Market Brief

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Japan has been flying high for weeks... Can it continue its stellar run?

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6832 ( +256 or +3.89% )

The ASX was stronger last week following a rebound off key support.We will be discussing this in our LIVE CHAT ROOM this week.

For a continued move higher we must now see the ASX hold above 6804. Should this occur, we will look for a move into 6850, and if momentum to the upside is very strong we cannot rule out a move to 6960.

If the ASX cannot hold above 6804, we will look for a move back down to 6682. A strong break and close below this level however could see the ASX retest of 6550, and if downside momentum is very strong, we could see a move down to 6500.

EUROPE

DAX – 14065 ( +641 or +4.78% )

The DAX printed a new all-time high last week and we are watching this market for further gains to the upside.

For a continued move to the upside we must now see the DAX close above 14210. Should this occur, we will look for a strong move up into 14450, and if momentum remains strong a push back higher into 14600.

If the DAX fails to close above 14210, we may see a retest back down into the key level of 13800. 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 – 3890 ( +186 or +5.02% )

Like the DAX, the S&P continues to push into new territory as we are now clearly in rally mode. We will be discussing this in our LIVE CHAT ROOM this week.

VOLATILITY ALERTS:

Thu 00:30 – CPI (monthly)
Thu 06:00 – FED Chair Powell Speaks

For a move higher we would like to see the S&P hold above 3850. Should this occur, we will look for a move to 3900; and if momentum is very strong we cannot rule out a move to 3952 and 4006.

If we cannot hold above 3850, we could see this market move lower into 3790. A break of this level however may result in a quick move down to 3720; and if momentum to the downside remains strong we may see a fast move down to 3650.

FOREX

AUD/USD – 0.7677 ( +35 or +0.46% )

The Aussie Dollar remains in a large sideways range and we will be on the lookout this week to see if buyers return to this market.

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 – 1.2048 ( -88 or -0.73% )

The Euro has come into a key support area and like the Aussie Dollar, is now at a junction point. We will also be discussing this in our LIVE CHAT ROOM this week.

VOLATILITY ALERTS:

Thu 00:30 – CPI (monthly)
Thu 06:00 – FED Chair Powell 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 – 1.3738 ( +39 or +0.28% )

Cable was again flat last week and we are now on high alert for a breakout.

VOLATILITY ALERTS:

Thu 04:00 – BoE Gov Bailey Speaks
Fri 18:00 – Prelim GDP (quarterly)

For a move to the upside now, we would like to see Cable hold above 1.3534, before a break higher through 1.3743. If this market can hold above this level we may then see a strong push into 1.3875 before another pause. A break through this level sets Cable up for a move up to 1.4041.

Should we fail to hold above 1.3534, 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 – 105.37 ( +65 or +0.62% )

The $/YEN posted yet another positive week on the back of $US strength but is the move close to exhaustion?

NOTE: Thursday is a public holiday in Japan (National Foundation Day)

For a move to the upside we must now see this market close above 105.50. Should this occur we will look for a push into 106.52, and if momentum is very strong we cannot rule out a move higher to 106.92.

If we cannot close above 105.50, we could see another move back down into 104.97. A break below this level may result in further downside to 104.02; and any further breaks to the downside may trigger a bigger move into 103.21.

COMMODITIES

GOLD – 1813 ( -35 or -1.89% )

Gold has once again struggled at the key 1850 level and the question now is can we retest this market this week or is Gold heading lower? We will discuss this market in detail in the LIVE CHAT ROOM.

For a continued move higher we must now see this market close above 1850. Should this occur we would then need to see a strong break back above through 1900. Should this occur we could see further upside into 1920; and if momentum is very strong we may see a retest of 1950.

If Gold cannot close above 1850, we will look for a move back down to 1800. A break below this level could see a move lower into 1786; and if momentum is very strong to the downside we could see a move to 1750 and 1726.

Additional analysis including charts available in our platform

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

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