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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.
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INDICES
AUSTRALASIA
ASX – 5394 ( -114 or -2.07% )
The ASX was much weaker last week compared to other global indices, and we expect a possible rebound this week.
We will be discussing this market in more detail in the LIVE CHAT ROOM.
VOLATILITY ALERT: RBA Interest Rate announcement on Tuesday, Quarterly GDP on Wednesday.
For a continued move to the upside we would like to see this market break and close strongly above 5437. If this were to happen, we could see a move into 5504 and 5521. A strong break above these levels could see a move to retest the all important 5550 level, and if momentum remains very strong we could see the ASX rally to 5664 by the end of the week.
If we fail to close above 5437, we will look for a move back down to 5373. A break below this could result in a move back into 5294, and further breaks to the downside could see the ASX head to 5238. If we see a complete reversal to the downside, we will watch 5161 as a potential area of support.
EUROPE
DAX – 10706 ( +205 or +1.95% )
The DAX is again beginning to pop its head higher and we are seeing volatility return to this market.
VOLATILITY ALERT: ECB Interest Rate Announcement on Thursday, Eurogroup Meetings on Friday.
We will be covering the ECB Interest Rate Announcement live during LIVE TV on Thursday.
For a continued move to the upside we would like to see the DAX hold above above 10585 – 10601, followed by a break above 10749. Should this occur, we may see another push higher into 10863. Further breaks of this level could see the DAX rally 10983 and 11060 before a pause.
If we fail to hold above 10601, we will look for a move back down to 10475 and should there be further downside, we could see a move lower to 10382. Should momentum remain very strong, we will look for a move down to 10158.
US
SP500 – 2179 ( +9 or +0.41% )
The S&P continues to find support at our key levels and is showing bullish signs; but we are always prepared for the unexpected! Last Friday’s NFP number was similar to expectations and our Live TV coverage proved to be very accurate.
We will be discussing this market again in more depth in the MEMBER PORTAL this week.
VOLATILITY ALERT: ISM Non-Manufacturing PMI on Tuesday.
NOTE: Monday is a public holiday in the US due to Labour Day.
For a move higher we must now see the S&P hold above 2176. Should this occur we will look for a move back up into 2194. A strong break and close above 2194 is likely to see the S&P set its sights for 2200. If we can hold above 2200 this week, we will ultimately then look for a move to 2212.
If we cannot hold above 2176, we will watch for this market to hold 2150. A break below 2150 may see this market retest the previous all-time highs at 2137. A strong break through 2137 could result in a fast move back down to 2126.
FOREX
AUD/USD – 0.7570 ( +10 or +0.13% )
This week all eyes are on the RBA as the market asks- will there be another rate cut here in Australia…?
VOLATILITY ALERT: RBA Interest Rate announcement on Tuesday, Quarterly GDP on Wednesday.
For a move higher we would like to see the AUD hold above 0.7561, followed by a break and close above 0.7617. A strong break and close above this level could then see a quick move to 0.7662 before a pause; and if momentum remains strong we will look for strong move into 0.7729.
If we cannot hold above 0.7561, we will look for a move back down to 0.7447. A strong break below this level may result in a move back down into 0.7364 before another potential pause. Any subsequent breaks of this level however may result in a very fast move down to 0.7282.
EUR/USD – 1.1154 ( -38 or -0.34% )
The Euro is now becoming very interesting, and Friday was a great example of that with a big reversal following NFP.
This week should provide more volatility with the ECB and Draghi set to announce their Interest Rate Announcement on Thursday.
VOLATILITY ALERT: ECB Interest Rate Announcement on Thursday, Eurogroup Meetings on Friday.
We will be covering the ECB Interest Rate Announcement live during LIVE TV on Thursday.
For a sustained move higher we would like to see the EURO break above 1.1201. A break above 1.1201 may result in a retest of 1.1248, and if we continue to break higher we could see a quick move into 1.1347. Should momentum remain strong to the upside, we cannot rule out a move back up to 1.1380 this week.
If the EURO cannot close 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 to 1.1083. Should we see further breaks to the downside, a move to 1.1033 cannot be ruled out; and if momentum remains very strong we could see a sharp move down to 1.0977.
GBP/USD – 1.3280 ( +154 or +1.17% )
The GBP has been crawling higher over the past 3 weeks and is now testing the upper levels of this post-Brexit sideways range. When this market breaks out of this range watch out!
VOLATILITY ALERT: Services PMI on Monday, Manufacturing Production and Inflation Report Hearings on Wednesday, Trade Balance on Friday.
For a move to the upside we would like to see this market hold above 1.3227. Should this occur we could see the GBP/USD test 1.3426 very quickly. If momentum remains very strong, a move to 1.3644 cannot be ruled out.
If we cannot hold above 1.3227, we will look for a move back down to 1.3035. A break below this level could see a retest of 1.2928 before a pause. Should we see a break below 1.2928, watch out for a potential sharp move down to 1.2720.
USD/JPY – 103.94 ( +216 or +2.12% )
The YEN has rallied 450+ points off the August lows to no surprise. We have spoken about this in our MEMBER PORTAL for many weeks. Now the question is- will we see a move higher into 106?
VOLATILITY ALERT: Kuroda speaks on Monday, GDP and Trade Balance on Thursday.
For a continued move to the upside we would like to see this market hold above 103.99, followed by a break and close above 104.97. Should this occur we will look for a move to 105.79 and 106.30. A strong break above 106.30 could see a move to 107.75, and if momentum remains strong we could see a quick move back up to 108.31.
If however the USD/JPY cannot hold above 103.99, we will look for a move down to 103.21. A break below this level could see the USD/JPY trade quickly down to 102.29 before a potential pause. Should we continue to trade lower and see continued downside pressure on the USD/JPY- a sharp move to 101.22 is possible.
COMMODITIES
GOLD – 1324 ( +3 or +0.23% )
Gold recovered all of its losses last week following Friday’s NFP announcement, finishing the week only slightly higher. As such our levels remain unchanged.
For a continued move higher we would like to see GOLD break back above 1322 and more importantly 1333. If we can hold these levels we will look for a move back up to 1355. A break above 1355 could see GOLD retest the important 1375 level before another pause. This is a key area and should we see a strong close above 1375, we will look for a move to 1400.
If Gold cannot break above 1333, we will look for a move back down to 1303. A strong break and close below this level may result in a retest of 1294, and further breaks to the downside could see Gold trade retest the important 1276 level. If downside momentum continues to persist, a strong break through 1276 could see a 1257 by the end of the week.
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