Market Brief

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Will the ECB surprise at the final meet of the year? With the EURO posting a strong recovery, Can this market continue to rally into year end?

Read below what our desk thinks, and the important levels to watch this week.

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes. For up to the minute market analysis see our live trading room.

INDICES

AUSTRALASIA
ASX – 6680 ( +39 or +0.59%)

The ASX is pushing up against important resistance now and we will look to see if this market can break higher now.

VOLATILITY ALERTS:

Mon 09:00 – RBA Governor Lowe Speaks

For a continued move higher we must now see the ASX hold above 6550. Should this occur, we will look for a move into 6682, and if momentum to the upside is very strong we cannot rule out a move to 6804.

If the ASX cannot hold above 6550, we will look for a move back down to 6500. A strong break and close below this level however could see the ASX retest of 6435, and if downside momentum is very strong, we could see a move down to 6276.

EUROPE
DAX – 13297 ( -66 or -0.49% )

The DAX remains in a sideways range and like other markets, we are on high alert of a breakout. We will be discussing this market this week in the MEMBER PORTAL.

VOLATILITY ALERTS:

Thu 23:45 – ECB Interest Rate Announcement
Fri 00:30 – ECB Press Conference

For a continued move to the upside we must now see the DAX hold above 13266. Should this occur, we will look for a strong move back up into 13520, and if momentum remains strong a push back higher into 13800.

If the DAX fails to hold above 13266, we may see a retest back down into the key level of 13050. A close below this level is likely to see a retest of 12714; however if momentum is very strong to the downside we cannot rule out a move to 12566.

US
SP500 – 3690 ( +51 or +1.4% )

The S&P has posted all-time highs as the US continues to lead global equities.

VOLATILITY ALERTS:

Fri 00:30 – CPI (monthly)
Sat 00:30 – PPI (monthly)

For a move higher we would like to see the S&P hold above 3650. Should this occur, we will look for a move to 3733; and if momentum is very strong we cannot rule out a move to 3780.

If we cannot hold above 3650, we could see this market move lower into 3620. A break of this level however may result in a quick move down to 3560; and if momentum to the downside remains strong we may see a fast move down to 3498.

FOREX

AUD/USD – 0.7426 ( +49 or +0.66% )

The Aussie dollar is maintaining the 0.7400 – 0.7500 area we spoke about last week. We will again be discussing this market this week in the LIVE CHAT ROOM.

VOLATILITY ALERTS:

For a move higher, we would first like to see the AUD hold above 0.7364. Should this occur we will look for a move into 0.7447, and if upside momentum remains very strong we cannot rule out a move to 0.7498 and 0.7550 before a pause.

If the AUD cannot hold above 0.7364, we will look for this market to break lower through 0.7282. A break and close below this level could see a sharp decline into 0.7197; and if momentum to the downside remains strong we cannot rule out a move into 0.7112.

EUR/USD – 1.2120 ( +160 or +1.34% )

The Euro was very strong last week as continued selling in the US dollar has allowed this market to break through the 1.2000 area strongly.

VOLATILITY ALERTS:

Thu 23:45 – ECB Interest Rate Announcement
Fri 00:30 – ECB Press Conference

For a move higher we would like to see the EURO hold above 1.2120. Should this occur we could see a retest of 1.2256. A break of this level could see this market rally further and if momentum is very strong, we would be on the lookout for a move to 1.2300. 

If the EURO cannot hold above 1.2120, we could see a fast move down into 1.2002 before a pause. A strong break of this level may result in a move into 1.1980, however any weakness below this level could see a sharp drop into 1.1925.

GBP/USD – 1.3436 ( +134 or +1.01% )

Cable is still testing its short-term double top area, and this will now be an important test for this market.

VOLATILITY ALERTS:

Tue 20:30 – Final Manufacturing PMI

For a continued move to the upside, we would like to see Cable hold above 1.3410. If this market can hold above this level we may see a strong push into 1.3550 before another pause. A break through this level sets Cable up for a move to 1.3750.

Should we fail to hold above 1.3410, we could see a move back down to 1.3277. A break below this level however could see Cable further depreciate to 1.3161 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3035.

USD/JPY – 104.19 ( +11 or +0.11% )

The YEN was practically unchanged last week and as such our levels remain the same.

For a move to the upside we must now see this market hold above 103.80. Should this occur we will look for a push into 105.50, and if momentum is very strong we cannot rule out a move higher to 106.92.

If we cannot hold above 103.80, we could see another move back down into 103.21. A break below this level may result in further downside to 102.80; and any further breaks to the downside may trigger a bigger move into 100.65.

COMMODITIES

GOLD – 1838 ( +52 or +2.91% )

Gold bounced back last week but the question now is can this market market. We will be discussing the implications of this in the MEMBER PORTAL.

For a continued move higher we must now see this market close above 1830. Should this occur we would then need to see a strong break back above through 1850. Should this occur we could see further upside into 1900; and if momentum is very strong we may see a retest of 1920.

If Gold cannot close above 1830, we will look for a move back down to 1800. A break below this level could see a move lower into 1750; and if momentum is very strong to the downside we could see a move to 1726.

Additional analysis including charts available in our platform

Commentary from our trading desk – written by our Head of Trading.

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