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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 4985
The ASX produced a solid rally last week breaking through two important levels of 4903 and 4985.
If we are to see a continuation of this up move then 4985 needs to provide support before we can see 5126 again.
If a down move is to start then 4903 needs to be broken before 4840 is reached, and if 4840 does not provide support then 4719 could be the next level reached.
EUROPE
FTSE – 6546
The FTSE continued its move up last week and now FICM is indicating a potential slowdown process of the current move.
If we are to see the up move continue then an early break past 6572 could see 6739 reached but only if it is accompanied by strong momentum.
If the slowdown process takes effect then a move back down past 6438 could see 6390 followed by 6306.
DAX – 8204
The DAX joined in on the rallies last week and moved past two important levels of 8008 and 8106 with solid momentum.
If the move up is to continue then a solid break past 8294 and 8352 needs to be made early in the week if any attempt at the May highs is made.
If the DAX cannot break past 8294 and instead breaks back down past 8106 then we could dip below 8000.
US
S&P – 1675
The S&P made its long awaited move to lead the world markets into a rally and is now only 12 points of the May highs.
If this upmove is to continue into this week then it needs to do so with strength and early in the week. A break past Mays high of 1687 needs to occur otherwise this market could come down quickly again. If the highs are broken with solid momentum then the our next target is 1710.
If 1687 proves to be too difficult to break then a move back down could see 1648 and 1638 play important roles. If these two levels are broken with strong downward momentum 1600 is our next target.
NASDAQ – 3069
The NASDAQ has taken another important step towards leading the world market’s rally by breaking and closing above its May highs of 3053.
If this up move is to continue we would like to see 3053 hold as solid support before seeing an extension to 3145. For this to occur a solid move needs to take place early in the week with strong momentum.
If a down move takes place and a break below 3053 occurs with strong momentum then 2995 could be reached followed by 2938.
FOREX
AUD.USD – 9046
The AUD attempted to rally early last week reaching our upper target of 9272, but could not continue the momentum which lead to a move back down seeing the big figure changing from 9 to 8 to reach a low of 8998.
If the continuation of this down move is to occur and a break below 9000 is made with solid momentum then we could be looking at 8780 as the next level.
If AUD buyers decide to come back into the market then a break above 9152 could see 9242 and if there is any momentum 9332 will become our upper target.
EUR.USD – 13065
The EUR down move found solid support at 12770, and what followed after was a 400+ point rally reaching a high point of 13206
If a this move up is to continue then we would like to see strong breaks above 13084 which could see 13106 followed by 13177 reached again.
If the down move is to occur then another solid move past 13000 could see a move down to 12971 followed by 12837 and 12770.
GBP.USD – 15103
The GBP’s down move was short lived as the March lows provided enough technical support for the bounce towards the 15184 area.
If the longer term down move continues then we would like to see 15184 become a solid resistance level which could then lead a move down past 15006 with solid momentum.
If the upmove is to continue then 15184 needs to be broken early this week followed by a break past 15282. If the move carries strength then we could see 15380.
USD.JPY – 9917
The USDJPY rally came to a bit of a halt mid last week, even though the equity markets rallied the YEN seemed to strengthen. So is this a sign that smart money is moving into the YEN before the equity markets take another move down?
If the up move is to continue then we need to see 9864 hold as solid support, and a move past 9989 needs to occur early in the week week before another attempt at breaking and staying above the almighty 100 level.
If a reversal is to take place then a break below 9864 needs to occur with momentum, and if this does occur then 9756-9716 could be the difference between support and a fall to 9508.
COMMODITIES
GOLD – 1285
GOLD made another attempt at a rally last week and this time it was successful breaking past the short term resistance level of 1265.
If the down move is to continue this week in the same fashion as last week, then no downside targets will be attempted.
If last week’s GOLD buyers are reading this report, then we still need to see a break past 1321 before a new attempt at an up move is made. Our next upper level is 1391.
US LIGHT CRUDE OIL – 106.11
LIGHT CRUDE made solid moves up past 105.80 showing that it has some good strength.
If the current up move is to continue and reach March 2012 highs then a solid upmove needs to occur early this week with long up bars otherwise the slowdown process could take effect.
If the slowdown process takes full effect and a down move starts then we would like to see 103.56 broken before reaching 101.81 and possibly a potential fall below 100.
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