This market brief is an overview of the week ahead and some of the events we see as being important to the markets.
Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.
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Trade View has entered the weekend NET LONG
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INDICES
AUSTRALASIA
ASX – 6776 (-43 or -0.63%)
The ASX was slightly weaker last week and faces some resistance heading into this week. We will be discussing this in the MEMBER PORTAL.
VOLATILITY ALERTS:
Tue 14:30 – RBA Interest Rate Announcement
Fri 09:30 – RBA Governor Lowe speaks
Fri 11:30 – RBA Monetary Policy Statement
For a continued move higher we must now see the ASX close above 6804. Should this occur, we will look for a test of 6850. A strong break of this level however is likely to see the ASX rally to new all-time highs into 6905, and if momentum is very strong we cannot rule out a move to 7011.
If the ASX cannot close above 6804, we will look for a move back down to 6720. A strong break and close below this level however could see the ASX move lower into 6650 before a pause; and if downside momentum is very strong, we could see a move down to 6544.
EUROPE
DAX – 11909 (-521 or -4.19%)
Last week saw DAX sellers re-emerge with the benchmark index down over 4%. Is this a sign of things to come…?
For a continued move to the upside we must see the DAX close above 12198. Should this occur, we will look for a move into 12384 before a pause. If momentum is very strong we cannot rule out a blow off move to 12566 and 12750.
If the DAX fails to close above 12198, we will look for a move back down to 11875. Any break below this level however could see the DAX sell-off sharply into 11755 this week; and if downside momentum is very strong we cannot rule out a move down to 11519.
US
SP500 – 2934 (-87 or -2.88%)
The US also sold off after a week filled with interesting rhetoric on many fronts. We will be discussing this market in the LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Tue 00:00 – ISM Non-Manufacturing PMI
Fri 22:30 – PPI (monthly)
For a move higher we would like to see the S&P close above 2960. Should this occur, we will look for a move to 2985. A strong break above this level however sets the stage for a move higher into 3003.
If we cannot close above 2960, we could see this market retest 2922. If momentum to the downside remains strong we may see sharp moves down into 2902 and 2870, and if the sellers continue their aggressive stance 2812 cannot be ruled out this week.
FOREX
AUD/USD – 0.6797 (-113 or -1.64%)
The Aussie Dollar continues to under perform and is once again under pressure this week. We will be discussing the significance of this exclusively in the LIVE CHAT ROOM.
VOLATILITY ALERTS:
Tue 14:30 – RBA Interest Rate Announcement
Fri 09:30 – RBA Governor Lowe speaks
Fri 11:30 – RBA Monetary Policy Statement
For a move higher, we would first like to see the AUD hold above 0.6762. Should this occur we will look for a retest of of 0.6875, and if upside momentum remains very strong we may see a push higher into 0.6934 before a pause.
If the AUD cannot hold above 0.6762, we will look for a move lower into 0.6706. A break and close below this level sets the stage for a larger move down to 0.6598.
EUR/USD – 1.1105 (-23 or -0.21%)
With the Euro also finding support, this market must now rally otherwise it may find itself in the crosshairs of heavy selling.
For a move higher we would like to see the EURO close above 1.1197 early in the week. Should this occur we could see a retest into 1.1249 and any breaks above this level may mean a quick move into 1.1335 before a further pause.
If the EURO cannot close above 1.1197, we could see a bigger push down into 1.1033 before a pause. A strong break of this level may however result in a fast move down into 1.0977 before the week’s end.
GBP/USD – 1.2159 (-224 or -1.81%)
Cable also continues to slide and is getting closer to that sub 1.2000 area we have discussed for so long.
VOLATILITY ALERTS:
Mon 18:30 – Services PMI
Fri 18:30 – GDP (monthly), Manufacturing Production (monthly), Prelim GDP (quarterly)
For a continued move to the upside, we would like to see Cable close above 1.2195. Should this occur we will love for a move back up into 1.2297, and if momentum is very strong we cannot rule out a strong push into 1.2480.
On the downside, if the Pound cannot close above 1.2195, we may see a quick retest of 1.2100. A break below this level could see a fast move down to 1.2000, and below this we have a key level at 1.1896.
USD/JPY – 106.63 (-204 or -1.88%)
The $/YEN was also down this week having broken out of its sideways range with two strong back-to-back down days.
For a move to the upside we must now see this market hold above 106.52, on its way to retesting 107.25 before a pause. A strong break and close above this level could then see the $/YEN rally into 107.75, and if momentum is very strong we could see moves to 108.31 and 108.70.
If we cannot hold above 106.52, we could see a fast move lower into 105.50. A break below this level may result in a retest of 104.97 and this is where things get very interesting. A break below this level could mean a very sharp move down to 103.39.
COMMODITIES
GOLD – 1440 (+22 or +1.55%)
Gold remains in a sustained sideways range and as such our levels remain unchanged.
For a continued move higher we must now see this market hold above 1416 and 1433. Should this occur, we will look for a retest of 1450; and if momentum remains very strong, a strong break above this level could see Gold rally quickly into 1470 and 1480.
If Gold cannot hold above 1433, we will look for a move back down into 1416. A strong break and close below this level could send this market lower into 1402, and if momentum is strong to the downside we cannot rule out a move lower into 1393.
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