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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 Short.
AUSTRALASIA
ASX – 5450
After a weak start early the ASX found some momentum and pushed through 5423 again to close 20+ points higher. Once again with only a slight move higher our comments remain the same as last week. We will however be watching to see if this upward momentum continues.
For the up move to continue we would like to see and early break past the previous highs of 5494 with a long solid up bar. Once this occurs we could see 5553 reached. If this level is also broken with strong upward momentum then we could see an extension towards 5777.
For the down move to restart then we would like to see a strong break and close back down through 5423 followed by the same for 5366. Once this occurs then the area between 5271 – 37 could be tested. If broken then 5200 could be reached and if the downward momentum is strong then the ASX could find potential support near 5144 – 25.
EUROPE
FTSE – 6740
The FTSE had an interesting week last week as we saw a gap down on Monday morning of about 100 points followed by a strong rally back to previous levels to then drift slowly back down closing on our FICM level of 6740 mentioned previously.
For the FTSE to continue its up move we would like to see a break past 6775 followed by a solid break and close above 6847 early in the week followed by a push towards 6903. Once this occurs then we would like to see 6903 broken with similar momentum followed by a push towards 7036 which would then complete the range.
For the down move to restart then we would like to see an early break and close past 6718 with a long solid down bar. Once this occurs then we would like to see another strong break past 6656 which could then lead it to reach 6563. If this level is also broken with solid downward momentum then the FTSE could be looking for support near 6433 – 6395 area as FICM our primary model is showing potential support levels.
DAX – 9394
The DAX almost replicated the move of the FTSE, the question is who lead? I say its the DAX.
For the DAX to restart an upmove from these levels then we would like to see a solid start to the week where the DAX breaks through 9431 followed by a strong break past 9527. Once this occurs then we could see 9617. If this is also broken then 9734 could be reached.
For the down move to take full effect then we would like to see another strong break and close past 9377. Once this occurs the two levels we will be watching closely will be 9222 and 9113 depending on the speed of the down move we could even see 8960 reached.
US
S&P – 1878
After a sizeable gap down on Monday morning the S&P powered forward to reach and break another all time high. It is now a momentum push forward for the S&P and the big question around is when will it stop? Our comment from last week will remain ”Once a technical break occurs then it needs to be followed up by fundamentals otherwise it might not hold those levels for very long”. So watch those fundamentals closely.
For the S&P to continue the move up we would like to see another solid break and close past 1880 early in the week which could then lead the Index towards 1900. Once this is reached and if the momentum continues strong then we could see 1913.
If the Chinese export data is received as bad news by the markets (-18.1%) and a down move restarts then we would like to see 1861 broken early in the week followed by a strong break past 1837 with could then see 1809 – 05 area tested.
FOREX
AUD.USD – 9067
The AUD moved higher breaking past 9100 amid the USD losing ground across its piers and the RBA indicating no need for a rate cut as the economy improves while Ford, Holden, Toyota, Qantas, Construction all reduce staff in Australia (a typical sign of an improving economy?).
For the upmove to continue and the new trend takes effect we would like to see a strong early break past 9134 followed by a break past 9182. This could then lead the pair to reach 9289. If the momentum continues then 9373 could be reached.
If the AUD restarts the longer term down move again then we would like to see 9002 broken early in the week which could then lead the pair towards 8924. If we see a strong long down bar through 8924 then we could see 8873 where it might find some temporary support.
EUR.USD – 13874
After a slow start to the week the EUR strengthened late against the USD testing previous highs in Dec 2013 by reaching a high of 13915 to then close 40 points lower. We have been monitoring the EUR for sharp moves, we have our first, now it will be a challenge to see if the move will continue or we see another sharp move in the opposite direction.
For the up move to continue we would like to see another attempt of a break and close above the previous high of 13893 (set back in Dec 2013). If this occurs then we might see the EUR near 13938 and possibly touch 14000 once again. Once this occurs we will revise upper levels.
For the EUR to move back down we would like to see a strong early break past 13758 – 34 area before reaching 13685. We would then like to see solid long down bars break 13625 reaching 13589.
GBP.USD – 16710
Another side ways move for the GBP against the USD even though the US weakened against other currency pairs. Therefore our comments remain the same as last week. We are still monitoring this pair very closely as we believe sharp moves will be ripe.
If the GBP continues its strong move higher we would like to see it break back through 16747 with a long solid up bar. If this occurs early in the week and the momentum continues then we could see 16914. Once this level is reached we will look to revise.
If the GBP does start a downward move then we would like to see 16676 broken early in the week before reaching 16537. Once this is reached we would like to see a long down bar break 16445 before reaching 16295. If the GBP does not find support here then 16070 could be reached.
USD.JPY – 10325
The USD gained strength against the JPY last week rallying almost 200 points to close above an important level of 10309.
If the USD continues to find strength then we would like to see 10353 broken early in the week before reaching 10409. Once this occurs and if the momentum is still strong then we could see 10543 reached very quickly.
If the USD once again loses it’s appeal and a down move restarts then we would like to see 10309 broken early reaching 10267. Once this is broken we could see 10218 followed by 10172. If the downward momentum continues strong and 10172 is broken with a long down bar then 10052 could be seen.
COMMODITIES
GOLD – 1339
Once again Gold made initial moves higher but to see it move back down (trading in a 26 point range) but this time closing 13 points higher from last weeks close.
For GOLD to continue higher we would like to see an early break past 1342 followed by a strong long up bar breaking and closing past 1355. Once this occurs we could see 1380 first and if the momentum is strong then 1391 could be reached. We will revisit GOLD upper levels once 1391 is reached as GOLD might find some resistance.
If the slowdown mentioned last week takes full effect and the down move starts then we would like to see an early break past 1337 followed by a strong break past 1320. Once this occurs we could see 1303 reached. If the momentum is strong then an extension could see 1282.
US LIGHT CRUDE OIL – 102.34
With an initial gap up of 200 points OIl fell back down to close only 27 point higher. A bit of Volatility coming into the OIL price but nothing unusual when we have unfortunate world events possibly unfolding. As we have only closed slightly higher our comments remain the same as last week with slight mathematical changes to levels. We will be watching OIL closely for signs of a break over the next week or so.
For OIL to continue its move higher we would like to see another attempt at breaking and closing above 102.70 early in the week leading it towards 104.07 with strong momentum and long up bars. Once this occurs and if the momentum is still strong we could see 106.19 reached with an extension towards 107.21.
For a down move to restart then we would like to see OIL break back down below 101.82 and 101.31 with strong momentum which could see 100.68 reached. Once this level is broken then we could see another push below 100 reaching 99.35. If the momentum continues strong and we see a solid break past 99.35 then 97.44 could be reached and a possible extension to 96.99.
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