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 – 6027 ( +26 or +0.43% ) As anticipated last week the ASX has found some buyers. Now can this market begin a rally? VOLATILITY ALERTS: Mon 11:30 – Retail Sales (monthly) Tue 14:30 – RBA Interest Rate Announcement Wed 11:30 – GDP (quarterly) Thu 11:30 – Trade Balance For a continued move higher we must now see the ASX close above 6010 followed by a retest of 6070. Should this occur a strong break and close above 6070 may result in continued upside into 6140. A strong break above this level could see a strong move into 6206 by the week’s end. If the ASX cannot close above 6010, we will look for a move back down to 5985. A strong break and close below this level could see the ASX retest 5921, and if downside momentum is strong we could quickly see a further move all the way back down into 5875. EUROPE DAX – 12751 ( -180 or -1.39% ) The DAX was down for its second straight week, and this week should prove to be a key week for this market. VOLATILITY ALERTS: Wed 03:30 – German Buba President Weidmann Speaks For a continued move to the upside we must now see the DAX close above 12921 followed by a retest of 13050. Should this occur we will look for a strong move into 13205, and if momentum remains strong a push back higher into 13301. If the DAX fails to close above 12921, we may see a retest back down into the key level of 12714. A close below this level is likely to see a retest of 12600 and 12566; however if momentum is very strong to the downside we cannot rule out a strong move to 12384.
US SP500 – 2735 ( +14 or +0.51% ) The S&P enters its 5th week of a sideways consolidation following Friday’s strong posting. We will be discussing this market in the LIVE CHAT ROOM this week. VOLATILITY ALERTS: Wed 00:00 – ISM Non-Manufacturing PMI For a move higher we would like to see the S&P close and hold above 2736. Should this occur we will look for a retest of the key 2760 level. A strong break and close above this level could see another retest of 2785, and if momentum remains strong to the upside we cannot rule out a move to 2808. If we cannot hold above 2736, we could see this market continue to sell-off into 2704 before a pause. If momentum to the downside is strong we may see a move lower into 2680; and a close below this level may result in a move down to 2660 and 2638.
FOREX AUD/USD – 0.7567 ( +21 or +0.28% ) Like the S&P, the Aussie Dollar continues to its attempt to break higher however remains rangebound. This week is an important week for this market, and we will be discussing this in more detail in the LIVE CHAT ROOM . VOLATILITY ALERTS: Mon 11:30 – Retail Sales (monthly) Tue 14:30 – RBA Interest Rate Announcement Wed 11:30 – GDP (quarterly) Thu 11:30 – Trade Balance For a move higher we must now see this market hold above 0.7550 and 0.7561. A break above this level could see this market break higher and retest 0.7617; and if momentum is very strong we may see a quick move into 0.7662. If we cannot hold above 0.7550 and 0.7561, we will look for this market to retest 0.7489 and a break of this level yields a potential move into 0.7447 before another pause. A strong break and close below this level could then result in a sharp sell-off into 0.7364. EUR/USD – 1.1660 ( +10 or +0.09% ) A volatile week on the EURO saw a big reversal take place midd week. We will also be discussing the impact of this in more detail in the LIVE CHAT ROOM. VOLATILITY ALERTS: Wed 03:30 – German Buba President Weidmann Speaks For a sustained move higher we would like to see the EURO close above 1.1678, followed by a retest of 1.1738. Should this occur, we will then look for this market to retest 1.1834; and if momentum is very strong we cannot rule out a move to 1.1927. If however the EURO cannot hold above 1.1678, we may likely see a move lower into into the 1.1613. A strong break and close below this level however could see the EURO sell-off sharply down into 1.1496.
GBP/USD – 1.3349 ( +52 or +0.39% ) The Pound has found some support near our key level of 1.3277 and this week will again be key as to whether this holds or not. VOLATILITY ALERTS: Mon 18:30 – Construction PMI Tue 18:30 – Services PMI Thu 17:30 – Halifax HPI (monthly) For a continued move to the upside, we would like to see Cable hold above 1.3309. Should this occur we will look for the Pound to rally into 1.3534 before a pause; however a strong break of this level could see a retest of 1.3875. If we cannot hold above 1.3309, we will look for a quick move down into 1.3277. A break of this level however may result in a retest of 1.3035. A break below this level could see this market sell-off quickly into 1.2868, and should the downside momentum continue we cannot rule out a move to 1.2720. USD/JPY – 109.51 ( +10 or +0.09% ) The $/YEN reversed its prior week sell-off and is now on course for a retest of the big 110 figure. We will be discussing this in more detail in the MEMBER PORTAL . For a move to the upside we must now see this market hold above 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 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, and if the downside remains strong we could see a further sell-off into 107.36. A break below this level however could mean a very sharp move down to 106.52.
COMMODITIES GOLD – 1293 ( -8 or -0.61% ) GOLD continues to chop about and with some bearish behaviour this market will be one to watch this week. For a continued move higher we must now see this market close and hold above 1294. Should this occur we will look for a retest of 1303. A strong close above this level could see further upside into 1313; and if momentum remains very strong, we could see a big push into 1322 and 1333. If Gold cannot hold above 1294, we will look for a move back down into 1285. A strong break and close below this level however takes us down into the key 1276 – 1278 area which is very important and will be watched closely.
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