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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.
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ASX – 5733 ( +90 or +1.59% )
The ASX is now in rally mode following the base we alerted to last week. This week we will look to see if the ASX can continue to post further gains.
VOLATILITY ALERT: Unemployment numbers on Thursday.
For a continued move higher we would like to see the ASX break and close above 5746. A strong break through this level could see the ASX move to 5777, and should we close strongly above this 5777 level we will look for a move to 5823. If momentum remains strong our we we will look for further upside to our target of 5875.
If we cannot break and close above 5746, we will look for a retest of 5705. A strong break and close below this level may see the ASX head sharply back down to 5589.
DAX – 11662 ( +6 or +0.05% )
Once again the DAX remains confined with a tight range, following a failed breakout on Friday. This week is shaping up to be a very interesting week on the DAX and we will will be discussing this in the LIVE CHAT ROOM.
VOLATILITY ALERT: Prelim German quarterly GDP and ZEW Sentiment on Tuesday.
For a continued move to the upside we must see the DAX close strongly above the 11755 – 11790 area. Should this occur, we will look for a retest 11875. If momentum is very strong, a break and close above this level could see another push higher into 12054.
If the DAX fails to close above 11755, we will look for a move back down to 11592; and if there is a complete reversal of the breakout, a strong move down to 11340 cannot be ruled out.
SP500 – 2315 ( +21 or +0.92% )
The US continues to lead global equities as the S&P yet again posts all-time highs, closing above our 2312 level.
VOLATILITY ALERT: Monthly PPI and Yellen speaks on Tuesday, CPI, Retail Sales and Yellen speaks on Wednesday, Building Permits on Thursday.
For a move higher we would like to see a the S&P hold above 2312. Should this occur we will be looking for a move higher into 2334. If momentum is very strong to the upside, we will look for further moves higher to 2350 and 2386.
If we cannot hold above 2312, we will look for a move back down to 2292. A strong break and close below this level may see a retest of 2270; and should we see a complete reversal to the downside a retest of 2256 cannot be ruled out.
AUD/USD – 0.7676 ( -4 or -0.05% )
The AUD spent the majority of last week in a volatile sideways range; and as such our levels remain unchanged, again closing right near our key level of 0.7677. We will be again be watching this level closely.
VOLATILITY ALERT: Unemployment numbers on Thursday.
For a move higher we would like to see this market break strongly through 0.7677. Should this occur we will look for a move to 0.7729 before a pause. However- if we break above this level we could see very fast moves into 0.7765 and 0.7833.
On the downside, a failure to close above 0.7677 could see a move back down to 0.7617. A strong break and close of this level may result in another leg down to 0.7561, and if momentum is very strong we cannot rule out a sell-off into 0.7489 and 0.7447.
EUR/USD – 1.0638 ( -147 or -1.36% )
Last week we mentioned the EURO was approaching key resistance areas and that’s exactly what we saw, with a reversal that began on Monday.
VOLATILITY ALERT: Quarterly GDP on Tuesday, ECB Monetary Policy Accounts on Thursday.
For a sustained move higher we would now like to see this market hold above 1.0631. If we can hold above this level we will look for a move back into 1.0738, and should momentum remain strong we will be watching the key area between 1.0977 – 1.1000.
If we cannot close above 1.0738, we could see continued chop back and forth around the 1.0631 level. However should we remain below this level, our next level down is 1.0525. A strong break below that could see 1.0462 very quickly, and if momentum is strong we cannot rule out a move to 1.0424.
GBP/USD – 1.2486 ( +7 or +0.06% )
Cable was quiet for the second straight week (as we alerted to last week), with our key 1.2480 level proving pivotal all week. Our comments for this market also remain the same- BE PREPARED because Brexit news will return front and center.
VOLATILITY ALERT: Annual CPI on Tuesday, Unemployment Rate on Wednesday, Retail Sales on Friday.
For a move to the upside we would like to this market hold above 1.2480. A strong break and close above this level should see a retest of 1.2622, and if momentum remains strong a move to 1.2720 is still very possible.
On the downside our levels have not changed. We continue to watch two key areas at 1.2404, 1.2297 and 1.2100. As previous- the downside may be swift and sharp.
USD/JPY – 113.22 ( +65 or +0.58% )
Last week we alerted members in our MEMBER PORTAL the importance of the 111.72 level, having taken Long positions anticipating a move higher. This week we will continue to discuss this market in more detail in our LIVE CHAT ROOM.
VOLATILITY ALERT: Prelim Quarterly GDP on Monday.
For a continued move to the upside we must now see this market break and close strongly above 113.87 – 114.08. A close above 114.08 could see this market retest 114.52; and if we see a reversal to the upside this week, we cannot rule out a move to 115.54.
If we cannot close strongly above 113.87, we will look for a retest of 113.04. A break and close below this level may likely see this market head lower to retest the key 111.72 level. If we should break this level, watch out for a sharp move down into 111.09; and if momentum is strong a sharp sell-off to 109.94 is possible.
GOLD – 1233 ( +13 or +1.07% )
GOLD all but retested our key 1218 level before a bounce to finish the week 13 points higher at another level we highlighted last week- 1233.
For a continued move higher we want to see this market now hold above 1233. Should this occur we will continue to look for a move to 1247, and if momentum to the upside is strong we could see a further move higher into 1257
If Gold cannot hold above 1233, we may see a retest of 1222-1218. A strong break and close below these levels may result in a move back down to 1206; and should this level break we may see Gold trade back down to 1187-1181 area quickly.
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