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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 Light Net Long.
AUSTRALASIA
ASX – 5459 ( – 85 or – 1.53% )
The ASX fell away last week after a very strong rally over the past month. One thing to note is that the ASX has closed between our FICM levels of 5463 – 48. They key to next weeks move will be based on an early break either way.
For the up move to restart we need to see a strong early break and close above 5463 followed by a continued break past 5505 reaching 5524. If the upward momentum is strong then 5595 will play an important role as this again will be near the longer term trend line area discussed last week.
For the down move to continue we would like to see a strong long down bar break and close below 5448. This could then lead the ASX towards 5392 eventually reaching 5367. One this level is reached and broken with strong momentum 5270 will not be too far away.
EUROPE
DAX – 9235 ( – 37 or – 0.40% )
Another Interesting week for the DAX as we saw 2 FICM levels play ping pong with each other (9403 – 9164) The DAX reached a high of 9399.8 and a low of 9167.3. As mentioned last week “We now see the DAX stuck between 2 key FICM levels, 9403 (upside) and 9202 – 9164 (Downside).” Therefore once again our comments remain the same.
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 – 2041 ( + 11 or + 0.54% )
The S&P is trying to do the Slow Grind up, as it did for most of 2014. The big question we have does it have enough to continue as Divergence is forming to the downside.. We will however keep comments from last week as we feel they are still relevant. “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.
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 – 8745 ( + 111 or + 1.29% )
The AUD moved higher last week reaching a high of 8773 which was only 1 point lower than our level of 8774. Even though this occurred we still feel the AUD has nothing to offer.
For the up move to restart we would like to see 8774 (key level) broken early in the week and then hold as a strong level of support before a push higher past 8823 is made which could potentially reach 8971.
Another move down by the AUD will need to break the key level of 8660 before we could see 8563 again following on to 8461 very quickly. Once these levels are broken 8378 could be seen.
EUR.USD – 12524 ( + 70 or + 0.56% )
After a tame week early by the EUR, Friday’s 150 point bounce could be interesting this week. Will the Markets test the ECB? or will Mario Draghi bluff his way out of this one for a while.
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 – 70 area. This will then be an important level moving forward.
For the down move to take full effect and continue we would like to see an early break past 12491 again followed by further breaks past 12369 and 12258 which could lead the pair down near 12048.
GBP.USD – 15668 ( – 201 or – 1.27% )
It seems like the markets are starting to believe that the US will raise rates before the BOE.
For the GBP to move higher we would like to see a solid break and close back above 15723 followed by a strong move towards 15844. If the upward momentum is strong then 15988 could be reached where we might see some resistance forming.
If the GBP is to continue lower and breaks back down into the Standard Deviation Channel then we would like to see a long down bar break and close past 15522. If the downward momentum is strong then 15386 could be seen quickly.
USD.JPY – 11628 ( + 166 or + 1.45% )
“The USD just keeps on going and going and going”
If we see continued strength this week we could see this pair near 11813. If this level is broken we will discuss further in our LIVE CHAT ROOM.
If the USDJPY has over extended its move and we see a move back down below the Standard Deviation Channel (11558) we could see a quick drop down towards 11376. As mentioned last week “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 – 1188 ( + 11 or + 0.93% )
A bit of Volatility in GOLD last week saw another late Friday 40 point move. This might be the norm until GOLD finds its new calling. “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.”
For the upward move to restart we would like to see 1180 hold as a strong level of support before a bounce and rally towards 1200 is made reaching 1208. Level we will be watching above 1208 for any potential resistance are 1216, 1226 and 1241.
If the equity market continue to rally and GOLD continues lower then we would like to see another strong break back below 1180 before reaching 1167 which could then lead it towards 1149. If the downward momentum is strong then 1103 and possibly 1091 could be seen.
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