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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.
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We may take multiple trades throughout the week. Currently Trade View is light Net Short.
AUSTRALASIAN SESSION
ASX – 4886
The ASX has started its second move down towards 4719. Unless there is some spectacular news this week we don’t see this changing.
If an up move is to play out then 4982 needs to be broken.
EUROPEAN SESSION
FTSE – 6278
The FTSE has broken last week’s target of 6307 and has closed below it. If the move continues then we see 6079 as being reached.
We are still slightly cautious on the FTSE just in case the break does not hold and a reverse bounce back up occurs.
DAX – 7663
The DAX has started its second leg of the down move and broke a key short term level of 7681 and is heading towards 7548, where if broken the full effect of the down move should take place.
Even though the down move has started, it is important not to underestimate the potential for a bounce off 7548, as we only have a soft short term resistance level of 7813.
CAC – 3672
The CAC slowed down last week with an attempt of a bounce but was met by resistance at 3792 and this lead the way for the new down move.
It also broke through short term support at 3694 and is now heading towards previous targets of 3572 and 3522 which could become support.
Any rally from current levels should find 3792 hard to break.
US SESSION
SNP – 1552
The SNP reached a high of 1573, and our previous concerns about US treasuries has come about, as they really took the lead last week and the start of the SNP up move was short lived and now we are in the down move process.
Unfavourable job numbers could see 1500 reached a lot sooner than first thought unless something exceptional happens in the next few weeks. We also see a potential short term support near 1536 if the down move slows down near those levels.
NASDAQ – 2770
The NASDAQ has followed the news and taken a leg down to break 2783 all the way down to a short term support of 2741 (mentioned last week) with a low of 2744.
If this down moves continues into the week then our first target of 2695 is a possibility. Any bounce from here needs to break previous level of 2783 and then get above 2828 for continuance.
FX MARKETS
AUD.USD – 10378
Once again the AUD tried to stay above 10445, which has proven on a number of occasions to be a solid line of resistance.
In saying that, the 10353 level is playing a key role in becoming a decent support level. We say this as a number of our models have indicated this point last week.
If this level holds then it could be the stepping ground for the move back towards the 10554 levels.
If these 2 levels hold then a sideways move could be a possibility. A strong break below 10353 could see our downside target of 10182 come about.
EUR.USD – 12989
The EUR is back at the same levels again after last week’s slowdown process reached a low of 12744, and is now indicating an attempt to reach our previous target of 13083. But for this to occur, 12928 needs to hold if not then we could range between current levels and 12702.
GBP.USD – 15334
This currency pair has now entered its second attempt into an up move but has closed pretty much on the potential resistance area between 15324 – 15352.
If these levels are broken and broken well then look for 15808, otherwise if they prevent this move from advancing then heavy down moves could follow as a result.
USD.JPY – 9752
The slowdown process of the USD.JPY played out last week and without delay the banks were quick to show everyone who is boss. A rally of 400 points followed and broke straight through 9505 which was indicated potential resistance, but was not the case in this instance.
Even though we see potential on the long side of this move, we are looking for a slip up by any Japanese official who says something out of the box followed by the Yen moving 500 points the other way.
COMMODITIES
GOLD – 1580
GOLD has taken a hit over the past week and broke previous targets of 1579 with lows around 1539. In an event driven market it is important to understand the principles of why something moves when an announcement comes out.
GOLD rallied strongly on Friday back up to 1580 which was a potential support level. The main reason for this is that when markets go down people put their money into safe havens, and this time it was Gold.
If 1579 proves to be difficult to break then some big moves down could follow, but if the markets move down then Gold could potentially rally back past 1600.
US LIGHT CRUDE OIL – 93.15
LIGHT CRUDE has made a big move down and broke through potential support of 9347 to close lower. The current slowdown process has really just begun so if it continues in this aggressive manner then look for 9018 with a possible 8774 before the slowdown occurs.
A bounce back through 9347 in the same aggression as the move down could see 9742 tested again.
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