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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5643 ( -54 or -0.95% )
The ASX continues its short-term uncertainty and we are again watching this market closely for the next leg up or down. We will be discussing this market in our MEMBER PORTAL this week.
VOLATILITY ALERT: Retail Sales on Monday, RBA Interest Rate on Tuesday, NAB Quarterly Business Confidence on Thursday.
For a continued move higher we would like to see the ASX break and close above 5705, followed by a break above 5746. A strong break through this level could see the ASX move into 5777, and should we close strongly above this 5777 we will look for a move to 5823. If momentum remains strong our upside target of 5875 cannot be ruled out.
If we cannot break and close above 5705, we may see a continued move down to 5589. Should the ASX fail to hold this level we could see further pressure to the downside with a move to 5521 and 5504 respectively.
EUROPE
DAX – 11656 ( -147 or -1.25% )
The DAX continues to consolidate the Christmas rally at one of our key levels.
VOLATILITY ALERT: Monthly Factory Orders on Monday.
For a continued move to the upside we must see the DAX close strongly above the 11755 – 11790 area. Should this occur, we will look for a retest 11875. If momentum is very strong, a break and close above this level could see another push higher into 12054.
If the DAX fails to close above 11755, we will look for a move back down to 11592; and if there is a complete reversal of the breakout, a strong move down to 11340 cannot be ruled out.
US
SP500 – 2294 ( +1 or +0.04% )
The S&P spent the majority of last week in a very tight range, before a stronger than expected NFP number on Friday saw this market rally into the close. Will we see all-time highs this week? We will be discussing this in the LIVE CHAT ROOM this week.
VOLATILITY ALERT: Trade Balance on Tuesday, Uom Consumer Sentiment on Friday.
For a move higher we would like to see a the S&P hold above 2292. Should this occur we will be looking for a retest of 2304. A break above this level could see a move to 2312, and if momentum is strong a move to 2334 cannot be ruled out.
If we cannot hold above 2292, we may likely see a move down to 2270. A break and close below this level could see the S&P move lower into 2256, and if the selling is very strong we may potentially see a move back down into 2234.
FOREX
AUD/USD – 0.7680 ( +135 or +1.79% )
After a pause, the Aussie Dollar continues its move higher, having closed right at our 0.7677 level on Friday. Is this rally part of a bigger move back up to 80c??? This week is a very important week for the $AUD and we will be tracking this market in our LIVE CHAT ROOM all week.
VOLATILITY ALERT: Retail Sales on Monday, RBA Interest Rate on Tuesday, NAB Quarterly Business Confidence and RBA Governor Lowe speaks on Thursday, RBA Monetary Policy Statement on Friday.
For a move higher we would like to see this market break strongly through 0.7677. Should this occur we will look for a move to 0.7729 before a pause. However- if we break above this level we could see very fast moves into 0.7765 and 0.7833.
On the downside, a failure to close above 0.7677 could see a move back down to 0.7617. A strong break and close of this level may result in another leg down to 0.7561, and if momentum is very strong we cannot rule out a sell-off into 0.7489 and 0.7447.
EUR/USD – 1.0785 ( +91 or +0.85% )
The EURO continued to gain strength against a weaker $US dollar, however is now approaching key resistance areas.
VOLATILITY ALERT: EU Economic Forecasts due on Wednesday.
For a sustained move higher we would like to see this market hold above 1.0738. Should this occur we will look for a retest of 1.0814. A strong break and closer above this level could then see a fast leg up to 1.0902.
If we cannot hold above 1.0738, we could see continued chop back and forth around the 1.0631 level. However should we close strongly below this level, our next level down is 1.0525. A strong break below 1.0525 could see the EURO sell-off quickly to 1.0462.
GBP/USD – 1.2479 ( -68 or -0.54% )
Cable was quiet last week as talk of Brexit has taken a back seat. This may be the case over the next fortnight (or longer)- but be prepared because Brexit news will return front and center.
VOLATILITY ALERT: Monthly Manufacturing Production and Goods Trade Balance on Friday.
For a move to the upside we would like to this market close above 1.2480. A strong break and close above this level should see a retest of 1.2622, and if momentum remains strong a move to 1.2720 is still very possible.
On the downside our levels have not changed. We continue to watch two key areas at 1.2404, 1.2297 and 1.2100. As previous- the downside may be swift and sharp.
USD/JPY – 112.57 ( -251 or -2.18% )
The initial move higher we we spoke of last week was quickly faded as the FED was not as hawkish as the market anticipated. We will be discussing this market in more detail in the LIVE CHAT ROOM this week.
For a continued move to the upside we must now see this market break and close strongly above this market hold above 113.04. Should this occur, we will look for a move to 113.87 – 114.08. A close above 114.08 could see this market retest 114.52; and if we see a reversal to the upside this week, we cannot rule out a move to 115.54.
If we cannot hold above 113.04, we will look for continued downside with into 111.73. A break below this level may result in another leg down to 111.09, and if momentum is strong a sharp sell-off to 109.94 is possible.
COMMODITIES
GOLD – 1220 ( +29 or +2.43% )
GOLD has broken our key level at 1218. Is this the last we have seen of this level?
For a continued move higher we want to see this market hold above 1218, followed by a strong break and close above 1222. Should this occur we will look for a move to 1233, and if momentum to the upside is strong we could see a sharp move into 1247.
If Gold cannot hold above 1218, we will look for a move back down to 1206. A break and close below this level we could see Gold trade back down to 1187-1181 quickly, and if momentum remains strong to the downside we cannot rule out moves to 1170 by week’s end.
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