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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5002
The ASX hasn’t kept up with the previous week’s rally and is now in a potential slowdown process.
If we are to see a continuation of an up move then 4985 needs to hold as solid support before a move towards 5085 and 5126 can be achieved.
If a down move is to start then 4985 needs to be broken on the way down before reaching 4953 and possibly 4923 and 4903.
EUROPE
FTSE – 6625
The FTSE stayed above an important level of 6536 last week, but only managed to gain 100 points from last week’s close.
If we are to see the up move continue then we need to see an early break above 6699 before attempting to break through 6739 and heading towards the all time highs again.
If a move down is to play out then we need to see 6536 broken early followed by 6439, and if we see solid downward momentum then we could be back near the 6306 level quickly.
DAX – 8345
The DAX made another attempt at a rally but is now facing a potential slowdown process as it has closed near an important level of 8352.
If the move up is to continue then a solid break past 8352 needs to be made early which will then lead the DAX towards all time highs.
If the slowdown process takes full effect and 8352 becomes a solid level of resistance, then a move back could reach both 8212 and then 8106. If downward momentum is strong then a dip below 8000 is possible.
US
S&P – 1694
The S&P made an important move past its all time highs closing just 7 points higher.
If we are to see a continuation of the up move then a solid move needs to occur early in the week as the current range is coming close to it previous range. The upper level we are looking for is 1710.
If the highs can not hold and a down move plays out then 1687 needs to break early with solid downward momentum which could lead a move towards 1667 and 1647.
NASDAQ – 3050
The NASDAQ showed a sign of weakness last week by not being able to continue with its solid up move. It’s interesting to note that it closed below its May highs of 3053, and typically when this occurs it’s a sign of a possible correction.
If this up move does continue we would like to see the current level hold as support before seeing an extension to 3079 then 3145 which would complete the range set back in April to May.
If a down move is to commence then 3027 will be an important level to watch, and if broken with strong long down bars then we could see 2962 and 2938 very quickly.
FOREX
AUD.USD – 9170
The AUD attempted to rally early last but was halted by the upper line of the standard deviation channel and then moved back down again. Even though the pattern forming is one of potential reversal.
If the AUD is now preparing for a potential reversal then we would first like to see a solid break past the upper standard deviation channel line which is now sitting around 9219. Once this level is broken we would need to see a solid move through 9332 and up toward 9455 which will play an important role.
If the continuation of this down move is to occur and another break below 9000 is made with solid momentum then we could be looking at 8780 as the next level.
EUR.USD – 13141
Last week the EUR got stuck within a 150 point range and is now sitting in between 13084 and 13177.
If we are to see a move up then 13177 needs to be broken early followed by a solid break past 13207 before targeting 13285.
If there is a break on the downside then 13084 needs to be the first level followed by 13001. If 13001 is also broken with strong momentum then we could see 12837 level reached.
GBP.USD – 15259
The GBP’s new rally continued last week and broke past and closed above 15184.
If the upmove is to continue then an early break past 15282 could see Cable reach 15380 with strength.
If a new down move starts then we would like to see 15184 broken and 15118 reached early in the move. If these two levels are reached with solid downward momentum the 15006 could be the next target.
USD.JPY – 100.59
The USDJPY regained composure last week to form a new rally past 100. Even though this move has closed above 100 it is important to note that the world economy is in a climate of slowdowns.
If the up move is to continue then we need to see a solid break past 101.22 before reaching 102.52 or possibly extending to 102.89.
If the world markets take a turn for the worst and YEN strength comes back, then we would like to see 9977 broken with long solid bars just like the move on 10th July. If this occurs then we could see a strong move down towards 9863. If 9863 is broken the levels we will be watching closely are 9755 and 9508.
COMMODITIES
GOLD – 1295
GOLD is trying to decide the next direction as its sideways moves are starting to take place.
If we are to see another aggressive down move then a break below 1270 could be the trigger for GOLD to dip below 1200 again.
If an up move is to start 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 1346.
US LIGHT CRUDE OIL – 108.20
LIGHT CRUDE made moves on the upside last week and showed no signs of slowing down. It is now only 200 points from the March 2012 highs.
If the current up move is to continue then a solid move needs to occur early in the week which could see 110 broken and with a possible extension to 116.97.
If a down move is to start then a break below 10653 needs to occur, and if it has momentum then 10366 could be reached.
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