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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5917 ( -106 or -1.76% )
The ASX gave back some gains last week as sellers returned to the market. We will be discussing this in more detail in the MEMBER PORTAL.
VOLATILITY ALERTS:
Mon 11:30 – Building Approvals
Tue 11:30 – Current Account
Tue 11:30 – Retail Sales
Tue 14:30 – RBA Interest Rate Announcement
Wed 08:35 – RBA Gov Lowe Speaks
Wed 11:30 – GDP (quarterly)
Thu 11:30 – Trade Balance
For a continued move higher we must now see the ASX close above 5921. Should this occur we will look for a move to 5985. A break through this level could see a retest of 6000; and if momentum is very strong we cannot rule out a move to 6140.
If the ASX cannot close above 5921, we will look for a move back down to 5823. A strong break and close below this level could see the ASX test 5777, and if momentum is strong we could quickly see further moves down to 5746 and 5705.
EUROPE
DAX – 12003 ( -540 or -4.31% )
The DAX is testing a very key area again now and if this market cannot find support this week WATCH OUT BELOW!
VOLATILITY ALERTS:
Thu 11:45 – ECB Interest Rate Announcement – LIVE TV
Fri 12:30 – ECB Press Conference – LIVE TV
For a continued move to the upside we must now see the DAX close above 12115. Should this occur we will look for a move back up to 12384. A strong break of this level could then see the DAX rally quickly to 12566; and if momentum to the upside is very strong we cannot rule out a move to 12714.
If the DAX fails to close above 12115, we will look for a move down to 11875. Below this we have key support between 11790 – 11755. However should these levels break be prepared for a potentially strong move down into 11519.
US
SP500 – 2689 ( -57 or -2.08% )
The S&P continues to lead global equities higher. We will be discussing the impact of this in the LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Tue 02:00 – ISM Non-Manufacturing PMI
Sat 00:30 – Non Farm Unemployment Report – LIVE TV
For a move higher we would like to see the S&P close hold above 2638. Should this occur we will look for a move back up into 2660. A strong break and close above this level could see the S&P rally quickly to 2680, and if momentum remains strong to the upside we cannot rule out moves to 2720 and 2736.
If we cannot hold above 2638, we could see this market continue to sell-off into 2590 before a pause. A break below this level however could mean this market retraces lower into 2562; and a close below this level may see a retest of 2540. If the S&P closes below 2540 watch out- we could see a very sharp move into 2511 by the week’s end.
FOREX
AUD/USD – 0.7763 ( -76 or -0.97% )
The Aussie Dollar is also testing a very key area here. Will we see some surprises this week? We will discuss this market extensively in the LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Mon 11:30 – Building Approvals
Tue 11:30 – Current Account
Tue 11:30 – Retail Sales
Tue 14:30 – RBA Interest Rate Announcement
Wed 08:35 – RBA Gov Lowe Speaks
Wed 11:30 – GDP (quarterly)
Thu 11:30 – Trade Balance
For a move higher we must now see this market close above 0.7779, followed by a strong break and close above 0.7833. Should this occur we will look for this market to retest 0.7903. A strong break and close above 0.7903 could see this market post further gains into 0.7988 by the week’s end.
If we cannot close above 0.7779, we are likely to see a move lower into 0.7729. Should the downside momentum continue we could see 0.7662 quickly before another pause; and if selling pressure is strong a move into 0.7600 cannot be ruled out.
EUR/USD – 1.2320 ( +25 or +0.2% )
The EURO continues to remain in a sideways consolidation and we are on the lookout for a breakout very soon.
VOLATILITY ALERTS:
Sun All Day – Italian Elections
Thu 11:45 – ECB Interest Rate Announcement – LIVE TV
Fri 12:30 – ECB Press Conference – LIVE TV
For a sustained move higher we would like to see the EURO hold above 1.2266 followed by a strong break through 1.2360. Should this occur, we will then look for this market to test 1.2420; and if momentum is very strong we could see a push higher into 1.2520.
If the EURO cannot close above 1.2266, we could see a move back down 1.2165 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 1.2042 this week.
GBP/USD – 1.3798 ( -171 or -1.22% )
Theresa May’s Brexit speech on Friday barely moved this market; and so like the EURO, we are also on alert for a breakout here.
VOLATILITY ALERTS:
Mon 20:30 – Services PMI
Wed 19:30 – Halifax HPI (monthly)
Fri 20:30 – Manufacturing Production (monthly)
For a move to the upside we would like to see a strong break and close above 1.3875 A break above this level may result in moves into 1.4075 and 1.4194. Should momentum remain strong to the upside, we could see a move into 1.4223 by the week’s end.
If we cannot close above 1.3875 we could see a quick move down into 1.3743 – 1.3725 before a pause. A continued sell-off may see another move lower into 1.3683 and 1.3654, with a strong break below these levels meaning cable may trade down into 1.3534. If momentum continues to remain strong, we could see a sharp decline to 1.3277.
USD/JPY – 105.71 ( -113 or -1.06% )
The $/YEN is again at a very big level. Last week we said this market was interesting, this week it is even moreso! We will be discussing this market in more detail in the LIVE CHAT ROOM.
VOLATILITY ALERTS:
Wed 16:00 – Leading Indicators
Fri 12:30 – BoJ Interest Rate Announcement
For a continued move to the upside we would now like to see the market close 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 and fails at 105.79, a break below 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 – 1322 ( -6 or -0.45% )
GOLD sold off early in the week but found some buyers at our key 1303 level. Can we see further upside this week…?.
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 last week’s close at 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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