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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.
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AUSTRALASIA
ASX – 5527 ( + 68 or + 1.25% )
After a slow start the ASX reached a low of 5365 which was only 2 points below the all important FICM level of 5367 as mentioned in previous weeks. We then saw a bounce off this level rallying over 150 points.
For the up move to continue and possibly start a new trend up we would like to see a solid break and close past 5562 with a long up bar before a further push towards 5732 is made.
If we are to see another attempt at a downward move then we would like to see 5461 broken early in the week followed by 5447 and 5415. We will then be watching the all important level of 5367. It will all depend on how quick the downside moves progress if this level is to be broken.
EUROPE
FTSE – 6863 ( + 99 or + 1.46% )
The FTSE moved higher last week breaking all key levels with long up bars. It now seems that the markets have a complete bullish tone, basically nothing can stand in its way? We are back at levels where the FTSE found some resistance.
For the up move to restart we would like to see strong early breaks back above the previous resistance level of 6878 – 6904. Once these two levels are breached we will discuss in our LIVE CHAT ROOM.
For a downward process to restart we would like to see 6878 continue to act as resistance before a move back down past 6851 is seen. Once this is broken 6834 and 6791 could be tested. If the downward momentum is strong past 6791 then we could see 6696 reached.
DAX – 10023 ( + 181 or + 1.84% )
The DAX moved higher last week pegging back all of the previous weeks move to close near its all time highs. With no fear in the markets, is this the time the DAX breaks through and starts a new uptrend? As mentioned previously “With continuous new all time highs being reached and then failing to hold, it is important to understand this behaviour before taking part in that direction.”
For the upmove to continue we need to see a solid break past the area between 10021 – 75. Any strong break past this area could reach 10146 and possibly extend to an ambitious level of 10258.
If the DAX cannot hold these levels and we see a move back down we would like to see 9949 broken early in the week followed by 9899 being reached. If the momentum is strong then 9750 and possibly 9707 could be seen.
US
S&P – 1984 ( + 25 or + 1.28% )
The S&P continued higher last week reaching another all time high. All the estimates by the major banks have been surpassed. But now it seems the Central Banks are arguing Internally. Does this sound like a growing economy to you or does it signal some serious underlying issues that are being suppressed?
If the S&P stays on this course then the next projected level is 1993 – 2002. We will however be discussing the moves in our LIVE CHAT ROOM.
For the down move to restart then we would like to see a solid break back down past 1964 reaching the area between 1950 – 47.
FOREX
AUD.USD – 9359 ( – 64 or – 0.68% )
The AUD broke above 9423 to reach a high of 9504, but that’s where it ended as it fell back down below 9423 and back into the range. “It is still range bound and the 2 FICM levels we are looking for before a significant move occurs are 9203 and 9423. Until these 2 key levels are broken our comments from last week remain the same.”
For the move higher to continue we would need to see an early break and close past 9423 and 9460 before the potential to reach 9539 could occur. Once this is reached the AUD could start a new phase and potentially new up trend.
If the USD finds strength and 9423 proves to be difficult to stay above, then a move past 9333 could reach 9287. If the downward momentum is strong then we would like to see a strong break and close past 9287 reaching 9203 were the AUD might find temporary support.
EUR.USD – 13608 ( – 40 or – 0.29% )
An early move higher for the EUR, but then back down.to close slightly lower from last week. Now Draghi says that Interest rates will remain low for an extended period.
If the EUR was to strengthen then we would like to see the area between 13637 – 69 broken early followed by a further break past 13713. Once this level is also broken we could see the EUR back near 13749- 79.
For the EUR to restart a move down we would like to see an early break past 13589 reaching 13513. Once this occurs we could see the area between 13482 – 72 reached. If the momentum is strong then we could see 13392.
GBP.USD – 17163 ( + 130 or + 0.76% )
The GBP continued its move higher last week as the USD remains depressed by long term interest rates.
For the GBP to move higher we would like to see solid support near 17105 which could then lead the pair towards 17283 and eventually 17324.
For the GBP to move lower then we would like to see a solid long down bar break and close below 17064. Once this occurs further downside moves past 17000 could reach 16935.
USD.JPY – 10212 ( + 69 or + 0.68% )
The USD.JPY is definitely in limbo as any breaks are met with either support or resistance pushing it back into the range between 10152 and 10270. After the break last week we stated “The Big question is as the USD.JPY has been tied to the S&P 500 for a while now, could this be an early warning sign of the future direction of the S&P500 or will the FED step in here too?”
For the USD to move higher we would like to see a strong break and close above 10270 followed by a strong push towards 10309. If the momentum is strong then we could see 10356 reached. This level will then need to be broken with a long solid up bar before we see 10410.
If we see another downward move then we would like to see an early break past 10180 followed by further strong breaks past the area between 10169 – 10152 leading the pair to reach 10052. If 10052 is then broken with a long solid down bar we could see 9977.
COMMODITIES
GOLD – 1319 ( + 3 or + 0.23% )
It looks like someone is now trying to suppress the moves on GOLD? “If we see a shift from complacency in this market turning to panic GOLD might find strength as a safe haven once more.” has the shift started? “WILL THE FED THEN TAKE ACTION TO SUPPRESS THE VOLATILITY IN GOLD TO AVOID PANIC”
For the upward move to continue higher we would like to see an early break and close past 1326 – 1330 area. This could then lead GOLD to reach the area between 1351 – 59. Once this area is broken the 1367 – 77 will play an important role in defining the next move.
If the down move restarts then we would like to see an early break past 1296 reaching 1285. Once this level is also broken we could see GOLD testing 1274 once again.
US LIGHT CRUDE OIL – 103.88 ( – 184 or – 1.74% )
Another down move for OIL as it seems that the markets have discounted any further action in Iraq. As mentioned previously “….Caution should be taken if you decide to chase explosive moves.”
For the upmove to restart we would like to see an early break back above 104.06 followed by further breaks past 104.62 and 105.54. Once these are achieved we could see 106.37
If the move lower continues then we would like to see a strong break and close past 103.48 which could lead to 102.44. If the downward momentum is strong then 101.84 could be next with a possible extension to 101.16.
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