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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 Net Long.
AUSTRALASIA
ASX – 5116
The ASX is range bound at the moment and the 5125 level and is playing a very important part in the overall direction at the moment.
If we are to see an uptrend form, then we would like to see 5125 broken early this week and becoming a solid level of support. Once this occurs we could see a move towards 5249 with a possible extension to 5270.
If we are to see a down move, then we would like to see 5087- 5073 broken with solid momentum which could then lead towards 4983 as a short term level. If 4983 is broken with long down bars then we will be looking for support between 4903-4862.
EUROPE
FTSE – 6407
The FTSE again moved lower last week and has now closed inside the Standard Deviation Channel.
If the down move continues, then a solid break past 6358 and 6306 could lead the Index down to 6221. If the downward momentum is strong we could even see 6080 being reached where the FTSE should find support.
If an up move is to form then we would like to see 6555 – 6599 broken with solid long up bars. If the momentum is strong then we could see 6699 and ultimately 6740 reached.
DAX – 8106
After a few weeks of sideways movement the DAX made an aggressive move down reaching one of our downside targets of 8106. Is this the precursor of things to come? We will be watching the DAX closely over the next few weeks.
If the DAX is to move higher from here, then we would like to see a solid move back towards the 8270-77 area early in the week. If this level is broken then we will be looking for a solid break past 8341 before moving higher and reaching 8480, and then ultimately 8559.
If the DAX is to move lower, then we would like to see 8106 give way early in the week. If this takes place we could see 8057 followed by 8006. If the DAX does not find support then solid downward momentum could see 7933 with an extension to an ambitious level of 7842.
US
S&P – 1634
The S&P made another strong move down early in the week, and this time it stayed down. One thing to take note of is how it closed just outside the Standard Deviation Channel, just above an important level of 1633.
If we see a move down then 1633 needs to be broken followed by a solid move past 1623. If 1623 is broken with long down bars, 1600 will then be the last level of support before dipping into the 1500 territory.
If 1633 provides a strong level of support and we see an up move from here, then we would like to see a solid break past 1648 followed by 1668 which could then lead towards 1693.
NASDAQ – 3078
The NASDAQ continues to defy the moves made by the S&P, and is trading in a range at the moment. The big question is, which of the two indices is correct?
If we are to see an up move commence, then 3101 needs to be broken with solid long up bars. A break through 3148 with strong momentum could lead to 3170 being met with a possible extension towards 3194.
If the downward move is to take full effect, then a break back below 3053 could see 3032 reached, and if the momentum continues 2983 will be our first lower target.
FOREX
AUD.USD – 8895
The AUD has continued its downward move last week and is now into the 80’s.
If the longer term downtrend is to continue then we would like to see 9012 act as strong resistance and a break below 8780. If this level is broken then we will not attempt at setting a downside target.
For a new uptrend to start, the level that we would like to see broken is 9083 – 9096. If 9096 is broken with a strong upward momentum followed by long up bars we could then see 9256. The all important area between 9370 – 9395 will be the deciding factor for the uptrend to continue.
EUR.USD – 13219
The EUR took another leg down last week and reached a low of 13173, which was only 4 points below our lower target set the week earlier.
If the downside move is to continue, then we would like to see 13177 and 13153 broken with long down bars which could lead to 13084. If 13084 does not provide support then the next level that could be reached is 13007.
If we are to see a reversal and a move starts, then we would like to see the 13285 – 13318 area broken early with strong momentum. If this occurs it could then lead to a break past 13347 and ultimately 13432.
GBP.USD – 15491
The GBP made another move down last week and reached a low of 15427 which was approx 40 points from the potential range set back in late July.
If the down move continues then we would like to see 15410 – 15383 broken, which is also the completion of the range. If these levels are broken with strong downward momentum then 15282 could be the next target. If 15282 does not become support then we will look for 15185 to perform that duty.
If another attempt is made at an upward move then a solid break needs to occur past the 15572 – 97 area. Once this is done then 15722 could be achieved.
USD.JPY – 98.11
After a strong start the JPY gave way to the USD, but has now closed just inside the downward Standard Deviation Channel and is in between two levels of interest. 98.63 on the up side and 97.56 on the downside.
If we are to see a new upward trend, then we would like to see the USD strengthen early in the week and close above 98.63. If this happens, we would like to see 99.56 broken with strong upward momentum possibly seeing 100.52 reached.
For this down move to commence and continue we would like to see 98.13 broken followed by a solid break past 97.56 which could then lead towards 96.14 and possibly 95.08.
COMMODITIES
GOLD – 1394
GOLD continued its move up by reaching a high of 1433 which was only 3 points away from the range and potential high of 1436. It has now closed just above 1391 which is going to play an important role in the next move.
If GOLD is to continue its move up then 1391 needs to hold as a solid level of support this week, and any solid move past 1436 could lead GOLD towards 1455 and ultimately 1476.
If we are to see a move back down then we would like 1391 to be broken with a solid long bar followed by 1373. Once this occurs we could see a move back down towards 1353 and eventually 1324.
US LIGHT CRUDE OIL – 107.62
With a potential US strike on Syria, OIL made some aggressive moves up, but went back down just as fast, resulting in a seesaw of 300-400 points moves both ways.
For the up move to continue we would like to see 107.84 broken this week and early. Once this occurs and if continued signs of a strike are strong, then further moves up could be achieved. In this scenario we will not be setting upper targets. Last week we had 114.06 and 119.11.
If no strike occurs and we see a down move, then we first need to see a break past 107.21 followed by a strong break past the standard deviation channel area of 105.60. If this momentum is strong then we could see 102.27 followed by 100.92.
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