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 – 6093 ( +375 or +6.56% )
The ASX continues to rally higher as it attempts its recovery now that a ‘recession’ is all but certain.
VOLATILITY ALERTS: Tue 11:30 – NAB Business Confidence
For a continued move higher we must now see the ASX hold 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.
DAX – 12773 ( +1098 or +9.4% )
The DAX is also showing very strong performance having all but posted a +10% week last week! We will be discussing this in the MEMBER PORTAL this week.
VOLATILITY ALERTS: Mon 16:00 – German Industrial Production (monthly) Mon 23:45 – ECB President Lagarde Speaks Thu TBC – Eurogroup Meetings
For a continued move to the upside we must now see the DAX close above 13050. Should this occur, we will look for a strong move into 13205, and if momentum remains strong a push back higher into 13301.
If the DAX fails to close above 13050, we may see a retest back down into the key level of 12714. A close below this level is likely to see a retest of 12566; however if momentum is very strong to the downside we cannot rule out a move to 12366.
SP500 – 3187 ( +128 or +4.18% )
The S&P is now at a critical area here at 3200. Can this market break higher?
VOLATILITY ALERTS: Wed 22:30 – CPI (monthly) Thu 04:00 – FOMC Interest Rate Announcement Thu 04:30 – FOMC Press Conference Thu 22:30 – PPI (monthly) Sat 00:00 – Prelim UoM Consumer Sentiment
For a move higher we would like to see the S&P close above 3208. Should this occur, we will look for a move higher into 3248. A strong break above this level however sets the stage for a move higher into 3274; and if momentum is very strong we cannot rule out a move to 3300. If we cannot close above 3208, we could see this market move lower into 3166. A break of this level however may result in a quick move down to 3106; and if momentum to the downside remains strong we may see a fast move down to 2998.
AUD/USD – 0. 6967 ( +301 or +4.52% )
The Aussie Dollar also continues its stellar recovery having now pushed right up against the 70c handle.
VOLATILITY ALERTS: Tue 11:30 – NAB Business Confidence
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 a move lower into 6958. A break and close below this level however could see a sharp decline into 0.6934; and if momentum to the downside remains strong we cannot rule out a move into 0.6830.
EUR/USD – 1.1290( +190 or +1.71% )
The EURO is also at critical resistance now and all eyes are on this market should it continue to rally and break higher.
VOLATILITY ALERTS: Mon 23:45 – ECB President Lagarde Speaks Thu TBC – Eurogroup Meetings
For a move higher we would like to see the EURO close above 1.1335 early in the week. Should this occur we could see a strong move into 1.1453 and any breaks above this level may mean a quick move into 1.1496 before a pause. A strong close above this level however could see the EURO rally strong into 1.1613 by the week’s end. If the EURO cannot close above 1.1335, we could see a fast move down into 1.1249 before a pause. A strong break of this level may result in a move into 1.1201, however any weakness below this level could see a sharp drop into 1.1117 before the week’s end.
GBP/USD – 1.2667 ( +321 or +2.6% )
Cable outperformed the Euro last week for the first week in many and is also pushing up against important resistance. We will be discussing this market again in the LIVE CHAT ROOM this week.
VOLATILITY ALERTS: Fri 16:00 – GDP (monthly)
For a continued move to the upside, we would like to see Cable close above 1.2720, followed by a retest of 1.2868 before a pause. Should this occur we will look for a move to 1.3035 and 1.3161; and if momentum is very strong we could see a re-test of 1.3191. On the downside, should we fail to close above 1.2720, we will be watching the key level at 1.2622 very closely. A strong break below this level however sets this market up for a bigger move down into 1.2480.
USD/JPY – 109.58 ( +181 or +1.68% )
The $/YEN is also rallying and our long-term level at 109.94 is the one we are watching this week closely.
For a move to the upside we must now see this market close above 109.94. Should this occur we will look for a move into 110.31, and if momentum is very strong we could see moves to 110.78 and 111.09.
If we cannot close above 109.94, we could see a move lower into 109.21. A break below this level may result in a retest of 108.31; and any further breaks to the downside may see a bigger move and full fade into 107.75 before a pause.
GOLD – 1684 ( -45 or -2.6% )
Gold has broken down through its 1700 support area and the question now is- can it regain this level?
For a continued move higher we must now see this market hold above 1674. Should this occur we could see a strong move to 1687; and any break of this level could see a stronger move to 1724 and 1755.
If Gold cannot hold above 1674, we will look for a move back down to 1648. A break below this level could see a move lower into 1605; and if momentum is very strong to the downside we could see a move to 1574.
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