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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6576 ( -230 or -3.38% )
The ASX failed to rally higher having struggled to hold key support last week. We will be discussing this in our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Tue 14:30 – RBA Interest Rate Announcement
Wed 12:30 – RBA Governor Lowe Speaks
Fri 09:30 – RBA Governor Lowe Speaks
Fri 11:30 – RBA Monetary Policy Statement
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 – 13424 ( -451 or -3.25% )
The DAX sold aggressively last week and this will be an important week driven by sentiment.
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 – 3704 ( -133 or -3.47% )
The S&P once again posted another all-time high before reversing immediately. We are watching this market closely now for signs of bigger moves. We will be discussing this in our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Tue 02:00 – ISM Manufacturing PMI
Thu 02:00 – ISM Services PMI
Sat 00:30 – Non-Farm Employment Numbers
For a move higher we would like to see the S&P hold above 3650. Should this occur, we will look for a move to 3733; and if momentum is very strong we cannot rule out a move to 3780.
If we cannot hold above 3650, we could see this market move lower into 3620. A break of this level however may result in a quick move down to 3560; and if momentum to the downside remains strong we may see a fast move down to 3498.
FOREX
AUD/USD – 0.7642 ( -72 or -0.93% )
The Aussie Dollar is taking a breather for the time being as we await to see the next leg of this move.
VOLATILITY ALERTS:
Tue 14:30 – RBA Interest Rate Announcement
Wed 12:30 – RBA Governor Lowe Speaks
Fri 09:30 – RBA Governor Lowe Speaks
Fri 11:30 – RBA Monetary Policy Statement
For a move higher, we would first like to see the AUD close 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 close 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 – 1.2136 ( -35 or -0.29% )
The Euro was relatively flat last week and this week we are looking at a potentially volatile week this week. We will also be discussing this in our LIVE CHAT ROOM this week.
For a move higher we would like to see the EURO hold 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 hold 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 – 1.3699 ( +17 or +0.12% )
Cable was relatively flat last week and as such our levels remain unchanged.
VOLATILITY ALERTS:
Mon 20:30 – Final Manufacturing PMI
Wed 20:30 – Final Services PMI
Thu 23:00 – BoE Interest Rate Announcement
Sat 00:30 – BoE Governor Bailey Speaks
For a move to the upside now, we would like to see Cable hold above 1.3534, before a break higher through 1.3743. If this market can hold above this level we may then see a strong push into 1.3875 before another pause. A break through this level sets Cable up for a move up to 1.4041.
Should we fail to hold above 1.3534, we will look for a move down to 1.3410. A break below this level however could see Cable further depreciate to 1.3277 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3161.
USD/JPY – 104.72 ( +96 or +0.93% )
The $/YEN continues its strong performance with the 2nd straight consecutive week higher.
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 – 1848 ( -8 or -0.43% )
Gold is rotating around the key 1850 level and this is a key market to watch this week. 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 1850. Should this occur we would then need to see a strong break back above through 1900. Should this occur we could see further upside into 1920; and if momentum is very strong we may see a retest of 1950.
If Gold cannot hold above 1850, we will look for a move back down to 1830. A break below this level could see a move lower into 1800; and if momentum is very strong to the downside we could see a move to 1750 and 1726.
