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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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. Currently Trade View is Net Short.
AUSTRALASIA
ASX – 5506 ( +23 or +0.42% )
The ASX moved slightly higher last week to close another 20 odd points higher. Even though the ASX is still range bound we saw another bounce off one of our FICM levels, this time it was 5367. We sound like a broken record but there is no real point in looking at too many new levels until the range breaks.
For the up move to continue then we would like to see a break back past 5562 with a long up bar. If the momentum is strong when it breaks through 5562 and the rest of the world markets rally then we could see a further push higher towards 5732. As mentioned previously, this would need to be based on strong momentum.
If the down move restarts then we would like to see an early break back down past 5447 followed by an all important break and close through 5424 with a long solid down bar. Once this level is broken then we could see temporary support near 5367. If this level does not provide support and is broken with a long down bar then 5270 could be seen with a possible extension down to 5201.
EUROPE
FTSE – 6811 ( -54 or – 0.79% )
The FTSE took a breather after a few weeks of good solid rallies falling below the all important 6848 level.
For the up move to continue we would like to see another strong break and close past 6848 which then needs to become a strong level of support before another push higher is made. Once this occurs we would like to see a strong upward momentum break past 6878 and possibly 6904. This will then complete the range set back in OCT 2013. Once this level is broken we will discuss further in our LIVE CHAT ROOM.
For a down move to restart we would like to see 6848 hold as a solid level of resistance before a break and close below 6791 occurs. This will then lead the FTSE towards 6723. If the downward momentum is strong and 6723 is broken with a long down bar then 6632 could provide some level of support.
DAX – 9770 ( +134 or + 1.39% )
The DAX moved higher once again but this time with more poise to close 100+ points higher.
For the upmove to continue then the DAX will need to break and close above the all time highs of 9811. This will need strong upward momentum before a serious push towards the magical 10,000 mark is made.
If the down move restarts we would like to see a strong early break past 9671 before reaching 9543. If this is also broken with strong downward momentum we could the DAX back down near 9402 which was a strong level of support many times over the past few months.
US
S&P – 1900 ( + 22 or + 1.17% )
The S&P has reached the 1900 mark once again with another strong rally based on:
Low Volume, Continued China Contraction, Big players getting nervous, Jobless claims higher than expected.
For the S&P to break higher we would be monitoring 1915. Once this level is broken we will discuss in our LIVE CHAT ROOM.
For the down move to start we would like to see an early break past 1882 – 76 followed by strong downward momentum reaching 1854.
FOREX
AUD.USD – 9230 ( – 130 or – 1.39% )
Last week saw the USD strength across the board, this caused the AUD to fall by over 1%, but still keeping it within the range between 92 and 94.
For another move higher to occur we would like to see an early break and close back above 9286. Once this is achieved 9309 and 9386 are next in line.If the upward momentum is strong then 9423 could be seen which might be the first level of resistance on the way up.
If the USD continues to find strength and AUD restarts its short term downward move, we would like to see 9206 and 9176 broken early with a long solid down bar before reaching 9078.
EUR.USD – 13632 ( – 61 or – 0.45% )
The EUR is now trading on ‘open mouth’ fundamentals. Basically Mario Draghi must act otherwise the markets will punish the EUROZONE.
For the up move to continue we would like to see an early break past 13725 followed by a solid break and close above 13812 leading to further breaks past 13868.
For the EUR to continue last weeks down move then we would like to see an early break past the 13594. Once this occurs we could see the area near 13482 – 72 reached.
GBP.USD – 16830 ( + 20 or + 0.12% )
The GBP moved slightly higher even though the USD strengthen across other currencies. Even so, the move was not significant enough for us to change our comments from last week.
If the GBP finds a way to restart its move higher then we would like to see a solid break past 16864 and 16902. Once this occurs we could see another test towards 17000. For this level to then hold we need to see a break and close above 17000 with a long solid up bar.
If the slow and steady down move continues then we would like to see 16791 broken early reaching 16749. If the momentum is strong this could lead the pair to reach 16659. Further breaks past 16659 could see 16537.
USD.JPY – 10191 ( – 42 or – 0.41% )
Another timid move early last week but then USD strength came in and we saw a rebound higher by 0.4%. Once again we feel that “If no real market solution is found to the mounting debt for both countries then we could be range bound for a while, either way caution should be taken.”
For the USD to move higher we would like to see an early break past 10216 followed by a strong break above 10252 with a long up bar reaching 10309. If the momentum is strong then we could see an extension towards 10356.
If downward move gains strength we would like to see another strong break and close past 10152 leading the pair to reach 10052. If 10052 is then broken with a long solid down bar we could see 9977.
COMMODITIES
GOLD – 1292 ( – 1 or – 0.08% )
GOLD has had another uneventful week. We therefore keep all of our comments from last week the same. “Continued complacency in the VIX and a lack of safe haven status for GOLD is a concerning market trend at the moment. What this means that if any event occurs then sharp down moves could be aggressive and unforgiving in the equity markets causing the VIX to spike and GOLD to rally.”
For GOLD to move higher from here then we would like to see 1284 hold as a solid level of support followed by a strong break past 1295 – 99 area. Once this occurs we would like to see another break past 1316. If the momentum is strong then we could see 1327 – 34 area reached.
If the down move restarts then we would like to see 1284 broken early in the week with a long down bar. Once this occurs then we could see 1269 tested and if broken with strong momentum then 1246 could be seen.
US LIGHT CRUDE OIL – 104.28 ( + 274 or + 2.70% )
Another strong rally by OIL early in the week helped it close 2.7% higher for the week.
For the upmove to continue then we would like to see 104.03 become a strong area of support helping it to move towards 106.33. If the upward momentum continues strong then 107.33 could be seen followed by a strong push towards 108.94 were resistance could form.
For another down move to restart then we would like to see an early break and close past both 104.03 and 103.49. This could then lead OIL down to 102.29 and possibly 101.28.
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