturing PMI 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 our key level at 2465, followed by a strong break and close above 2477. Should we continue to break higher, we will look for a move to 2511 before another pause. If we cannot hold above 2465, we will look for a move down to retest 2450. A strong break and close below this level means we could see the S&P trade lower into 2445 and 2440. If momentum to the downside is strong, a move down into 2431 by the end of the week cannot be ruled out.
FOREX AUD/USD – 0.7986 ( +74 or +0.94% ) The Aussie dollar continues to rally however did find strong resistance near our 0.8034 level. This is the key level to watch this week. VOLATILITY ALERTS: Tue 14:30 – RBA Interest Rate Announcement Wed 11:30 – Monthly Building Approvals Thu 11:30 – Trade Balance Fri 11:30 – RBA Monetary Policy Statement Fri 11:30 – Retail Sales For a move higher we must now see this market hold above 0.7903, followed by a strong break and close above 0.7988. Should this occur we will look for this market to test 0.8034. A strong break and close above 0.8034 could see this market post further gains into 0.8118. On the downside, a close below 0.7903 could result in a retest of 0.7833. Should we break lower however, we will look for a move back into 0.7779 and if downside momentum continues we could see 0.7729 quickly before another pause.
EUR/USD – 1.1748 ( +86 or +0.74% ) Like the Aussie Dollar, the Euro also continues to rally and it too is now facing stiff resistance. We will be discussing this in more detail in the LIVE CHAT ROOM . VOLATILITY ALERTS: Mon 16:00 – German Retail Sales Mon 19:00 – Annual CPI Flash Estimate Tue 19:00 – Quarterly Prelim Flash GDP For a sustained move higher we would like to see the EURO hold above 1.1613 this week. Should this occur we could see a strong move into 1.1746 before another pause. A strong break above 1.1746 could result in a fast move to 1.1822. If the EURO cannot hold above 1.1613, we will look for a move back down into 1.1496. A break below this could see a quick move into 1.1453; and should momentum remain strong we will look for a move to 1.1347.
GBP/USD – 1.3135 ( + 143 or +1.1% ) What more can we say about the Pound? Up Up and away she goes. VOLATILITY ALERTS: Tue 18:30 – Manufacturing PMI Wed 18:30 – Construction PMI Wed 18:30 – Services PMI Wed 21:00 – BoE Interest Rate Announcement – LIVE TV Wed 21:30 – BoE Governor Carney Speaks – LIVE TV For a continued move to the upside, we would like to see Cable hold above 1.3035 as mentioned last week. Should this occur we will look for the Pound to rally into 1.3277 before a pause. A break of this level is very likely to see the GBP/USD test 1.3309, and if momentum is very strong we will look for a move to 1.3534. If we fail to hold above 1.3035, we will look for a move back down to 1.2868. A break below this level could then see this market trade back into 1.2720 before a pause. If momentum is strong and we break and close below 1.2720, we could see a sharp move lower into 1.2600.
USD/JPY – 110.69 ( -44 or -0.4% ) The $/YEN is again trying to form a base however with plenty of data out this week we cannot rule out spike moves to the downside now. For a continued move to the upside we must now see this market close strongly above 111.09. Should this occur we will look for a move back up to 111.73, and a retest of the key level at 112.22. Should we break and close above 112.22 we could see a strong move into 113.87 – 114.08, and if momentum is very strong a move higher into 114.52 cannot be ruled out by week’s end. If we cannot close above 111.09, the YEN may see further downside into a key area between 110.10 – 109.94. A strong break and close below 109.94 may result in further downside into 109.21, and if downside momentum is very strong this week 108.31 cannot be ruled out.
COMMODITIES GOLD – 1269 ( + 15 or +1.2% ) GOLD has now rallied for 3 consecutive weeks. Could we see a big reversal this week? We will be discussing this in the LIVE CHAT ROOM . For a continued move higher we would like to see this market hold above 1257. Should this occur we will look for a move higher back into our key 1276 – 1278 area, and if momentum is very strong to the upside we could see a retest of 1294. If Gold cannot hold above 1257, we will look for a move back down into 1247. A strong break below this level could see a move down into 1235, and if momentum is very strong to the downside we cannot rule out a move to 1222.
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