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 – 6118 ( -245 or -3.85% )
The ASX closed near its lows last week as the global sell-off continues.
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. EUROPE
DAX – 11546 ( -383 or -3.21% )
The DAX was unable to hold last weeks low suggesting potentially lower prices.
VOLATILITY ALERTS: Thu 23:45 – ECB Interest Rate Announcement Fri 00:30 – ECB Press Conference
For a continued move to the upside we must see the DAX hold above 11366. Should this occur we will look for a retest of 11566. This is a very big level and if the DAX can break strongly above this, we will look for moves into 11755 and 11875. If the DAX fails to hold above 11366, we will look for a move back down to 11050 before a pause. Any break below this level however could see the DAX sell-off sharply into 10863 by the end of this week.
SP500 – 2964 ( -25 or -0.84% )
The S&P is now approaching a very key area down below. We will be discussing this in the MEMBER PORTAL this week.
VOLATILITY ALERTS: We 23:30 – CPI (monthly), PPI (monthly) Sat 01:00 – Prelim UoM Consumer Sentiment
For a move higher we would like to see the S&P hold above 2902. Should this occur, we will look for a move to 2922, and potentially 2941 again before a pause. A strong break above this level however sets the stage for a move higher into 2960 and 2985. If we cannot hold above 2902, we could see this market retest 2838. A break of this level however may result in quick move down to 2812; and if momentum to the downside remains strong we may see a very sharp move down into 2800 and 2785. FOREX AUD/USD – 0. 6642 ( +135 or +2.07% )
The Aussie Dollar managed to hold above the key 66c level last week. We will be discussing the impact of this in the LIVE CHAT ROOM .
VOLATILITY ALERTS: Tue 11:30 – NAB Business Confidence For a move higher, we would first like to see the AUD hold above 0.6598. Should this occur, we will look for a retest of 0.6692, and if upside momentum remains very strong, we may see a push higher into 0.6762 before a pause. If the AUD cannot close above 0.6598, we could see this market break lower and test 0.6519. If momentum to the downside is very strong, 0.6457 cannot be ruled out.
EUR/USD – 1.1289 ( +261 or +2.37% )
The EURO continues its tear to the upside following a big rally last week. Can it continue its stellar run?
VOLATILITY ALERTS: Thu 23:45 – ECB Interest Rate Announcement Fri 00:30 – ECB Press Conference 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 – 1.3047 ( +233 or +1.82% )
Cable also managed to turn things around last week holding onto the all-important 1.2720 level. We will be discussing this market again in the LIVE CHAT ROOM this week. VOLATILITY ALERTS: Wed 20:30 – GDP (monthly). Manufacturing Production (monthly) Wed 22:30 – Annual Budget
For a move to the upside, we would like to see Cable hold above 1.3035, followed by a retest of 1.3161. Should we break above this level, we will look for a move to 1.3191; and if momentum is very strong 1.3250. On the downside, should we fail to hold above 1.3035, we will look for a break down into 1.2868. A break below this level sets the stage for a bigger move lower into 1.2720. USD/JPY – 105.32 ( -276 or -2.55% )
They $/YEN was the weakest of the majors closing the week in freefall fashion. For a move to the upside we must now see this market close above 105.50, on its way to retesting 106.52 before a pause. A strong break and close above this level could then see the $/YEN rally into 107.25, and if momentum is very strong we could see moves to 107.75 and 108.31. If we cannot hold above 105.50, we could see a fast move lower into 104.97. A break below this level may result in a very sharp move down to 103.99. Any further breaks to the downside could see the $/YEN end fall to 103.21, and any further breaks of this level could see a sharp sell-off to 100.76 by the week’s end. COMMODITIES GOLD – 1674 ( +89 or +5.62% )
Gold posted yet another very strong week as other markets remain skittish. For a continued move higher we must now see this market close above 1674. Should this occur we could see a strong move to 1’[687; and any break of this level could see a stronger move to 1724 and 1755. If Gold cannot close 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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