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 – 5788 ( +34 or +0.59% ) The ASX has begun its rally and we will look for this market to potentially continue higher this week. We will be discussing this market in more detail in the MEMBER PORTAL. VOLATILITY ALERT: RBA Interest Rate on Tuesday, Quarterly GDP on Wednesday, Trade Balance on Thursday. For a continued move higher we would like to see the ASX hold above 5777. Should this occur we will look for a retest of 5823, and if momentum is very strong this week we will could see a strong rally into 5875 and 5920. If the ASX cannot hold above 5777, 5746 is the next level down. A break below this could see 5705, and if the selling continues we will look for a quick move into 5690. Should this market completely reverse to the downside a move to 5606 cannot be ruled out.
EUROPE DAX – 12843 ( +245 or +1.94% ) The DAX posted new all-time highs (briefly) before retracing back to close inside the range of last month. This market is also set to rally higher soon. NOTE: Monday is a public Holiday in Germany (Whit Monday) VOLATILITY ALERT: ECB Interest Rate Announcement on Thursday followed by press conference. We will be covering the ECB Interest Rate Announcement live during Live TV. For a continued move to the upside we must see the DAX hold above 12714. Should this occur we could see a strong move 13110, and if momentum is very strong to the upside we cannot rule out a move to 13205. If the DAX fails to hold above 12714, we will look for a move back down to 12536. A strong break below this level is likely to see a push further down into 12384.
US SP500 – 2437 ( +23 or +0.95% ) “Up, up and away for the S&P”. We have been saying this for a while and now that we have broken the key 2418 level we are seeing plenty of support beneath it. We will be covering this market in more detail in the LIVE CHAT ROOM this week. VOLATILITY ALERT: ISM Non-Manufacturing PMI on Monday. For a move higher we would like to see the S&P hold strongly above our key level at 2418 Should this occur we anticipate further upside over the following week. Our next upside targets are 2465 and 2477. If we cannot hold above 2418, we will look for a move to retest strong support at 2400. A strong break below this level could see the S&P spike to 2392, and a close below this level could see this market trade 2386 by week’s end. FOREX AUD/USD – 0.7441 ( -4 or -0.05% ) Another sideways week for the Aussie dollar means our levels remain unchanged. However this week we have some very important economic data and we will be watching this market carefully and discussing in the MEMBER PORTAL . VOLATILITY ALERT: RBA Interest Rate on Tuesday, Quarterly GDP on Wednesday, Trade Balance on Thursday. For a move higher we would like to see the AUD close above 0.7447, followed by a break and close above 0.7489. A strong break and close above this level could see a quick move to 0.7561 before a pause; and if momentum remains strong we will look for a move into 0.7617. If we cannot close above 0.7447, we will look for a move back down to 0.7364. A strong break below this level may result in a move back down into 0.7282 before another potential pause. Any subsequent breaks of this level however may result in a very fast move down to 0.7229.
EUR/USD – 1.1279 ( +102 or +0.91% ) The EURO continues to rally on the back of a weakening $US dollar, having reached our key level at 1.1248. As we head into Thursday’s important interest rate announcement, will Draghi surprise markets this week? NOTE: Monday is a public Holiday in Germany and France (Whit Monday) VOLATILITY ALERT: ECB Interest Rate Announcement on Thursday followed by press conference. We will be covering the ECB Interest Rate Announcement live during Live TV. For a sustained move higher we would now like to see the EURO hold above 1.1248. If this market holds above this level we could see a quick move into 1.1347. Should momentum remain strong to the upside, we could see this market rally to 1.1453. If the EURO cannot hold above 1.1201, we will watch for a move back down to 1.1117. A break below this level could see this market trade quickly down 1.1083 cannot be ruled out; and if momentum remains very strong we could see a sharp move down to 1.1033 and 1.0977.
GBP/USD – 1.2889 ( +86 or +0.67% ) For two weeks now we have spoken about the Pound being at a critical area and we can see on the charts how this market has again failed to break through our important 1.3035 level. With the UK General Election on Thursday all eyes will be on the GBP and we will be providing special coverage of this on Thursday and Friday. VOLATILITY ALERT: Services PMI on Monday, UK General Election on Thursday, Manufacturing Production on Friday. For a move to the upside we would like to this market hold above 1.2720. Should this occur we will look for a retest 1.3035. A break of this level is likely to test 1.3085, and if momentum is very strong we cannot rule out a move to 1.3277. If the GBP cannot hold above 1.2720, we will look for a move back down to 1.2571. A close below this level could result in a strong move back down to 1.2480 and thus a full fade of the snap election rally.
USD/JPY – 110.42 ( -90 or -0.81% ) The YEN continues to strengthen against the $US and the question now is- how long will this continue..? VOLATILITY ALERT: Quarterly GDP on Thursday. For a continued move to the upside we must now see this market break and close 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 break back 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 – 1278 ( +12 or +0.95% ) GOLD has now rallied into our key area at 1276-1278. For a continued move higher we would like to see this market hold above 1278, followed by a retest of 1294. A strong break above 1294 could see this market head back up to 1303, and if momentum remains strong we could see a move into 1313 before another pause. If Gold cannot hold above 1278, we will look for a strong move back down into 1263 and 1257. A break and close below this level could then result in a move to 1247 before the week’s end.
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