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 – 5756 ( -9 or -0.16% ) After a mid-week low the ASX was able to recover early week losses however still closed lower for the week, with the RBA again making no changes to the benchmark interest rate. VOLATILITY ALERTS: Tue 11:30 – NAB Business Confidence Wed 15:05 – RBA Governor Lowe speaks Fri 11:30 – RBA Financial Stability Review For a continued move higher we must now see the ASX close above 5777 and on its way to retest 5823. A strong close above this level could see a move to 5921 and 5985. Should we break through 5985 we may see a quick retest of 6000; and if momentum is very strong we cannot rule out a move to 6140. If the ASX cannot close above 5777, we will look for a move back down to 5746. A strong break and close below this level could see the ASX test 5703, and if momentum is strong we could quickly see a further move down into 5668. EUROPE DAX – 12182 ( +93 or +0.77% ) Once again the DAX found buyers at our key level near 11790. This week is setting up to be an important week for this market and we will be discussing this in more detail in the LIVE CHAT ROOM . VOLATILITY ALERTS: Wed 21:00 – ECB President Draghi speaks Thu 21:30 – ECB Monetary Policy Meeting Accounts Fri 02:00 – German Buba President Weidmann speaks For a continued move to the upside we must now see the DAX hold above 12115. Should this occur we will look for a move back up to 12384. A strong break of this level could then see the DAX rally quickly to 12566; and if momentum to the upside is very strong we cannot rule out a move to 12714. If the DAX fails to hold above 12115, we will look for a move down to 11755. However should this level break be prepared for a potentially strong move down into 11519.
US SP500 – 2605 ( -31 or -1.18% ) Last week’s tariff announcement saw market retest the important 2562 before a reversal that was all but faded by the end of the week. We will discuss the impact of this in the LIVE CHAT ROOM this week. VOLATILITY ALERTS: Tue 23:30 – PPI (monthly) Wed 23:30 – CPI (monthly) Thu 04:00 – FOMC Minutes Sat 00:00 – Prelim UoM Consumer Sentiment For a move higher we would like to see the S&P close above 2638. Should this occur we will look for a move back up into 2660. A strong break and close above this level could see the S&P rally quickly to 2680, and if momentum remains strong to the upside we cannot rule out moves to 2720 and 2736. If we cannot close above 2638, we could see this market continue to sell-off into 2590 before a pause. A break below this level however could mean this market retraces lower into 2562; and a close below this level may see a retest of 2540. If the S&P closes below 2540 watch out- we could see a very sharp move into 2511 by the week’s end.
FOREX AUD/USD – 0.7674 ( -6 or -0.08% ) The Aussie Dollar has remained practically unchanged and as such our commentary this week remains the same. VOLATILITY ALERTS: Tue 11:30 – NAB Business Confidence Wed 15:05 – RBA Governor Lowe speaks Fri 11:30 – RBA Financial Stability Review For a move higher we must now see this market close back above 0.7729; followed by a retest of 0.7833.Should this occur we will look for this market to retest 0.7903; and if momentum is very strong we cannot rule out a move back up to 0.7988 and 0.8033. If we cannot close above 0.7729, we are likely to see a move lower into 0.7662. Should the downside momentum continue we could see a quick move into 0.7620; and if selling pressure is strong a move into 0.7600 cannot be ruled out. EUR/USD – 1.2281 ( -43 or -0.35% ) The EURO is now entering its 3rd straight month in a large sideways range, and we are again on alert for a breakout move. VOLATILITY ALERTS: Wed 21:00 – ECB President Draghi speaks Thu 21:30 – ECB Monetary Policy Meeting Accounts Fri 02:00 – German Buba President Weidmann speaks For a sustained move higher we would like to see the EURO hold above 1.2266 followed by a strong break through 1.2360. Should this occur, we will then look for this market to test 1.2420; and if momentum is very strong we could see a push higher into 1.2520. If the EURO cannot close above 1.2266, we could see a move back down 1.2165 before a pause. This is an important level and any subsequent strong break and close below this level may see the EURO sell-off further into 1.2042 this week.
GBP/USD – 1.4088 ( +63 or +0.45% ) Can the Pound rally higher this week following last week’s reversal? We will discuss this in more detail in the MEMBER PORTAL this week. VOLATILITY ALERTS: Thu 10:30 – Halifax HPI (monthly) Wed 18:30 – Manufacturing Production (monthly) Thu 18:30 – BoE Credit Conditions Survey For a move to the upside we would like to see the GBP/USD hold above 1.4075. A hold above this level may result in a move into 1.4194. Should momentum remain strong to the upside, we could see a move into 1.4223 by the week’s end. If we cannot hold above 1.4075 we could see a quick move down into 1.3875. A continued sell-off may see another move lower into 1.3743 – 1.3725 before a pause. However should we see a strong break below these levels we may see Cable quickly trade down into the important 1.3683 and 1.3654 area. USD/JPY – 106.94 ( +65 or +0.61% ) The $/YEN did indeed rally higher last week as we have discussed in the LIVE CHAT ROOM over the past fortnight. Can we continue to rally this week or will the bears be active early in the week? VOLATILITY ALERTS: Thu 10:30 – BoJ Governor Kuroda speaks For a continued move to the upside we would now like to see the market break above 107.36. Should this occur we will then be looking for a quick move into 107.75. A strong break and close above 107.75 could then see a quick move into 108.31 before a pause. If momentum is very strong this week, we cannot rule out a move to 109.21 by the end of the week. If however the USD/JPY cannot break above 107.36, we could see a move back down into 106.30 and subsequently 105.79. A break below this level could then see the USD/JPY trade quickly down to 104.97 before a potential pause.
COMMODITIES GOLD – 1333 ( +8 or +0.6% ) GOLD continues to bounce in and and out of levels with 1322 and 1333 being key levels last week. For a continued move higher we must now see this market close above 1333. Should this occur we will look for a move into 1355, and a close above this level could see further upside into 1365. If momentum remains very strong, a very strong move into 1374. If Gold cannot close above 1333, we will look for a strong move back down into last week’s close at 1322. A strong break below this level could see GOLD sell off further into 1303, and if momentum is strong to the downside we could see a sharp move down into 1294.
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