Weekly Market Brief - with Text_Blog2

Market Brief – Monday 11th May 2015

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.
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AUSTRALASIA

ASX – 5655  ( – 195 or – 3.33% )

After an initial move high the ASX took a dive last week to the tune of over 200 points. The move was very aggressive breaking through a ket level of 5790 with a long down bar break. Other markets have rallied, look for the ASX to catch up.

For the ASX to move higher we need to see 5636 hold as a strong level of support followed by a strong push higher reaching 5715. Once this level is reached and broken 5754 and 5790 will be next. We will then need to see a long up bar break and close past 5790 before the ASX reached 5842 again.

If the ASX is to continue its strong move down then we need to see an early break and close back past 5636 pushing past 5595 before reaching 5542. Once this occurs we could see the ASX settling near the area between 5463 – 48.

EUROPE

DAX – 11700 ( + 209 or + 1.82% )

One thing I will say about the DAX is that we really enjoy trading it when it moves like last week. 500+ points down followed by 500+ points up. As always we will be watching the DAX this week closely for some more Volatility, if no Volatility then a strong move either way will do the trick.

For the upmove to continue this week we would like to see an early break past 11791 and 11868 before moving towards 12015 again. As we know the DAX can really move when it gets going we will extend our reach this week and possibly see the DAX near 12164. If the upward momentum is strong DON’T BLINK because you may see the DAX over extend towards (dare I say it) 12460.

If we see continued issues with Greece then a strong move down breaking past 11621 could see the DAX in a bit of a Free Fall again reaching the area between 11292 – 57. If the move lower has strong momentum then the levels we will be watching closely will be 11163, 11080 and 10941 and finally 10869.

US

S&P – 2113 ( + 6 or  + 0.28% )

I’d say the S&P shook out a lot of traders, I think we mentioned this a while ago. A lot of traders would have initiated shorts and held onto them. But, oops. 2112 is the key here for the S&P and it keeps coming back to this level to try to figure out what next. Last week we said “It’s important to note that any drops atm are being bought back aggressively, if this continues then it supports a bullish tone.”

We need to see the S&P hold 2112 before a break and close past 2126 occurs. If the upward momentum is strong we could see 2137 broken with a long up bar. This could then lead the S&P to overextend itself towards the area between 2173 – 80.

If the S&P breaks back down past 2112 with a long down bar then 2101 could be seen very quickly. Once this occurs we could see 2085 and 2076 once again. if the downside moves become aggressive then the area between 2050 – 46 could be seen.

FOREX

AUD.USD – 7933  ( + 86 or + 1.10% )

Another attempt at 8000 by the AUD early in the week was short lived as it fell back down as quick as it moved up. Lets see if the push higher can be sustained??

For the up move to continue we would like to see 7869 hold as a strong level of support before another attempt at breaking 8000 occurs. If so then 8088 could be seen quickly followed by 8139.

For the longer term downside move to restart we would like to see a strong down bar break past 7869 before we see 7778 again. This could then lead the AUD to see 7718. Once this occurs we could see 7635 again.

EUR.USD – 11211 ( + 15 or + 0.13% )

POP and Drop. The EUR Popped to a high of 11391 which was only 5 points below our FICm level of 11396 and then it Dropped back down to close only 15 points higher than last week.

For the EUR to continue its move higher we would like to see an early break above 11315 before tested our Key FICM level of 11396 again. This level will then need to broken with a long up bar if the EUR is to reach 11471.

For the longer term downleg to restart and continue would like to see an early break back down past 11166 leading towards 11038. Once this is broken then 110 comes back into play, break 110 then 10941 and 10899 will be next.

GBP.USD – 15437 ( + 302 or + 2.00% )

With the UK Election on last week Volatility was the name of the GAME and the GBP did not disappoint with a massive POP through 15500 reaching a high of 15522 before coming back down to settle below our Key FICM level of 15448.

For the GBP to continue its strong move up we would like to see a long upbar break and close past the Key FICM level of 15448. This will then need to become a solid level of support before a move towards 15644 is made. If the upward momentum is strong then we could see 15834.

For the down move to start we would need to see the Key FICM level of 15448 become a solid level of resistance pushing the pair down past 15366 and 15280 before reaching 15209 again. If this level is broken with a  long down bar and strong momentum we could see the GBP extend past 15140 reaching 14950.

USD.JPY – 11978 ( – 43 or – 0.36% )

This pair is back to its old tricks as it moves sideways while any move lower is bought up quickly. We saw this last time around the 102 –  103 area just before the big move higher past 120 was made within 3 months. Therefore our comments remain the same.

Be Prepared!!!!

For the USD to continue its rally we would like to see a strong long up bar break through another all important key FICM level of 12064. Once this occurs the move higher could reach 12152. If this too is broken with a long up bar then 12184 could be first on its way towards 12275.

If it’s too hard for the USDJPY to break back above 12064 and we see a restart back lower then we would like to see a strong early break past 12018 followed by a break through the area between 11977 – 45. Once this occurs we are back down near 11867.

COMMODITIES

GOLD – 1188 ( + 10 or + 0.85% )

Another sideways move for GOLD. As mentioned previously “GOLD will need to break an important level between 1178 – 80” if it is to continue lower.

For the upward move to restart then we would like to see 1178 – 80 become a strong level of support before a bounce towards 1192 is made. Once this occurs we could see 1208 again.

For the down move GOLD will need to break an important level between 1178 – 80. If this occurs with a long down bar then it could continue down towards 1167 and settling near 1149 again.

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