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 – 6150 ( -26 or -0.42% ) The ASX remains in a tight sideways range for the 4th straight week; and as such our levels remain unchanged. VOLATILITY ALERTS: Tue 11:30 – NAB Business Confidence Fri 11:30 – RBA Financial Stability Review For a continued move higher we must now see the ASX hold above 6140 followed by a retest of 6206. Should this occur we will look for a move into 6276, and if momentum to the upside is very strong we cannot rule out a move to 6345 and 6374. If the ASX cannot hold above 6140, we will look for a move back down to 6085 before a pause. A strong break and close below this level however could see the ASX retest 6040, and if downside momentum is very strong we could see a move down to 6002.
EUROPE DAX – 12099 ( -126 or -1.03% ) The DAX sold off for the second straight week and is now testing some key downside levels. We will be discussing this market in more detail in the MEMBER PORTAL this week. For a continued move to the upside we must now see the DAX close above 12215 and 12198, followed by a move into 12384. A break of this level could then result into a quick move into 12566; and if we can break this level we cannot rule out a test of 12640. If the DAX fails to close above 12115, we expect to see a move back down into 12000 before a pause. A break of this level however may result in a sharp move to 11800 before another pause. If the downside momentum is very strong, we cannot rule out another fast move into 11640.
US SP500 – 2890 ( -26 or -0.89% ) The US was again weaker last week following an NFP miss. With Q3 earnings underway this week, we will be discussing what this means for the S&P in the LIVE CHAT ROOM . NOTE: Monday is a public holiday in the US (Columbus Day) VOLATILITY ALERTS: Wed 23:30 – PPI (monthly) Thu 23:30 – CPI (monthly) Sat 01:00 – Prelim UoM Consumer Sentiment For a move higher we would like to see the S&P close above 2902. Should this occur we expect a quick retest of 2908; and a break above this level could set the stage for a bigger move into 2922 and 2930. If momentum to the upside is very strong we cannot rule out a move to 2957 If we cannot hold above 2902 , we will look for a move back down to 2870. A break below this level may result in another quick move down into 2840; and if momentum to the downside is very strong we cannot rule out a move into 2808.
FOREX AUD/USD – 0.7050 ( -167 or -2.31% ) The Aussie dollar is now approaching the key 70c level and all eyes will be on this market this week. VOLATILITY ALERTS: Tue 11:30 – NAB Business Confidence Fri 11:30 – RBA Financial Stability Review For a move higher we would first like to see the AUD hold 0.7014, followed by a strong break back above 0.7113. A break above could see us test 0.7197, and if the move up remains strong we will look for 0.7229 – 0.7236 before a pause. If the AUD breaks back below 0.7014, we may likely see a move back down into 0.6997. A strong break below 0.6997 could see us move back down into 0.6958 and 0.6934. Should the move to the downside remain very strong we will look for a retest of 0.6830.
EUR/USD – 1.1519 ( -83 or -0.72% ) The Euro was also weaker last week as it struggles to make ground against the $US. Will we see a reversal this week? We will be discussing this in more detail in the LIVE CHAT ROOM . VOLATILITY ALERTS: Thu 22:30 – ECB Monetary Policy Meeting Accounts 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 – 1.3114 ( +86 or +0.66% ) The Pound closed last week slightly stronger as buyers fight to push prices higher; but can they maintain last weeks change in momentum? VOLATILITY ALERTS: Wed 19:30 – GDP (monthly) Wed 19:30 – Manufacturing Production (monthly) Thu 19:30 – BoE Credit Conditions Survey For a continued move to the upside, we would like to see Cable remain above 1.3035, followed by a retest of 1.3161 before a pause. Should this occur we will look for a move to 1.3191 and 1.3277; and if momentum is very strong we could see a re-test of last week’s highs into 1.3386. On the downside, should we break and close strongly below 1.2868, there is every chance we see a move lower into 1.2720. Should this level break however we could see a fast move down into 1.2622.
USD/JPY – 113.73 ( +4 or +0.04% ) The $/YEN is now at strong technical resistance and this will be a key week for this market. NOTE: Monday is a public holiday in Japan (Health Sports Day) For a continued move to the upside we must first see this market close above 113.86. Should this occur we will look for a retest of retest 114.52. A break above this level may see the $/YEN move higher into 115.54, and if momentum is very strong we will look for a move to 116.08. If we cannot close above 113.86 we will look for a move back down into 112.39. A break below this level is likely to result in a retest of 111.73; and as we mentioned last week: Should we break below 111.73 WATCH OUT- the move that follows may be very sharp into 111.09 and 109.94.
COMMODITIES GOLD – 1202 ( +11 or +0.92% ) GOLD is once again inside the sideways range we have been talking about for months and we are once again on alert for a breakout. For a move higher we must see this market close above 1206 on its way to 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 1206, we could see another quick decline into 1187. Any subsequent breaks of this level may result in further downside into 1180, and if momentum to the downside remains very strong we cannot rule out a move into 1170.
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