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 – 6256 ( -24 or -0.38% ) The ASX continues to trade between a tight and narrow sideways range and this week the question will be can this market move higher? We will be discussing this in more detail in the LIVE CHAT ROOM . VOLATILITY ALERTS: Tue 14:30 – RBA Rate Statement Fri 11:30 – RBA Monetary Policy Statement For a continued move higher we must now see the ASX close above 6276. Should this occur we will look for a move into 6345, and if momentum to the upside is very strong we cannot rule out a move to 6440. If the ASX cannot close above 6276, we will look for a move back down to 6206 before a pause. A strong break and close below this level however could see the ASX retest 6140, and if downside momentum is very strong we could see a move down to 6070.
EUROPE DAX – 12640 ( -182 or -1.42% ) The DAX was showing topping signs early last week and followed through on these warnings; however once again has found support at the key 12566 level. For a continued move to the upside we must now see the DAX hold above 12640 but more importantly 12566. Should this occur we will look for a retest of 12714. A break of this level may then result in a retest of 12830, and if momentum to the upside is very strong we cannot rule out a move into 12921. If the DAX fails to close and hold above 12566, we could see a quick move down to 12384 before a pause. A break below this level however means we may see more selling into 12198 and 12115; and if momentum is very strong to the downside we cannot rule out a sharp move into 12044. US SP500 – 2841 ( +25 or +0.89% ) The S&P continues to grind higher having just closed above the important 2840 level. Can this market test all-time highs this week? We will be discussing this in more detail in the LIVE CHAT ROOM . VOLATILITY ALERTS: Thu 22:30 – PPI (monthly) Fri 22:30 – CPI (monthly) For a move higher we would like to see the S&P hold above 2840. Should this occur the stage is set for a retest of 2870 and any break above this level could see new all-time highs into 2902. If we cannot hold above 2840, we will look for a move back down to 2808. A break below this level may result in another quick move down into 2794 and 2785; and if momentum to the downside is very strong we cannot rule out a move into 2760.
FOREX AUD/USD – 0.7396 ( -5 or -0.07% ) The Aussie Dollar continues within its sideways range and as we mentioned last week we are fast approaching a decision point for this market. VOLATILITY ALERTS: Tue 14:30 – RBA Rate Statement Fri 11:30 – RBA Monetary Policy Statement 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 – 1.1566 ( -91 or -0.78% ) The Euro continues to see selling pressure having closed lower 4 out of 5 sessions last week. Will this market finally break out this week? We will be discussing the implications of such a move in the the MEMBER PORTAL . For a sustained move higher we would like to see the EURO close and hold above 1.1613 this week. Should this occur we could see a strong move into 1.1738 before another pause. A strong break above 1.1738 could result in a fast move to 1.1822. If the EURO cannot close above 1.1613, we could see a fast move down into 1.1496. A break below this could be followed by another quick move into 1.1453; and should momentum remain strong we cannot rule out a move to 1.1347. GBP/USD – 1.3002 ( -99 or -0.76% ) Last week’s interest rate hike by the BoE came as no surprise and the resultant move forced the Pound to sell-off lower into weekly lows. This week is yet another important week for this market. VOLATILITY ALERTS: Tue 17:30 – Halifax HPI (monthly) Fri 18:30 – GDP (monthly) Fri 18:30 – Goods Trade Balance For a continued move to the upside, we would like to see Cable close above 1.3035 followed by a retest of 1.3111. Should this occur we will look for the Pound to rally into 1.3309 before a pause; however a strong break of this level could see a retest of 1.3534. If we cannot close above 1.3111, we could see the Pound breakdown quickly into 1.2868. Should the downside momentum continue, a move into 1.2720 is very possible; and should there be any break below this level WATCH OUT!
USD/JPY – 111.27 ( +28 or +0.25% ) They $/YEN is trying to settle here following some very accommodative rhetoric from the BoJ last Tuesday. VOLATILITY ALERTS: Fri 09:50 – Prelim GDP (quarterly) For a move to the upside we must now see this market close above 111.73. Should this occur we will look for a test of 112.68 before another pause. However a strong break and close above this level could see the YEN rally strongly into 113.87. If we cannot close above 111.73, we are likely to see a retest of 110.45. A break of this level however may result in a sharp move down into 109.94; and if momentum to the downside is very strong we cannot rule out a move to 109.21
COMMODITIES GOLD – 1213 ( -9 or -0.74% ) GOLD continues its quest to find buyers and form a base. Is this the week this market attempts a move higher? We will be discussing this in more detail in the LIVE CHAT ROOM this week. For a move higher we would like to see this market close above 1216 and 1222. Should this occur we will look for a retest of 1238. A close above this level may likely see a further move to the upside into 1247 before a pause. Should momentum remain very strong, we could see a fast move into 1260. If Gold cannot close above 1222, we could see another sharp decline into 1206. Any subsequent breaks of this level may result in further downside into 1194, and if momentum to the downside remains very strong we cannot rule out a move into 1187.
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