Market Brief

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Will we see a turn in retail? With the festive season now behind us, did retail sales live up to its hype?

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6760 ( +164 or +2.49% )

The ASX is testing a very key resistance area this week.

VOLATILITY ALERTS:

Thu 11:30 – Unemployment Rate

For a continued move higher we must now see the ASX hold above 6682. Should this occur, we will look for a move into 6804, and if momentum to the upside is very strong we cannot rule out a move to 6850 and 6960.
If the ASX cannot hold above 6682, we will look for a move back down to 6550. A strong break and close below this level however could see the ASX retest of 6500, and if downside momentum is very strong, we could see a move down to 6435.

EUROPE

DAX – 14087 ( +431 or +3.16% )

The DAX has finally hit blue sky and we will be discussing this market this week in the MEMBER PORTAL.

VOLATILITY ALERTS:

Wed 20:00 – ECB President Lagarde Speaks

For a continued move to the upside we must now see the DAX close above 13800. Should this occur, we will look for a strong move up into 14210, and if momentum remains strong a push back higher into 14450.

If the DAX fails to close above 13800, 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 13520; however if momentum is very strong to the downside we cannot rule out a move to 13266.

US

SP500 – 3830 ( +27 or +0.71% )

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

VOLATILITY ALERTS:

Fri 04:30 – FED Chair Powell Speaks
Sat 12:30 – Retail Sales

For a move higher we would like to see the S&P hold above 3800. Should this occur, we will look for a move to 3850; and if momentum is very strong we cannot rule out a move to 3900.

If we cannot hold above 3800, we could see this market move lower into 3780. A break of this level however may result in a quick move down to 3733; and if momentum to the downside remains strong we may see a fast move down to 3694.

FOREX

AUD/USD – 0.7764 ( +65 or +0.84% )

The Aussie dollar continues to rally strongly on the back of strong commodities. 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 0.7662. Should this occur we will look for a move into 0.7750, and if upside momentum remains very strong we cannot rule out a move to 0.7823 and 0.7997 before a pause.

If the AUD cannot hold above 0.7662, we will look for this market to break lower through 0.7617. A break and close below this level could see a sharp decline into 0.7550; and if momentum to the downside remains strong we cannot rule out a move into 0.7489.

EUR/USD – 1.2113 ( +3 or +0.02% )

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

VOLATILITY ALERTS:

Wed 20:00 – ECB President Lagarde Speaks

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 – 1.3563 ( -95 or -0.70% )

Cable is also at a key juncture with the Brexit deal signed, but still being combed over.

For a move to the upside now, we would like to see Cable hold 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 hold above 1.3550, we will look for a move down to 1.3410. A break below this level however could see Cable further depreciate to 1.3277 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3161.

USD/JPY – 103.96 ( +71 or +0.69% )

The YEN management to bounce last week but remains in a sustained downtrend.

NOTE: Monday is a public holiday in Japan (Coming of Age Day)

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 – 1849 ( -95 or -0.70% )

Gold was sold off aggressively last week as this market continues to chop in its range. We will be discussing this market in more detail in the MEMBER PORTAL.

For a continued move higher we must now see this market hold 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 hold 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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