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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6641 ( +72 or +1.1% )
The ASX sold off last week having reached the all important 6700 level. Will we see more selling this week?
VOLATILITY ALERTS:
Tue 14:30 – RBA Interest Rate Announcement
Wed 11:00 – RBA Governor Lowe Speaks
Wed 11:30 – GDP (quarterly)
For a continued move higher we must now see the ASX hold above 6550. Should this occur, we will look for a move into 6682, and if momentum to the upside is very strong we cannot rule out a move to 6804.
If the ASX cannot hold above 6550, we will look for a move back down to 6500. A strong break and close below this level however could see the ASX retest of 6435, and if downside momentum is very strong, we could see a move down to 6276.
EUROPE
DAX – 13363 ( +234 or +1.78% )
The DAX was also higher last week but is now struggling at the key 13,333 level.
VOLATILITY ALERTS:
Mon 21:00 – ECB President Lagarde Speaks
Wed 04:00 – ECB President Lagarde Speaks
For a continued move to the upside we must now see the DAX hold above 13266. Should this occur, we will look for a strong move back up into 13520, and if momentum remains strong a push back higher into 13800.
If the DAX fails to hold above 13266, 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 12714; however if momentum is very strong to the downside we cannot rule out a move to 12566.
US
SP500 – 3639 ( +84 or +2.36% )
Like the DAX, the S&P is also at significant resistance as we head into a very important week. We will be discussing the impact of this this week in the MEMBER PORTAL this week.
VOLATILITY ALERTS:
Tue 01:45 – Chicago PMI
Tue 02:00 – Pending Home Sales (monthly)
Wed 02:00 – Fed Chair Powell Testifies
Wed 02:00 – ISM Manufacturing PMI
Thu 02:00 – Fed Chair Powell Testifies
Fri 02:00 – ISM Services PMI
Sat 00:30 – Non Farm Payrolls
For a move higher we would like to see the S&P hold above 3620. Should this occur, we will look for a retest of 3650; and if momentum is very strong we cannot rule out a move to 3733.
If we cannot hold above 3620, we could see this market move lower into 3560. A break of this level however may result in a quick move down to 3498; and if momentum to the downside remains strong we may see a fast move down to 3395 and 3300.
FOREX
AUD/USD – 0.7377 ( +73 or +1% )
The Aussie dollar continues its march higher with yet another push into the high 73’s; and this market now has its sights set on 0.7400 – 0.7500. We will be discussing this market this week in the LIVE CHAT ROOM.
VOLATILITY ALERTS:
Tue 14:30 – RBA Interest Rate Announcement
Wed 11:00 – RBA Governor Lowe Speaks
Wed 11:30 – GDP (quarterly)
For a move higher, we would first like to see the AUD hold above 0.7364. Should this occur we will look for a move into 0.7447, and if upside momentum remains very strong we cannot rule out a move to 0.7498 and 0.7550 before a pause.
If the AUD cannot hold above 0.7364, we will look for this market to break lower through 0.7282. A break and close below this level could see a sharp decline into 0.7197; and if momentum to the downside remains strong we cannot rule out a move into 0.7112.
EUR/USD – 1.1960 ( +102 or +0.86% )
The Euro is also stronger with a weakening US Dollar allowing this market to potentially retest 1.2000.
VOLATILITY ALERTS:
Mon 21:00 – ECB President Lagarde Speaks
Wed 04:00 – ECB President Lagarde Speaks
For a move higher we would like to see the EURO hold above 1.1925. Should this occur we could see a retest of 1.1980. 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 1.2042 and 1.2112.
If the EURO cannot hold above 1.1925, we could see a fast move down into 1.1834 before a pause. A strong break of this level may result in a move into 1.1738, however any weakness below this level could see a sharp drop into 1.1678 and 1.1613.
GBP/USD – 1.3302 ( +15 or +0.11% )
Cable has put in a short-term high as new rounds of Brexit negotiations take shape. We are monitoring this market closely for any signs of a sentiment shifting move.
VOLATILITY ALERTS:
Tue 20:30 – Final Manufacturing PMI
For a continued move to the upside, we would like to see Cable hold above 1.3277, followed by a move higher into 1.3410 before a pause. If however momentum is very strong we may see a strong push into 1.3550.
Should we fail to hold above 1.3277, we could see a move back down to 1.3161. A break below this level however could see Cable further depreciate to 1.3035 by the week’s end and if momentum is very weak we cannot rule out a move to 1.2867.
USD/JPY – 104.08 ( +25 or +0.24% )
After starting the week very strong, the $/YEN has once again almost all but faded Monday’s entire move.
For a move to the upside we must now see this market hold above 103.80. Should this occur we will look for a push into 105.50, and if momentum is very strong we cannot rule out a move higher to 106.92.
If we cannot hold above 103.80, we could see another move back down into 103.21. A break below this level may result in further downside to 102.80; and any further breaks to the downside may trigger a bigger move into 100.65.
COMMODITIES
GOLD – 1786 ( -84 or -4.49% )
Gold has broken down through the key 1800 level and sellers are now in control of this market. We will be discussing the implications of this in the MEMBER PORTAL.
For a continued move higher we must now see this market close above 1800. Should this occur we would then need to see a strong break back above through 1830. Should this occur we could see further upside into 1850; and if momentum is very strong we may see a retest of 1900.
If Gold cannot close above 1800, we will look for a move back down to 1750. A break below this level could see a move lower into 1726; and if momentum is very strong to the downside we could see a move to 1685.
