Market Brief

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Will the senate uncover something new? With markets consolidating at all time highs, Is this just another pause before a move higher; Or is something ‘up’ here?

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6770 ( -56 or -0.82% )

The ASX gave back all of its weekly gains on Friday and we are now again in a corrective scenario. We will be discussing this in our LIVE CHAT ROOM this week.

VOLATILITY ALERTS:

Thu 11:30 – Private Capex (quarterly)

For a continued move higher we must now see the ASX close 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 close 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 – 13963 ( -108 or -0.77% )

The DAX has failed to break through resistance and this will be a very important week for the market.

VOLATILITY ALERTS:

Mon 20:00 – German Ifo Business Climate

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 – 3902 ( -39 or -0.99% )

Like other markets the S&P is also consolidating at a very important area. We will be discussing this in our LIVE CHAT ROOM this week.

NOTE: Monday is a public holiday in the US (President’s Day)

VOLATILITY ALERTS:

Wed 02:00 – Fed Chair Powell Testifies, CB Consumer Confidence
Thu 02:00 – Fed Chair Powell Testifies
Fri 00:30 – Prelim GDP (quarterly)
Sat 01:45 – Chicago PMI

For a move higher we would like to see the S&P hold above 3900. Should this occur, we will look for a move to 3952; and if momentum is very strong we will look for moves.

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 – 0.7867 ( +107 or +1.38% )

The Aussie Dollar continues its strength on the back of rising commodities and this market is really roaring now. Will the RBA step in soon?

VOLATILITY ALERTS:

Thu 11:30 – Private Capex (quarterly)

For a move higher we must now see this market hold above 0.7833, followed by a strong break and close above 0.7903. Should this occur we will look for this market to retest 0.7950. A strong break and close above 0.7950 could see this market post further gains into 0.7988 by the week’s end.

If we cannot hold above 0.7833, we are likely to see a move lower into 0.7779. Should the downside momentum continue we could see 0.7704 quickly before another pause; and if selling pressure is strong a move into 0.7662 cannot be ruled out.

EUR/USD – 1.2117 ( -1 or -0.01% )

The Euro was flat last week and as such our levels remain unchanged.

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 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 – 1.4003 ( +152 or +1.1% )

Cable is now at the all important 1.4000 handle. We will be discussing this in our LIVE CHAT ROOM  this week.

VOLATILITY ALERTS:

Tue 18:00 – Claimant Count Change

For a move to the upside now, we would like to see Cable close above 1.4041, before a break higher through 1.4120. If this market can hold above this level we may then see a strong push into 1.4250 before another pause.

Should we fail to close above 1.4041, we will look for a move down to 3875. A break below this level however could see Cable further depreciate to 1.3743 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3534.

USD/JPY – 105.41 ( +49 or +0.47% )

The $/YEN was also met with stiff resistance last week despite another week in positive territory.

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 106.92, and if momentum is very strong we cannot rule out a move higher to 107.70.

If we cannot hold above 105.50, we could see another move back down into 104.40. A break below this level may result in further downside to 103.80, and any further breaks to the downside may trigger a bigger move into 103.21.

COMMODITIES

GOLD – 1783 ( -41 or -2.25% )

Gold is now testing a critical area and we are watching this market very closely. 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 1800. Should this occur we would then need to see a strong break back above through 1850 before a pause. Any further upside could see Gold rally to 1900; and if momentum is very strong we may see a retest of 1920.

If Gold cannot close above 1800, we will look for a move back down to 1750. A break below this level could see a move lower into 1726; and if momentum is very strong to the downside we could see a move to 1700.

Additional analysis including charts available in our platform

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

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