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 – 6065 ( +243 or +4.17% ) The ASX managed to rally higher last week following another good outing. VOLATILITY ALERTS: Tue 14:30 – RBA Interest Rate Announcement For a continued move higher we must now see the ASX close above 6070 followed by a push into 6140. Should this occur we will look for a move into 6206, and if momentum to the upside remains strong we cannot rule out a move to 6276. If the ASX cannot hold above 6070, we will look for a move back down to 5921 before a pause. A strong break and close below this level however could see the ASX retest 5823, and if downside momentum is very strong we could see a move down to 5746.
EUROPE DAX – 12576 ( +515 or +4.27% ) The DAX was also higher last week following a small and relatively subdued break to the upside. Can this market get going this week? VOLATILITY ALERTS: Wed TBC – EU Economic Forecasts Thu All day – EuroGroup Meetings For a continued move to the upside we must now see the DAX close above 12714. Should this occur, we will look for a strong move into 13050, and if momentum remains strong a push back higher into 13205. If the DAX fails to close above 12714, we may see a retest back down into the key level of 12566. A close below this level is likely to see a retest of 12366; however if momentum is very strong to the downside we cannot rule out a move to 12166.
US SP500 – 3124 ( +110 or +3.65% ) The S&P managed to bottom out and is now in rally mode. We will be discussing this in the MEMBER PORTAL 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 3166. Should this occur, we will look for a move higher into 3208. A strong break above this level however sets the stage for a move higher into 3248; and if momentum is very strong we cannot rule out a move to 3274. If we cannot close above 3166, we could see this market move lower into 3106. A break of this level however may result in a quick move down to 2998; and if momentum to the downside remains strong we may see a fast move down to 2974.
FOREX AUD/USD – 0. 6935 ( +73 or +1.06% ) The Aussie Dollar continues to consolidate in a tight range and is again ready for a breakout. We will be discussing this market again in the LIVE CHAT ROOM this week. VOLATILITY ALERTS: Tue 14:30 – RBA Interest Rate Announcement For a move higher, we would first like to see the AUD close above 0.7014. Should this occur we will look for a move into 0.7113, and if upside momentum remains very strong we cannot rule out a move to 0.7197 – 0.7236 before a pause. If the AUD cannot close above 0.7014, we will look for the AUD to 0.6934. A break and close below this level however could see a sharp decline into 0.6830; and if momentum to the downside remains strong we cannot rule out a move into 0.6750.
EUR/USD – 1.1219 ( +1 or +0.01% ) The EURO has remained virtually flat last week and so our levels remain unchanged. VOLATILITY ALERTS: Wed TBC – EU Economic Forecasts Thu All day – EuroGroup Meetings For a move higher we would like to see the EURO close above 1.1249 early in the week. Should this occur we could see a strong move into 1.1335 and any breaks above this level may mean a quick move into 1.1453 before a pause. If the EURO cannot close above 1.1249, we could see a fast move down into 1.1117 before a pause. A strong break of this level may result in a move into 1.1033, however any weakness below this level could see a sharp drop into 1.0977 before the week’s end.
GBP/USD – 1.2483 ( +147 or +1.19% ) After a strong start to the week Cable managed to retrace its early gains; and as such our levels remain unchanged. For a continued move to the upside, we would like to see Cable hold above 1.2297, followed by a retest of 1.2480 before a pause. Should this occur we will look for a move to 1.2622; and if momentum is very strong we could see a re-test of 1.2720. Should we fail to hold above 1.2297, we will be watching the key level at 1.2080 very closely. Any weakness below this level however sets this market up for a move down into 1.2000. If momentum is very strong to the downside we cannot rule out a move to 1.1896.
USD/JPY – 107.49 ( +30 or +0.28% ) The $/YEN is also holding firm support but can this market continue to hold? For a move to the upside we must now see this market close above 108.31. Should this occur we will look for a retest of 109.21, and if momentum is very strong we could see a move higher into 109.94 and potentially 111.73. If we cannot close above 108.31, we could see a move lower into 106.52. A break below this level may result in a sharp move lower into 105.50; and any further breaks to the downside may see a bigger move into 104.97.
COMMODITIES GOLD – 1773 ( +3 or +0.17% ) Gold is consolidating last week’s break and we are watching this market closely here; having reached an important level at 1786. For a continued move higher we must now see this market hold above 1755. Should this occur we would then need to see a strong break of 1786. Should this occur we could see a stronger move to 1830. If Gold cannot hold above 1755, we will look for a move back down to 1724. A break below this level could see a move lower into 1702; and if momentum is very strong to the downside we could see a move to 1684.
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