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 – 6733 ( -120 or -1.75% )
The ASX stages a small recovery towards the end of the last week however still managed to finish the week down. VOLATILITY ALERTS: Tue 09:05 – RBA Governor Lowe Speaks Tue 11:30 – HPI (quarterly), NAB Business Confidence Wed 10:30 – Westpac Consumer Sentiment For a continued move higher we must now see the ASX close above 6804. Should this occur we will look for a re-test of 6850. A strong break of this level however is likely to see the ASX rally to new all-time highs into 6905, and if momentum is very strong we cannot rule out a move to 7011. If the ASX cannot close above 6804, we will look for a move back down to 6720. A strong break and close below this level however could see the ASX move lower into 6650 before a pause; and if downside momentum is very strong, we could see a move down to 6544.
EUROPE DAX – 13173 ( -57 or -0.43% )
The DAX finally broke out of its tight sideways range only return back inside it. This week is a very important week for this market and we will be discussing this in the MEMBER PORTAL this week.
VOLATILITY ALERTS: Tue 21:00 – German ZEW Economic Sentiment Thu 23:45 – ECB Interest Rate Announcement Fri 00:30 – ECB Press Conference
For a continued move to the upside we would now like to see the DAX close above 13205, on its way to retesting 13388. A strong break and close above this level could see a fast move to 13520, and if momentum is very strong we could see a sharp move higher into 13697.
If the DAX fails to close above 13205, we could see a move back down into 13050. A break below this level could mean a further move down into 12921, and if momentum is very strong we could see a fast move down to 12830.
US SP500 – 3146 ( +3 or +0.1% )
The S&P is just shy of all time highs following a strong recovery last week. Will we see more all-time highs this week? VOLATILITY ALERTS: Thu 00:30 – CPI (monthly) Thu 06:00 – FOMC Interest Rate Announcement Fri 00:30 – PPI (monthly) Sat 00:30 – Retail Sales (monthly)
For a move higher we would like to see the S&P hold above 3115. Should this occur, we will look for a retest of 3150. A strong break above this level however sets the stage for a move higher into 3159 and 3166; and if momentum is very strong we cannot rule out a move to 3210. If we cannot hold above 3115, we could see this market move lower into 3100. A break of this level however may result in quick move down to 3066; and if momentum to the downside remains strong we may see a fast move down to 3020.
FOREX AUD/USD – 0.6841 ( +80 or +1.18% ) The Aussie Dollar managed to find support right at our key 0.6762 level. Can this market continue its recovery? VOLATILITY ALERTS: Tue 09:05 – RBA Governor Lowe Speaks Tue 11:30 – HPI (quarterly), NAB Business Confidence Wed 10:30 – Westpac Consumer Sentiment For a move higher, we would first like to see the AUD hold above 0.6800 on its way to retesting 0.6873. Should this occur, we will look for a move into 0.6934, and if upside momentum remains very strong we cannot rule out a move to 0.7014 before a pause. If the AUD cannot hold above 0.6800, we will look for a move lower into 0.6762. A break of this level sets the stage for a move down to 0.6692; and if momentum is very strong to the downside we may see a move into 0.6598.
EUR/USD – 1.1060 ( +42 or +0.38% ) The Euro finished last week slightly higher and all eyes are on this market this week for its next leg. VOLATILITY ALERTS: Thu 23:45 – ECB Interest Rate Announcement Fri 00:30 – ECB Press Conference For a move higher this week, we would like to see the EURO hold above 1.1033; followed by a break back above 1.1197. Should this occur, we cannot rule out a move to 1.1249 if momentum remains strong. If the EURO cannot hold above 1.1033, we could see a move back down into 1.0977. If this market continues to sell-off, we could see a sharp move down into 1.0902 and 1.0814 by the week’s end.
GBP/USD – 1.3137 ( +205 or +1.59% ) Last week’s biggest mover finally broke out of its sideways range and this week markets around the world will look to the UK for what should be a very exciting week. We will be covering this market exclusively in the LIVE CHAT ROOM this week. VOLATILITY ALERTS: Tue 20:30 – GDP (monthly), Manufacturing Production (monthly) Thu ALL DAY – Parliamentary Elections For a continued move to the upside, we must now see Cable hold above 1.3110. Should this occur we will look for follow-through to 1.3277 this week. If momentum to the upside is very strong, we will look for a move to 1.3386. On the downside, a close below 1.3110 could result in a move to 1.3035. A break below this level however could see this market retest the important 1.2868. level; and if momentum to the downside is strong we cannot rule out a bigger move down to 1.2720.
USD/JPY – 108.57 ( -90 or -0.82% ) After the reversal lower last week we are starting to see some concerns amongst the $/YEN bulls. For a move to the upside we must now see this market close above 109.21, on its way to retesting 109.94 before a pause. A strong break and close above this level could then see the $/YEN rally into 110.31, and if momentum is very strong we could see moves to 110.78 and 111.09. If we cannot close above 109.21, we could see a fast move lower into 108.31. A break below this level may result in a retest of 107.75 before a pause. Should we break lower however, we could see a strong move down into 107.36.
COMMODITIES GOLD – 1459 ( -4 or -0.27% ) Gold was sold off aggressively on Friday and this market is back down into the key 1450 – 1460 area. For a continued move higher we must now see this market hold above 1450. Should this occur, we will look for a retest of 1470; and if momentum remains very strong, a strong break above this level could see Gold rally quickly into 1480 and 1505. If Gold cannot hold above 1450, we will look for a move back down into 1433. A strong break and close below this level could send this market lower into 1416, and if momentum is strong to the downside we cannot rule out a move lower into 1402.
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