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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5358
The ASX repeated the previous weeks move starting lower but then regaining its losses towards the end of week. The previous week it fell short by about 40 points and this week it was 45 points. We also saw the downside range of 5286 met with a low of 5279.
For the up move to restart, we would like to see 5368 broken early in the week which could lead to 5424. A solid break past 5424 could then see the ASX complete the range with 5488 being reached. This would bring the ASX to the bottom of the medium term Standard Deviation Channel.
If the ASX is to repeat the pattern of the past two weeks and for a down move to start, we would like to see 5352 broken early in the week followed by a solid break with long down bars past the 5288 – 76 area. Once this occurs then 5201 could be seen. If this level is broken then the ASX might find support near 5144 – 26.
EUROPE
FTSE – 6680
The FTSE moved sideways last week and we will be holding on to last week’s comments with a slight price adjustment on the up move. We will be watching 6657 for a break down and 6740 for a break up.
For the upmove to restart, we would like to see an early break past 6715 followed by strong long up bars breaking through and closing above 6740. If this is achieved and the momentum is strong then the area between 6784 – 6817 may be tested next.
For the down move to continue we would like to see a solid break and close past 6657. If this is done convincingly then 6609 could be the next level, and if 6609 is broken then possibly 6562. If the downward move is strong and continues past this area, we could see 6450 – 32 reached, which would complete the range set in August.
DAX – 9211
The DAX is creating new highs but doing so ever so cautiously. Trade View has been monitoring the DAX very closely for early signs of a breakout move. In the past when the DAX makes its move it does so in a flury.
With the S&P and the DAX both at new all time highs, we will be sticking with the previous week’s comments. If we see a strong break with continuous 100+ days then 9411 will be the completion of the new range.
If the DAX cannot continue higher and it takes a breather, then we would like to see solid break back down past 9117 early in the week. This will lead the way to 9076 being reached, and if this level is broken we could see 9001 reached, which is a new level created by our proprietary indicator FICM. If we don’t support at this level and the moves are strong then the area between 8894 – 70 will be watched closely.
US
S&P – 1802
The S&P entered new territory reaching an all time high of 1804. The big question now is how will policy makers handle this as any sudden or unexpected announcements could derail this positive sentiment.
As we are at new all time highs and have broken the previous range we will be looking for a solid break up early in the week to see if the momentum continues. If so, then the 1845 – 48 area will be the next target which will complete the medium term range that was set back in August and September. We will revise if this area is met and provide further analysis of the S&P in our member’s area. Contact us about becoming a member.
If we have seen the highs for the S&P and a new down move starts, then we would like to see a solid move past both 1780 and 1771 before reaching 1740. If this occurs and the momentum is strong we will revise downside targets.
NASDAQ – 3419
The NASDAQ started last week lower and then bounced back to close flat for the week.
If we are to see a new upmove form, then we would like to see a solid break and close past 3443 early in the week, and if so we could see 3457 reached. Once this level is broken we will revise any further upper targets.
If the NASDAQ cannot break 3443 and heads back down, then we would like to see a strong break past 3384 – 70 area before the 3329 – 26 area is reached which could slow down the move briefly.
FOREX
AUD.USD – 9165
The AUD was out of favour last week with a solid 200 point move down. On the chart in our member’s area you will notice a new range was formed and completed. We are also potentially at the start of a new downward cycle.
For a new upmove to restart we would like to see a solid break past 9295 and 9325 early in the week. Once this occurs we could see 9400 being reached. If this is broken we could see the AUD near 9491 where it might find some resistance.
If the downtrend continues, then a break past 9083 could lead the way to 9011. Once this level is broken we could see the AUD at 8924 and the formation of a potential bigger move down could start.
EUR.USD – 13557
The EUR is continuing to defy the trend and is moving higher even though policy makers are trying very hard to keep it lower.
If the EUR continues its move higher, then we would like to see an early break past 13564 before a push towards 13653 is achieved. If the upward momentum continues and is strong then 13697 could be reached. If we are to then see 13742 – 52 area reached then we need to see long solid up bars breakthrough 13697.
If the USD continues its strength and Draghi drops rates below zero then a solid break past 13515 could lead the way down to 13469 and 13433. A strong break past 13433 would lead the way to 13397 being tested.
GBP.USD – 16229
As mentioned last week, The GBP continues to find strength against the USD. The idea of continued Fed stimulus is helping. If there is an overpriced calculation in these pairs then a stronger than normal move by the USD could see some serious volatility in these markets.
If the GBP continues to higher, We could see another break up could if 16260 is broken with long up bars, which could lead the pair towards 16379. If this area is also broken with long solid up bars then 16427 will be its next test.
For the down move to restart then a break back below 16112 could see 16028. If this level does not provide any support and we see a long solid bar break it then 15844 could be seen.
USD.JPY – 101.17
Last week we saw the USD 100 level being tested with a dip back below. But his was short lived as the USD strengthened and the next break we saw was strong and full of momentum. We saw 100.52 broken and the pair reached a high of 101.35 which was only 5 points from our mid range target of 101.40 mentioned in last weeks brief.
If last week’s move is the start of a new prolonged rally then we would first like to see 102.51 broken with long solid up bars. Prior to this, the two levels that we will be watching are 101.98 and 102.32. If 102.51 is broken with long solid up bars then we could see the highs of May – 103.73 tested.
If we are to see a restart of a down move then the first level we would like to see broken is 100.52 – 22 area. Once this is done then we could see a move past 99.99 which could lead the way to 99.14. Any support below this could form near 98.81 – 64 area.
COMMODITIES
GOLD – 1242
GOLD is finding it difficult to find any upward momentum, and last week we saw it break back into the long term downward Standard Deviation Channel. Another thing to note is that it is approximately half way through the FICM short term downward process.
If GOLD is to have any chance of moving higher then we need to see a strong break past 1265 – 68 area before we could see 1282. Once 1282 is broken then 1320 could be seen. 1320 then needs to be broken with long solid up bars before we see 1391.
If the down move continues then a solid break past 1210 early in the week could lead the way to GOLD dipping below 1200 again and reaching 1179. If this too is broken then 1137 would complete the downward range.
US LIGHT CRUDE OIL – 94.79
OIL has settled for the time being and made a late move to close above 94.55 which was the upper level we mentioned last week.
For OIL to move higher and possibly restart a new uptrend then we would like to see 9455 hold as a solid level of support before be see an early break past 9564. Once this is broken with solid upward momentum then we could see 9656 reached and eventually 9744.
If the down move is to restart then a solid break back down past both 94.55 and 93.44 could see 92.51 tested once again and if broken this could lead to 91.46. If this level cannot hold the down move then 90.19 could be tested next.
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