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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.
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INDICES
AUSTRALASIA
ASX – 6023 ( +124 or +2.1% )
The ASX continues its rally higher having closed above 6000; and is now at a very key level. We will be discussing this in more detail in the MEMBER PORTAL.
VOLATILITY ALERTS:
Thu 11:30 – Private Capex Expenditure (quarterly)
For a continued move higher we must now see the ASX break and close above 6070. Should this occur we will look for this market to re-test 6140, and a break above this level could see a quick move to 6175. A strong break above this level however could see a move into 6250 and 6315 by the week’s end.
If the ASX cannot close above 6070, we will look for a move back down into 6000. A break below this level is likely to see a retest of 5986 and further downside may result in a sharp move lower into 5921.
EUROPE
DAX – 12543 ( +57 or +0.46% )
In trying to gain some upside momentum, the DAX is also at a key inflection point and this week sets up to be an interesting week early.
VOLATILITY ALERTS:
Tue 00:00 – German Prelim CPI (monthly)
Tue 01:00 – ECB President Draghi Speaks
Tue 21:00 – German Buba President Weidmann Speaks
Fri 18:00 – German Retail Sales (monthly)
For a continued move to the upside we must see the DAX close above 12714. A strong break of this level could see the DAX rally quickly to 12783; and if momentum is very strong we will look for a move to 12921 and the all important 13050 level.
If the DAX fails to close above 12714, we will look for a move back down to 12384 before a slight pause. If momentum is very strong to the downside we cannot rule out a sharp collapse back down into 12198.
US
SP500 – 2746 ( +10 or +0.37% )
The S&P continues to lead global equities higher. We will be discussing the impact of this in the LIVE CHAT ROOM this week.
NOTE: Monday is a public holiday in the US (Presidents Day)
VOLATILITY ALERTS:
Wed 00:30 – Core Durable Goods Orders (monthly)
Wed 00:30 – FED chair Powell Testifies
Wed 02:00 – CB Consumer Confidence
Thu 00:30 – Prelim GDP (quarterly)
Thu 01:45 – Chicago PMI
Thu 02:00 – Pending Home Sales (monthly)
Fri 02:00 – FED chair Powell Testifies
Fri 02:00 – ISM Manufacturing PMI
For a move higher we would like to see the S&P close above 2750, on its way to test 2808. A break above 2808 could see a quick move to 2824 however should this market break this level, we could see a sharp move higher to retest 2848.
If we cannot hold above 2750, we will look for a move back down to 2722. A strong break and close below this level could then see this market move back down to 2688 by the week’s end; and if the sell-off continues a move quickly into 2628. If momentum is very strong to the downside we cannot rule out a move to 2588.
FOREX
AUD/USD – 0.7839 ( -73 or -0.92% )
The Aussie Dollar remains range bound and the question now is- can this market continue to move higher?
VOLATILITY ALERTS:
Thu 11:30 – Private Capex Expenditure (quarterly)
For a move higher we must now see this market close above 0.7903, followed by a strong break and close above 0.7934. Should this occur we will look for this market to test 0.7988. A strong break and close above 0.7988 could see this market post further gains into 0.8034.
If we cannot close above 0.7903, we could see the AUD retest 0.7833. Should we break lower however, we will look for a move back into 0.7779 and if downside momentum continues we could see 0.7729 quickly before another pause.
EUR/USD – 1.2295 ( -115 or -0.93% )
Like other markets the EURO also continues through it’s sideways consolidation. We will discuss this market in more detail in the LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Tue 01:00 – ECB President Draghi Speaks
Wed 21:00 – CPI Flash Estimate
For a sustained move higher we would like to see the EURO hold above 1.2165 followed by a strong push into 1.2266. Should this occur, we will then look for this market to test 1.2358; and if momentum is very strong we could see a push higher into 1.2420.
If the EURO cannot hold above 1.2165, we could see a move back down 1.2040 before a pause. This is an important level and any subsequent strong break and close below this level may see the EURO sell-off further into 1.1929 this week.
GBP/USD – 1.3969 ( -56 or -0.4% )
The Pound has spent the majority of last week fading into our key 1.3875 level and as such our levels remain unchanged.
VOLATILITY ALERTS:
Thu 20:30 – Manufacturing PMI
Fri 20:30 – Construction PMI
Fri 21:00 – BoE Governor Carney Speaks
Fri TBC – UK PM Theresa May Speaks
For a move to the upside we would like to see a strong break and close above 1.4075 A break above this level may result in moves into 1.4194, 1.4223 and 1.4259 before a pause. If we see a complete V-Reversal the GBP could rally all the way back into 1.4469.
On the downside, a strong break and close below 1.3853 could see a quick move down into 1.3743 – 1.3725 before a pause. If momentum to the downside continues we may see moves into 1.3683 and 1.3654. A strong break below these levels could see cable trade down to 1.3510.
USD/JPY – 106.84 ( +55 or +0.52% )
The $/YEN is becoming very interesting. Can the buyers take hold of this market or will we see a significant move lower? We will be discussing this market in more detail in the LIVE CHAT ROOM.
VOLATILITY ALERTS:
Tue 16:00 – BoJ Core CPI (annual)
For a continued move to the upside we would now like to see the market hold above 106.30 and close above 107.75. Should this occur we will then be looking for a move into 108.31. A strong break and close above 109.21 could then see a quick move into 109.94 before a pause. If we are to see a complete V-reversal and fade to the upside this week, we will not rule out a move to 111.09 by the end of the week.
If however the USD/JPY cannot hold above 106.30, we will look for a retest of 105.79. A break below this level could see the USD/JPY trade quickly down to 104.97 before a potential pause. Should we continue to trade lower and see continued downside pressure on the USD/JPY- a sharp move to 103.99 is possible.
COMMODITIES
GOLD – 1328 ( -19 or -1.41% )
GOLD continues to trade inside a sideways range and this is setting up plenty of clues for future price action.
For a continued move higher we must now see this market break and close above 1333. Should this occur we will look for a move into 1355, and a close above this level could see further upside into 1365. If momentum remains very strong, a very strong move into 1374.
If Gold cannot close above 1333, we will look for a strong move back down into 1322. A strong break below this level could see GOLD sell off further into 1303, and if momentum is strong to the downside we could see a sharp move down into 1294.
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