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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.
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Trade View has entered the weekend Net Long.
AUSTRALASIA
ASX – 5544 ( + 3 or + 0.05% )
The Bearish Divergence noted last week halted the move by the ASX, we saw it move sideways and closed only 3 points higher. Therefore our comments from last week remain the same.
NOTE: The ASX has closed below the Standard Deviation Channel and below the long term Trend line.
For the up move to continue we would like to see an early solid long up bar break and close past 5552 which could then lead it towards 5595. If the upward momentum remains strong then we could see the ASX breaking through and reaching 5636 with a possible attempt at breaking the Aug 2014 highs unless 5636 provides some resistance.
If the down move is to restart the moves could come quick. We would first like to see 5524 and 5505 broken with strong momentum followed by solid long down bar breaks past the area between 5463 – 48 followed by a strong push past 5392 before reaching 5367.
EUROPE
DAX – 9272 ( – 59 or – 0.63% )
An Interesting week for the DAX as we saw an early slowdown before a solid long up bar push through a key level of 9403. But once reached it came back down very quickly. With Bearish Divergence Forming and a strong reversal bar on Friday, can this become the lower high? Caution should be observed. We now see the DAX stuck between 2 key FICM levels, 9403 (upside) and 9202 – 9164 (Downside). Therefore our comments remain the same with a slight adjustment to the downside levels.
For the up move to continue this week we would like to see a strong push up past the key FICM level of 9403 followed by strong long up bars through 9470 reaching 9581. This level will then need to be broken with strong momentum before the DAX finds potential resistance at either 9673 or 9745.
If the DAX has stretched itself too thin then a move lower could start early with a break past a key FICM area between 9202 – 9164. 9164 will then become important as we would like to see a strong break and close past this level before reaching 9123 and possibly 8961.
US
S&P – 2030 ( + 16 or + 0.79% )
“If anyone is brave enough to get in front of this market, then please be my guest.” Even though this is the case, we also feel something out of left field can topple this move very quickly so caution should be observed as it has closed below the Standard Deviation Channel.
For the up move to continue we would like to see 2023 hold as a strong level of support before an attempt is made at reaching 2057. Once this level is broken with strong momentum we could see the Index near 2088 (this might take a few weeks though).
For the down move to restart we would like to see a strong break and close below 2023 and 2010. Once this occurs then another break below 2000 could see it near 1981 very quickly.
FOREX
AUD.USD – 8634 ( – 161 or – 1.83% )
The AUD has broken through 8660 like a hot knife through butter. Its now all up to the USD and how much stronger it can get. The AUD has nothing to offer.
For the up move to restart we would like to see a strong long solid up bar break through the 8660 (key level) before an attempt at pushing higher is made. Once this achieved the AUD might reach 8774.
For a continued down move to occur we would like to see 8660 become a solid level of resistance. Once this occurs then we could see 8563 and 8461 very quickly. Once these levels are broken 8378 could be seen.
EUR.USD – 12454 ( – 70 or – 0.56% )
“It’s factored in”. or is it? Lets define this for a second.
The ECB is contemplating QE or is it?
At the moment the markets are undecided if Mario Draghi is all talk and no action. Remember he did this before and the EUR fell away and then rallied when no action was taken.
So, Mario will need to act before further significant drops in the EUR occur.
Interesting article about this can be read here.
For an up move to occur we would like to see an early break past 12491 and as mentioned last week, If the EUR is to have any chance for an upmove then we would like to see an early break and close past 12608 reaching 12764. This will then be an important level moving forward.
For the down move to take full effect and continue we would like to see 12491 become a strong resistance level before further breaks past 12369 and 12258 occur which could lead the pair down near 12048.
GBP.USD – 15869 ( – 127 or – 0.79% )
There is really not much more for some of the FX pairs to do, just watch for USD strength and or weakness.
For the GBP to move higher we would like to see a solid break and close back above 15988 before attempting to break through 16109 and 16148. This could then lead the pair to reach 16299.
If the GBP is to continue lower then we would like to see 15888 become a strong level of resistance before strong moves lower past 15723 occur. Once this occurs then 15674 could be reached on its way down to 15522.
USD.JPY – 11462 ( + 228 or + 2.03% )
The USD just kept on going up this week pushing the JPY above 115. The question we face as traders this week is will it continue or has it moved too far too quickly.
For the up move to continue then we would like to see an early break and close past the highs of last week – 11558. If this level is broken with strong momentum then we could see the pair near 11813 over the next few weeks.
If the USDJPY has over extended its move and we see a move back down then we will be watching 11376 very closely. A strong break below this level could be Interesting. We will watch to see if buyers come in strong or they just disappear. One to watch closely.
COMMODITIES
GOLD – 1177 ( + 4 or + 0.34% )
Even though GOLD fell to new lows, something still doesn’t feel right.
“One thing to note is that if the central banks are throwing all this money at the markets then there must be serious underlying issues that they are either ‘forgetting’ or neglecting’ to tell us (the rest of the world). This is concerning.”
The strong rally on Friday shows the market that maybe its time for it to go back to normal.
By this we mean, a miss on job numbers is Bad for the economy (slow/no growth).
As GOLD has only closed 4 points higher our comments from last week remain the same.
For the upward move to restart we would like to see an early break and close back up past 1180. This could then lead GOLD to break back above 1200 reaching 1208.
If the equity market continue to rally and GOLD continues lower then a strong break back down past 1167 could lead it towards 1149. If the downward momentum is strong then 1103 and possibly 1091 could be seen.
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