This market brief is an overview of the week ahead and some of the events we see as being important to the markets.
Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes. For up to the minute market analysis see our live trading room.
INDICES
AUSTRALASIA
ASX – 6722 ( -48 or -0.71% )
The ASXis back inside its larger sideways range and this will be an important week for this market for bulls to hold their ground. We will be discussing this in our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Tue 14:30 – RBA Interest Rate Announcement
Wed 11:30 – GDP (quarterly)
For a continued move higher we must now see the ASX hold above 6682. Should this occur, we will look for a move into 6804, and if momentum to the upside is very strong we cannot rule out a move to 6850 and 6960.
If the ASX cannot hold above 6682, we will look for a move back down to 6550. A strong break and close below this level however could see the ASX retest of 6500, and if downside momentum is very strong, we could see a move down to 6435.
EUROPE
DAX – 13785 ( -178 or -1.27% )
Like the ASX, the DAX is also in a large sideways consolidation albeit showing strength. Can this market break higher?
VOLATILITY ALERTS:
Tue 03:10 – ECB President Lagarde speaks
For a continued move to the upside we must now see the DAX close above 13800. Should this occur, we will look for a strong move up into 14210, and if momentum remains strong a push back higher into 14450.
If the DAX fails to close above 13800, we may see a retest back down into the key level of 13050. A close below this level is likely to see a retest of 13520; however if momentum is very strong to the downside we cannot rule out a move to 13266.
US
SP500 – 3811 ( -91 or -2.33% )
With a lot of movement in the US markets, we are seeing some excellent volatility and expect this to continue. We will be discussing this in our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Thu 02:00 – ISM Services PMI
Fri 04:05 – FED Chair Powell speaks
Sat 00:30 – Non-Farm Employment
For a move higher we would like to see the S&P hold above 3780. Should this occur, we will look for a move to 3850; and if momentum is very strong we cannot rule out moves back up to 3900 and 3950.
If we cannot hold above 3780, we could see this market move lower into 3733. A break of this level however may result in a quick move down to 3694; and if momentum to the downside remains strong we may see a fast move down to 3655.
FOREX
AUD/USD – 0.7706 ( -161 or -2.05% )
The Aussie Dollar was sold off significantly as markets rejected the all important 80c level!
VOLATILITY ALERTS:
Tue 14:30 – RBA Interest Rate Announcement
Wed 11:30 – GDP (quarterly)
For a move higher, we would first like to see the AUD hold above 0.7662. Should this occur we will look for a move into 0.7750, and if upside momentum remains very strong we cannot rule out a move to 0.7823 and 0.7997 before a pause.
If the AUD cannot hold above 0.7662, we will look for this market to break lower through 0.7617. A break and close below this level could see a sharp decline into 0.7550; and if momentum to the downside remains strong we cannot rule out a move into 0.7489.
EUR/USD – 1.2073 ( -44 or -0.36% )
The Euro was also sold off on Friday and as such has ended the week slightly down.
VOLATILITY ALERTS:
Tue 03:10 – ECB President Lagarde speaks
For a move higher we would like to see the EURO close above 1.2120. Should this occur we could see a retest of 1.2256. A break of this level could see this market rally further and if momentum is very strong, we would be on the lookout for a move to 1.2300.
If the EURO cannot close above 1.2120, we could see a fast move down into 1.2002 before a pause. A strong break of this level may result in a move into 1.1980, however any weakness below this level could see a sharp drop into 1.1925.
GBP/USD – 1.3927 ( -76 or -0.54% )
Cable also reached a critical level at 1.4222 before selling off into the week’s close. We will be discussing this in our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Wed 21:00 – Annual Budget Release
For a move to the upside now, we would like to see Cable close above 1.4041, before a break higher through 1.4120. If this market can hold above this level we may then see a strong push into 1.4250 before another pause.
Should we fail to close above 1.4041, we will look for a move down to 1.3875. A break below this level however could see Cable further depreciate to 1.3743 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3534.
USD/JPY – 106.53 ( +112 or +1.06% )
With the $US finally gaining some strength, the $/YEN managed to rally 4/5 last week to post yet another strong week to the upside.
For a move to the upside we must now see this market hold above 105.99. Should this occur we will look for a retest of 106.82, and if momentum is very strong we cannot rule out a move all the way back up to 108.31.
If we cannot hold above 105.99, we could see another move back down into 105.50. A break below this level may result in further downside to 104.97; and any further breaks to the downside may trigger a bigger move into 103.21.
COMMODITIES
GOLD – 1734 ( -49 or -2.75% )
Gold has broken through very key support as this market continues its downward trend. We will discuss this market in detail in the LIVE CHAT ROOM.
For a continued move higher we must now see this market hold above 1724. Should this occur we could see a strong move to 1755; and any break of this level could see a stronger move to 1786 and 1820.
If Gold cannot hold above 1724, we will look for a move back down to 1674. A break below this level could see a move lower into 1648; and if momentum is very strong to the downside we could see a move to 1605.
