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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6764 ( -31 or -0.46% )
The ASX continues within its sideways range and we are once again on high alert for a breakout. We will be discussing this in our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Mon 10:15 – RBA Governor Lowe Speaks
Thu 11:30 – Unemployment Rate
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 – 14561 ( +510 or +3.63% )
The DAX has finally broken out of its sideways range and once again posted all time highs.
For a continued move to the upside we must now see the DAX hold above 14303. Should this occur, we will look for a strong move up into 14596, and if momentum remains strong a push back higher into 14790.
If the DAX fails to hold above 14303, we may see a retest back down into the key level of 14210. A close below this level is likely to see a retest of 14120; however, if momentum is very strong to the downside we cannot rule out a move to 14000.
US
SP500 – 3943 ( +101 or +2.63% )
The S&P is at an important double top area as we head into FED week. We will be discussing this in our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Tue 23:30 – Retail Sales (monthly)
Thu 05:00 – FOMC Interest Rate Announcement
Thu 05:30 – FOMC Press Conference
For a move higher we would like to see the S&P close above 3950. Should this occur, we will look for a move to 4000; and if momentum is very strong we cannot rule out moves back up to 4022 and 4050.
If we cannot close above 3950, we could see this market move lower into 3894. A break of this level however may result in a quick move down to 3802; and if momentum to the downside remains strong we may see a fast move down to 3720.
FOREX
AUD/USD – 0.7757 ( +78 or +1.02% )
The Aussie dollar bounced back last week however we still see sellers defending the important 78c level.
VOLATILITY ALERTS:
Mon 10:15 – RBA Governor Lowe Speaks
Thu 11:30 – Unemployment Rate
For a move higher, we would first like to see the AUD hold above 0.7729. Should this occur we will look for a move into 0.7823, and if upside momentum remains very strong we cannot rule out a move to 0.7997 before a pause.
If the AUD cannot hold above 0.7729, we will look for this market to break lower through 0.7662. 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 – 1.1951 ( +41 or +0.34% )
The Euro was also slightly stronger but faces an uphill battle. We will be discussing what this means in our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Wed All Day – Dutch Elections
For a move higher we would like to see the EURO hold above 1.1925. Should this occur we could see a retest of 1.2000. A break of this level could see this market rally further to 1.12042; and if momentum is very strong, 1.2112 cannot be ruled out.
If the EURO cannot hold above 1.1925, we could see a fast move down into 11834 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.
GBP/USD – 1.3918 ( +94 or +0.68% )
Cable is holding up well despite having closed below the 1.4000 level for the 2nd consecutive week. Can this market regain this level?
VOLATILITY ALERTS:
Thu 23:00 – BoE Interest Rate Announcement
For a move to the upside now, we would like to see Cable close above 1.3875, before a break higher through 1.4041. If this market can hold above this level we may then see a strong push into 1.4120 before another pause. A break through this level sets Cable up for a move up to 1.4250.
Should we fail to close above 1.3875, we will look for a move down to 1.3743. A break below this level however could see Cable further depreciate to 1.3534 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3410.
USD/JPY – 109.03 ( +64 or +0.59% )
The $/YEN continued its stellar performance of previous weeks but appears to be consolidating now.
VOLATILITY ALERTS:
Tue 12:00 – BoJ Governor Kuroda Speaks
Fri 12:30 – BoJ Interest Rate Announcement
For a move to the upside we must now see this market hold above 108.31. Should this occur we will look for a retest of 109.21, and if momentum is very strong we could see a move higher into 109.94 and potentially 111.73.
If we cannot hold above 108.31, we could see a move lower into 106.52 before a pause to the downside. A break below this level may result in a sharp move lower into 105.50; and any further breaks to the downside may see a bigger move into 104.97.
COMMODITIES
GOLD – 1728 ( +28 or +1.65% )
Gold is basing above the big 1700 level. 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 1700. Should this occur we could see a retest of 1755, and any break of this level could see a stronger move into 1786.
If Gold cannot hold above 1700, we will look for a move back down to 1687. A break below this level could see a move lower into 1674, and if momentum is very strong to the downside we could see a move to 1648.
