Market Brief

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The Fed, the BoE, and the BoJ... Which Central Bank will move these markets? And will one surprise so late in the year?

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

A week full of Central Banks. The Fed, the BoE, and the BoJ...

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6616 ( -64 or -0.96% )

The ASX is trying to sustain it’s uptrend as we see this whether the bulls have what it takes to push this market higher.

VOLATILITY ALERTS:

Thu 11:30 – Unemployment Rate

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 – 13146 ( -151 or -1.14% )

The DAX enters its sixth straight week of sideways. Will this market finally breakout this week? We will be discussing this market this week in the MEMBER PORTAL.

VOLATILITY ALERTS:

Wed 19:30 – Flash Manufacturing PMI, Flash Services PMI
Fri 20:00 – German Ifo Business Climate

For a continued move to the upside we must now see the DAX close 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 close 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 – 3661 ( -29 or -0.79% )

The S&P has again posted another all-time high as we head into a very important week to finish off the year.

VOLATILITY ALERTS:

Thu 00:30 – Retail Sales (monthly)
Thu 01:45 – Flash Manufacturing PMI, Flash Services PMI
Thu 06:00 – FOMC Interest Rate Announcement
Thu 06:30 – FOMC Press Conference
Fri 00:30 – Philly FED Manufacturing Index
Sat 08:30 – Bank Stress Test Results

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 – 0.7532 ( +106 or +1.43% )

The Aussie dollar rallied strongly last week pushing above the key long-term level of 0.7500. We will again be discussing this market this week in the LIVE CHAT ROOM.

VOLATILITY ALERTS:

Thu 11:30 – Unemployment Rate

For a move higher, we would first like to see the AUD hold above 0.7489. Should this occur we will look for a move into 0.7550, and if upside momentum remains very strong we cannot rule out a move to 0.7617 and 0.7662 before a pause.

If the AUD cannot hold above 0.7489, we will look for this market to break lower through 0.7447. A break and close below this level could see a sharp decline into 0.7402; and if momentum to the downside remains strong we cannot rule out a move into 0.7364.

EUR/USD – 1.2113 ( -7 or -0.06% )

The Euro is up against significant resistance and this will be yet another important week for this market.

VOLATILITY ALERTS:

Wed All Day – OPEC-JMMC Meetings
Wed 20:00 – Flash Manufacturing PMI, Services PMI

For a move higher we would like to see the EURO close 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 close 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 – 1.3223 ( -213 or -1.59% )

Cable was sold off aggressively last week as we continued to see key intraday levels get broken.

VOLATILITY ALERTS:

Wed 20:30 – Flash Manufacturing PMI, Services PMI
Thu 23:00 – BoE Interest Rate Announcement
Fri 18:00 – Retail Sales (monthly)

For a move to the upside now, we would like to see Cable close above 1.3277. If this market can hold above this level we may then see a strong push into 1.3410 before another pause. A break through this level sets Cable up for a move up to 1.3550.
Should we fail to close above 1.3277, we could see a move back down to 1.3161. A break below this level however could see Cable further depreciate to 1.3035 by the week’s end and if momentum is very weak we cannot rule out a move to 1.2820.

USD/JPY – 104.02 ( -17 or -0.16% )

The YEN has once again continued to trade range bound and our levels as such remain unchanged.

VOLATILITY ALERTS:

Fri 12:30 – BoJ Interest Rate Announcement

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 – 1839 ( +1 or +0.05% )

After a strong start to the week, Gold finished pretty much where it however is holding onto our key support level of 1830. We will be discussing this market in more detail 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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