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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 and discuss in our LIVE CHAT ROOM.
Trade View has entered the weekend Net Long.
AUSTRALASIA
ASX – 5939 ( + 40 or + 0.68% )
The ASX is trying really hard to move higher but its find some resistance midweek but then picks up on Fridays. We have seen this for a few weeks now and feel that if it can get over that hurdle then we could see a decent rally.
NOTE: Bearish Divergence has formed and it is outside the Standard Deviation Channel.
For the ASX to move higher we would like to see a strong early break and close past 5982. If the momentum stays strong and we see mid week rallies then we could see the ASX extend towards 6108 very quickly, this will then complete the range.
If the Divergence kicks in and ASX cannot rally then we would like to see a complete reversal of Friday’s move breaking past 5892 followed by a strong break back down past 5842 before reaching 5790. If the momentum is strong then we could see a push past 5754. Once this occurs we could see temporary support near 5715.
EUROPE
DAX – 11396 ( + 279 or + 2.51% )
The DAX is not waiting for anyone atm, it may pause for a second or two but once it catches it’s breath off it goes again. We feel that if these moves by the DAX are the real deal then the rest of the markets will need to catch up, either way get ready for some action over the next week or two.
As we are at all time highs again we will be watching the momentum to decide on direction. If the up moves are fast then we will look for 11621 as our first level which will complete the range. If the momentum continues strong and the other world indices rally the DAX could extend towards 11791. Any short term moves will be discussed further in our LIVE CHAT ROOM.
If the downside move starts then we would like to see an early break past the area between 11292 – 57, if the move is strong then we could see 11080 very quickly. If this level is also broken then 10941 could play an important role in deciding the next phase of the down move.
US
S&P – 2107 ( – 3 or – 0.14% )
Deja-Vu “Another move higher by the S&P closing at a new ATH. This could be the start of a new leg up unless some unexpected news comes out to force it lower.” Some amended levels to the downside moves but most of our comments remain the same.
For the up move to continue we would like to see a strong early break and close past 2126. As we are now at ATH’s for many Indices, Moves higher will be discussed in our LIVE CHAT ROOM. The main reason for this is that the next target relies on momentum and until this is seen then they cannot be calculated.
For the down move to restart we would like to see an early long down bar break and close past 2101 before getting back down to 2085. If the downward momentum is strong we will be monitoring both 2076 and 2050.
FOREX
AUD.USD – 7808 ( – 36 or – 0.46% )
“The AUD moved sideways again last week but trying to pop its head up and look’s like it wants to rally. Even so, we will maintain our upside and downside break levels for now, comments remain the same.”
For the up move to restart we would like to see the AUD break back above 7927 before reaching 8088 Once this occurs we can look at further upside moves.
For the downside move to continue we would like to see a strong down bar break past 7718 very quickly. Once this occurs we could see 7494.
EUR.USD – 11195 ( – 183 or – 1.61% )
No short squeeze here, maybe fake breakouts as the EUR continued lower last week. I think the big question is that the markets are still trying to work out what the true value of the EUR really is with the stimulus.
If there is some sort of short squeeze and the EUR moves up again then we would like to see an early break and close back past 11315 before a push towards 11471. If the upward momentum is strong then 11666 could be seen.
For the down move to take another significant leg down we would like to see a strong momentum break and close past 11038. Once this occurs and if the downward momentum continues we will be monitoring 10899 and 10780.
GBP.USD – 15434 ( + 32 or + 0.21% )
Another move higher by the GBP last week popping its head above our key level of 15522 to reach a high of 15552 then falling back down closing 100+ points lower. As the GBP has not closed the week within our key levels our comments from last week remain the same:
Last week we said ”Now that the GBP has made an attempt at moving higher, could we see the opposite of “everso grinding lower with sideways ranging moves followed by a sharp move down then rinse and repeat.” or will it go back to its previous behaviour?” Is the current sideways move the precursor for the next up move?
For the GBP to move higher again we would like to see a solid break and close past 15522 before moving back toward 15644.
For the down move to restart we would like to see an early break down past 15366 reaching 15280. If the downward momentum continues strong then we could see 15140.
USD.JPY – 11964 ( + 63 or + 0.53% )
Last week saw a sideways move with an ever so slightly upward trend balance. We are now looking closely for the USDJPY to make another move in either direction. As always we do not predict we have key levels and once they are broken with strong momentum we make our move.
For the USD to continue its rally we would like to see a strong up bar break and close past 12064. Once this is broken we will be watching the momentum closely near 12184. Moves higher will be discussed in our LIVE CHAT ROOM.
If the USDJPY restarts back lower then we would like to see strong early moves reaching 11813 followed by 11679.
COMMODITIES
GOLD – 1213 ( + 12 or + 1.00% )
We saw GOLD break out of the downward Standard Deviation Channel with a couple of attempts at moving higher. Someone big really does not want GOLD to go up. I have been in the markets for a while now and I can tell you one thing I have learnt, the longer you suppress something the more aggressive the opposite move is.
NOTE: Bullish Divergence has formed.
For the upward move to take full effect we would like to see 1208 hold as a strong level of support before a strong break and close back above three key levels of 1216 and 1226 is achieved. If the momentum is strong then we could see GOLD near 1241 – 52.
If the longer term down move persists then a solid break and close back down past 1208 could see GOLD break back below 1200 reaching 1180 before coming to the next key level of 1171.
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