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Market Brief – Monday 14th November 2016

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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

AUSTRALASIA

ASX – 5353 ( +199 or +3.86% )

After finding support near our 5090 level, the ASX has rallied right back up into another one of our targets.

VOLATILITY ALERT: Monetary Policy Minutes on Tuesday, Unemployment Numbers on Thursday.

For a continued move to the upside we would like to see this market close strongly above 5373. If this were to happen, we could see a move into 5437. A strong break above this levels could see a move to retest the all important 5504 and 5550 levels, and if momentum remains very strong we could see the ASX rally to 5664 by the end of the week.

If we fail to close above 5373, we will look for a move back down to 5294. A break below this could result in a move back into 5238, and further breaks to the downside could see the ASX head to 5161.

 

EUROPE

DAX – 10691 ( +476 or +4.66% )

The DAX also benefited from last week’s rally in global equities. This week we expect markets to again look to Draghi and the US for further direction.

VOLATILITY ALERT: Draghi speaks on Monday, German Prelim GDP and ZEW Sentiment on Tuesday.

For a continued move to the upside we would like to see the DAX hold above above 10585 – 10601, followed by a break above 10749. Should this occur, we may see another push higher into 10863. Further breaks of this level could see the DAX rally 10983 and if the move is very strong, 11060 cannot be ruled out.

If we fail to hold above 10601, we will look for a move back down to 10475 and should there be further downside, we could see a move lower to 10382. Should momentum remain very strong, we will look for a move down to 10158.

 

US

SP500 – 2165 ( +81 or +3.89% )

Donald Trump is President of the United States. We have been showing our members that whilst there were many pro-Hillary polls, quite a few of our models were looking for a Trump win.

If you did not follow our coverage, now is the time to do so by signing up to the MEMBER PORTAL.

VOLATILITY ALERT: Retail Sales on Tuesday, PPI on Wednesday, Building Permits and CPI on Thursday.

For a move higher we must now see the S&P break hold above 2160. A strong close above this level could see a retest of 2176, and further breaks to the upside may see a strong move to 2194 before a pause. Should we break 2194 we will look for a move into the all-time highs at 2212.

If we cannot hold above 2160, we will look for a move back down to 2137. A break and close through 2126 may result in a retest of 2112, with the potential for a quick spike down to 2108.

 

FOREX

AUD/USD – 0.7545 ( -127 or -1.66% )

The AUD closed lower last week and now all eyes point to the employment numbers due this week.

VOLATILITY ALERT: Monetary Policy Minutes on Tuesday, Unemployment Numbers on Thursday.

For a move higher we would like to see the AUD close above 0.7617, followed by a strong break and close above the 0.7662 – 0.7683 region. A strong break and close above these levels could then see a quick move to 0.7729 before a pause; and if momentum remains strong we will look for strong move into 0.7789.

If we cannot close above 0.7617, we will look for a move back down to 0.7447, and further breaks lower could see 0.7364 before another potential pause. If momentum remains strong, a break and close below 0.7364 could see a sharp move down to 0.7282.

 

EUR/USD – 1.0855 ( -283 or -2.54% )

Last Tuesday we saw the EURO close strongly through the 1.1000 level and it did not look back. We are now back to some very important levels and will keep a close eye on this market.

We will discuss this market in more detail throughout the week in our MEMBER PORTAL.

VOLATILITY ALERT: Draghi speaks on Monday, German Prelim GDP, Euro Flash GDP and ZEW Sentiment on Tuesday, ECB Monetary Policy Minutes on Thursday, Draghi speaks again on Friday.

For a sustained move higher we would now like to see a strong break and close above 1.0902. Above this we have the key area between 1.0977 – 1.1000, and a strong break and close through 1.1033 may likely see a retest of 1.1117.

If we cannot break above 1.0902, we will likely see continued chop back and forth between 1.902 – 1.0804. A strong bar break below 1.0804 could see a fast move down into 1.0727 – 1.0701 before a pause. Further breaks below 1.0701 would allow for a move to 1.0635 and potentially a retest of 1.0521.

 

GBP/USD – 1.2597 ( +79 or +0.63% )

The GBP/USD is still hovering between 1.2500 – 1.2600 discussed previously.

VOLATILITY ALERT: Annual CPI on Tuesday, Unemployment Rate on Wednesday, Retail Sales on Thursday.

For a continued move to the upside, we would like to see Cable remain above 1.2458. Should this occur we will look for a move back up to 1.2720. A strong break through this level could see the GBP/USD trade to 1.2853, and should momentum remain very strong we cannot rule out a move to 1.3035.

On the downside, should we break and close strongly below 1.2458, we could see a potential move down to 1.2297. A strong break and close below this level may see the Pound trade back down to 1.2159.

 

USD/JPY – 106.63 ( +355 or +3.44% )

The Trump presidency saw all USD crosses rally strongly, including the USD/JPY. Is this finally the break the BoJ and Kuroda were looking for?

VOLATILITY ALERT: Prelim GDP on Monday.

For a continued move to the upside we would now like to see the market hold above 106.30 and close above 107.75. Should this occur we will then be looking for a move into 108.31. A strong break and close above 109.21 could then see a quick move into 109.94 before a pause. If we are to see a complete V-reversal and fade to the upside this week, we will not rule out a move to 111.09 by the end of the week.

If however the USD/JPY cannot hold above 106.30, we will look for a move down to 105.79. A break below this level could see the USD/JPY trade quickly down to 104.97 before a potential pause. Should we continue to trade lower and see continued downside pressure on the USD/JPY- a sharp move to 103.99 is possible.

 

COMMODITIES

GOLD – 1227 ( -77 or -5.9% )

Last week’s strong moves in the $US created a lot of pressure on any further upside movement in GOLD. We will be watching this market closely this week given the heightened volatility.

We will discuss this market in more detail throughout the week in our MEMBER PORTAL.

For a continued move higher we would like to see 1222 hold as support, followed by a break and close through 1247. Should this occur we could see a strong move to 1258, and a break of this level could see a move into 1276 before another pause. If momentum to the upside remains very strong we will watch for a retest of 1303.

If Gold cannot hold above 1222, we will look for a move back down to 1206. A strong break and close below this level we could see Gold trade back down to 1187-1181; and additional breaks lower could see this market head back down to 1160.

 

 

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The views represented on this website do not contain (and should not be construed as containing) financial advice, recommendations, opinions in relation to acquiring, holding or disposing of a financial product of any kind, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Trade View Investments accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of the above information. Consequently any person acting on it does so entirely at his or her own risk. The research does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.

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