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 – 5980 ( -3 or -0.05% ) The ASX again struggled to test and hold above 6000 last week and the question this week will again be whether we can hold above this level. We will be discussing this market in detail in the LIVE CHAT ROOM . Mon 11:30 – Company Operating Profits (quarterly) VOLATILITY ALERTS: Tue 11:30 – Current Account Tue 11:30 – Retail Sales Tue 14:30 – RBA Interest Rate Announcement Wed 11:30 – GDP (quarterly) Thu 11:30 – Trade Balance Fri 11:30 – New Home Loans (monthly) For a continued move higher we must now see the ASX close above 6000. Should this occur we will look for this market to test 6070, and if momentum is very strong a move to 6140 is very possible this week. If the ASX cannot hold above 6000, we could see a move back down to 5921. A break below this may result in a retest of 5875, and if momentum to the downside continues we will look for a sell-off into 5823 before a pause.
EUROPE DAX – 12955 ( -109 or -0.83% ) The DAX continues it correction, having come into a very key area before bouncing on Friday on some higher volatility. VOLATILITY ALERTS: Mon – EUROGROUP Meetings (all day) Fri 03:00 – ECB President Draghi Speaks For a continued move to the upside we must now see the DAX close and hold above 13050. Should this occur we will look for a strong move into 13205, and if momentum remains strong a push back higher into 13388. If the DAX fails to close above 13050 , we may see a push lower back into the key level of 12921. A close below this level is likely to see a retest of 12870; however if momentum is very strong and we break through 12830 we could see a strong sell-off into 12714 and 12566.
US SP500 – 2644 ( +42 or +1.61% ) The S&P yet again pushed higher last week, all but reaching our long-term target of 2660. We will be discussing this in detail in the LIVE CHAT ROOM this week. Tue 02:00 – Factory Orders (monthly) VOLATILITY ALERTS: Wed 00:30 – Trade Balance Sat 00:30 – Non-Farm Employment Report – LIVE TV For a move higher we would like to see the S&P close above 2648. Should this occur we expect a retest of 2660. A close above this level could see a sharp move to 2677, and if momentum is very strong we cannot rule out a strong push into 2690. If we cannot hold above 2648, we will look for a move back down to 2628. However a close below this level may see the market retest 2600 with further downside to 2590. If momentum is very strong to the downside a move to 2562 cannot be ruled out.
FOREX AUD/USD – 0.7611 ( +1 or +0.01% ) The Aussie Dollar was sold early last week before again reversing at our key level. We have spoken about this to members in our MEMBER PORTAL and this market is playing out exactly as anticipated. VOLATILITY ALERTS: Mon 11:30 – Company Operating Profits (quarterly) Tue 11:30 – Current Account Tue 11:30 – Retail Sales Tue 14:30 – RBA Interest Rate Announcement Wed 11:30 – GDP (quarterly) Thu 11:30 – Trade Balance Fri 11:30 – New Home Loans (monthly) For a move higher we must now see this market hold above 0.7561 followed by a close above 0.7617. Should this occur we will look for a retest of 0.7677. A strong break and close above this key level could see this market rally to 0.7729, and if momentum is strong our next level higher is 0.7833. Should the Aussie Dollar fail to hold above 0.7561, a strong break below 0.7535 could see this market head to 0.7489 before a pause. If momentum to the downside continues, we will look for a move to 0.7447 before the end of the week. EUR/USD – 1.1898 ( -33 or -0.28% ) The EURO spent the majority of last week in a sideways consolidation and as such our levels remain the same. VOLATILITY ALERTS: Mon – EUROGROUP Meetings (all day) Fri 03:00 – ECB President Draghi Speaks For a sustained move higher we would like to see the EURO break and close strongly above 1.1942 on its way to retesting the important 1.2000 level. A break through this level could see this market then retest 1.2042. Should a rally ensue, we will look for the EURO to rally into 1.2167, and if momentum is very strong we will look for a move into 1.2229. If the EURO cannot hold above 1.2042, we will look for a move back down into 1.1834. A strong break of this level could then see a move back down into 1.1738, and if downside momentum is very strong we could quickly see a move lower into 1.1678. GBP/USD – 1.3472 ( +143 or +1.07% ) The Pound has broken out of its sideways range only to come into another key level at 1.3534 before reversing on Friday. This will again be the key level to watch this week. VOLATILITY ALERTS: Mon 20:30 – Construction PMI Tue 20:30 – Services PMI Thu 19:30 – Halifax HPI (monthly) Fri 20:30 – Manufacturing Production (monthly) Fri 20:30 – Goods Trade Balance For a continued move to the upside, we would like to see Cable close above 1.3524, on its way to retesting 1.3743. A break of this level could see the Pound quickly reach 1.3875 before a pause; and if momentum is very strong a move to 1.4075 cannot be ruled out. If we fail to close and hold above 1.3524, we may see this market trade back into 1.3436. A strong break below this level could then see this market trade down to 1.3277 before a pause; and if momentum is very strong to the downside we cannot rule out a move to 1.3156.
USD/JPY – 112.17 ( +65 or +0.58% ) A well defined bottom set the stage for a $/YEN reversal last week and this is exactly what we saw leading up into Friday’s shake and bake move. We will be discussing the impact of this move in more detail in the MEMBER PORTAL this week. VOLATILITY ALERTS: Mon 16:00 – Consumer Confidence Tue 16:00 – BoJ Core CPI (annual) Fri 10:50 – Final GDP (quarterly) Fri 10:50 – Current Account For a move to the upside we must now see this market hold above 111.73. Should this occur we will look for a retest of 112.68 before another pause. However a strong break and close above this level could see the YEN rally strongly into 113.87. If we cannot hold above 111.73, we are likely to see a retest of 111.09. A strong break and close below this level could result in a move back down to 110.45, and if momentum to the downside is very strong we may see a very sharp move down into 109.94.
COMMODITIES GOLD – 1280 ( -8 or -0.62% ) GOLD has come back down into its big sideways range and this market is setting up for a big move, so GET READY . For a continued move higher we would like to see this market close above 1294 followed by a move into 1303. A strong break past this level could see a move into 1313; and if momentum is very strong we will look for a move into 1322. If Gold cannot close above 1294, we we will look for a move back down into the strong area of support between 1278-1276. A break below this level could see a quick test of 1266 however should this level break we are likely to see 1257 and 1247 very quickly.
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