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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5188
The ASX broke through 5126 and it as a new support level all week. If we are to see 5301 reached, then this up move needs to start early in the week or it could find itself slowing down and going sideways.
For a down move to occur if 5126 is broken we could could see a new support level of 4982. If this level does not hold then down to 4902 is possible.
EUROPEAN SESSION
FTSE – 6529
The FTSE has made some strong moves past 6434 on the way up and is near February’s high of 6550. For this move to continue it is important for the FTSE to break this level early with solid up bars. Our primary model FICM indicates a potential slowdown occurring if it does not pass this high.
If the high is broken then we would be looking for 6654 to be reached with momentum.
On the other side, if the slowdown occurs and the FTSE cannot break higher, the short term levels we would be looking at are 6460 and 6414.
DAX – 8118
The DAX bounced off 7435 with real strength and broke past 8007 reaching a high of 8130, which was only 30 points away from last weeks extension target level.
If this momentum is to continue and an up move is to extend further, then we could see 8338 in the short term and 8670 reached in the medium term.
If these levels make the DAX a little shaky and it decides to come back down, then we could possible see 7974 and if the down move has some strength then 7887 could be the target.
CAC – 3906
The CAC has taken its lead from the other key indices and made a solid move past its previous high in March.
However, these moves need to be sustained and this needs to be done early in the week, otherwise a potential slowdown could occur. A continued strong move up could see 4064 in the short term.
We’re cautious if 3853 if broken on the downside with strength, it will need to break 3793 before it could see 3697.
US SESSION
S&P – 1613
The S&P received the good news it needed to break through 1600. As mentioned last week, the USD.JPY did not help its cause prior to the news, nor did US Treasuries, as they stayed above 14900. But, once the news broke US Treasuries fell by over 100 points. This is a very large move considering most of the major players are in this market.
This week we will be looking for possible continuation of the strong move following on from Friday night with possible levels of 1637 followed by 1660.
If the current up move takes a breather and cannot find strength to continue, then a down move could see the S&P back down to1591. If downwards momentum continues past this point then 1561 is possible.
US Treasuries have closed well below 14800 and will be watched carefully for a break either way this week.
NASDAQ – 2942
The NASDAQ made its strong move up early this week, especially following on from Friday night.
After breaking the highs of 2876 early it continued forward, and the payroll data was icing on the cake.
Now just like any other strong move, the process of continuation needs to occur early, otherwise it’s possible a strong move like last weeks could come to a screaming halt.
If the upmove continues past 2952 with the same strength then we would look for a possible short term target of 3044.
If we see a pull back down past 2928 on the downside the we could see 2909 or even 2897.
FX MARKETS
AUD.USD – 10311
The AUD has again attempted to break back up through 10353 but found resistance near the 10380 levels and settled below 10353.
In the short term if the move continues up then we would look for a potential target of 10387.
If the move moves back down then we would look for a wider potential support bracket between 10245 and 10264.
Markets tend to overextend themselves from time to time, so it’s important to be aware of the liklihood of this just in case a false break takes place.
There are two levels we are watching before a significant move either way could take place. They are 10442 on the upside and 10164 on the down.
EUR.USD – 13113
After its initial attempt at a rally at the start of April the EUR has been trading in range and we see the following two levels as being important before further moves take place. They are 13230 on the upside and 12949 on the down.
If a break above 13230 occurs then the next level we will be looking for is 13392. If the break occurs on the downside then we will be looking for 12806
Short term levels that we will be watching are 13175 on the upside and 13043 on the down. The moves need to have strength behind them with long continuous bars.
GBP.USD – 15570
As discussed last week the GBP made its serious attempt at 15685 by breaking 15501 with some strength and it appears to be half way through its current up move.
If it reaches 15685 then we feel it needs to occur early in the week otherwise a potential slowdown could occur.
If this does happen then it could find itself back down near 15362 before it finds potential support and tries another attempt at 15685.
USD.JPY – 9895
The JPY started to make a move down early last week but better job numbers from the US helped it attempt another move up.
Due to the positive events on Friday, if last weeks down move has been reversed and a new upmove is in the process, then we will be looking for 9917 and 9941 to be broken with strength before a new attempt at 100 is made.
If Fridays bar was just a fakey and the down move continues then we will be looking for 9824 to break and break well before an ambitious target of 9625 plays out.
COMMODITIES
GOLD – 1470
GOLD’S sideways move last week has halted the 100+ rally from last month’s lows.
If it is to take another leg up, we see 1504 as being the level that needs to be broken for this to take effect and reach a potential short term target of 1567.
If a continuation or extension of a down move is to occur then we see 1444 playing an important part, and if broken, then a move below 1400 is possible but it needs to be done with strength. Otherwise it may find support near 1436.
US LIGHT CRUDE OIL – 9546
Last week we saw this commodity range approximately 500 points. A down move was met with solid support at our level of 9017 with a low of 9010 followed by a rally past last week’s level of 9469 to close at 9546.
If this momentum continues into the week then 9744 could be reached earlier than thought, and if this occurs with strength then we would look for 9946 as the next potential target.
If 9744 proves to be too much to break, then a short term support level of 9346 could be established. Two short term levels we will be looking at are 9585 on the upside and 9413 on the down side.
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