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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AUSTRALASIA ASX – 6699 ( -67 or -0.99% ) The ASX finished the week slightly lower but having found support mid week. We will be discussing this in the MEMBER PORTAL this week. VOLATILITY ALERTS: Mon 11:30 – Retail Sales (monthly) Tue 14:30 – RBA Rate Statement Thu 11:30 – Trade Balance Fri 11:30 – RBA Monetary Policy Statement
For a continued move higher we must now see the ASX hold above 6682. Should this occur, we will look for a test of 6804. If momentum to the upside continues we could see a retest of 6850, and if momentum is very strong we cannot rule out rule out a move to 7011. If the ASX cannot hold above 6682, we will look for a move back down to 6635. A strong break and close below this level however could see the ASX retest 6544 before a pause; and if downside momentum is very strong, we could see a move down to 6435.
EUROPE DAX – 12968 ( +74 or +0.57% ) The DAX also has marginally broken out of its consolidation and this week we will be watching this market for continuation or failure. VOLATILITY ALERTS: Tue 05:30 – ECB President Lagarde Speaks Thu 21:00 – EU Economic Forecasts
For a continued move to the upside we must now see the DAX close above 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 13050, we may see a retest back down into the key level of 12921.A close below this level is likely to see a retest of 12714; however if momentum is very strong to the downside we cannot rule out a move to 12566.
US SP500 – 3065 ( +44 or +1.46% )
The S&P is at all-time highs with no sign of slowing down just yet. We will be discussing this market in the LIVE CHAT ROOM this week.
VOLATILITY ALERTS: Wed 02:00 – ISM Non-Manufacturing PMI Sat 02:00 – Prelim UoM Consumer Sentiment
For a move higher we would like to see the S&P close above 3066. Should this occur, we will look for a move to 3100. A strong break above this level however sets the stage for a move higher into 3140. If we cannot hold above 3066, we could see this market retest 3020. A break of this level however may result in quick move down to 3003; and if momentum to the downside remains strong we may see a fast move down to 2985.
AUD/USD – 0.6913 ( +92 or +1.35% ) The Aussie Dollar also continues to rally and is now approaching the all important 70c level. VOLATILITY ALERTS: Mon 11:30 – Retail Sales (monthly) Tue 14:30 – RBA Rate Statement Thu 11:30 – Trade Balance Fri 11:30 – RBA Monetary Policy Statement
For a move higher, we would first like to see the AUD hold above 0.6873. Should this occur, we will look for a move into 0.6934, and if upside momentum remains very strong we cannot rule out a move to 0.7014 before a pause. If the AUD cannot hold above 0.6873, we will look for a move lower into 0.6825. A break and close below this level however could see a sharp decline into 0.6762.
EUR/USD – 1.1165 ( +85 or +0.77% ) This week new ECB President Christine Lagarde takes center stage as she introduces herself in her first speech as ECB President. VOLATILITY ALERTS: Tue 05:30 – ECB President Lagarde Speaks Thu 21:00 – EU Economic Forecasts
For a move higher this week, we would like to see the EURO close above 1.1197. Should this occur, we could then see a move to 1.1249 before a pause. If momentum to the upside is very strong, we could see a move into 1.1297. If the EURO cannot close above 1.1197, we could see a move down into 1.1117 before a pause. If this market continues to sell-off, we could see a further move down into 1.1033; however any break of this level may result in a sharp move down to 1.0977.
GBP/USD – 1.2938 ( +109 or +0.85% ) An extension to BREXIT has been granted and as we spoke about last week, this market is now consolidating. VOLATILITY ALERTS: Tue 20:30 – Services PMI Thu 23:00 – BoE Interest Rate Announcement Thu 23:30 – BoE Governor Carney Speaks
For a continued move to the upside, we would like to see Cable hold above 1.2868, followed by a retest of 1.3035 and 1.3161 before a pause. Should this occur, we will look for a move to 1.3191 and 1.3277; and if momentum is very strong, we could see a re-test of last week’s highs into 1.3386. On the downside, should we fail to hold above 1.2868, we will be watching the key 1.2720 level very closely. A strong break below this level however sets this market up for a bigger move down into 1.2622; and if downside momentum remains strong we could see a quick drop into 1.2480. USD/JPY – 108.17 ( -49 or -0.45% ) The $/YEN sold off aggressively following last week’s BoJ Monetary Policy Statement. We will be discussing the ongoing impact of this in the LIVE CHAT ROOM this week.
Note: Monday is a bank holiday in Japan (Culture Day)
For a move to the upside we must now see this market close above 108.31, on its way to retesting 109.21 before a pause. A strong break and close above this level could then see the $/YEN rally into 109.94, and if momentum is very strong we could see moves to 110.31 and 110.78.
If we cannot close 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.
GOLD – 1513 ( +9 or +0.6% )
Gold is attempting to break to the upside having closed near its highs of last week.
For a continued move higher we must now see this market hold above 1505. Should this occur, we will look for a move to 1526; and if momentum remains very strong, a strong break above this level could see Gold rally quickly into 1540 and 1552.
If Gold cannot hold above 1505, we will look for a move back down into 1480. A strong break and close below this level could send this market lower into 1470, and if momentum is strong to the downside we cannot rule out a move lower into 1450.
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