Market Brief – Monday 15th September 2014

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.
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Trade View has entered the weekend Net Long.

AUSTRALASIA

ASX – 5518  ( – 79 or – 1.41% )

The ASX could not hold on any longer and fell away towards the later stages of the week.

For the up move to restart we would like to see a solid long up bar break past 5545 – 67 before reaching the area between 5595 –  5616. Once this area is broken and if the momentum remains strong then we could see 5684 tested.

For the down move to continue we would like to see an early break past 5497 before attempting to break past the area between 5462 – 47. If this level does not hold as support and is broken with strong downward momentum then we could see 5415 reached before an old level of 5366 comes back in play.

EUROPE

FTSE – 6801 ( – 69 or – 1.00% )

We saw a little bit of volatility in the FTSE last week due to the Scottish referendum. Also the FTSE moved lower with some polls indicating a ‘Yes’ vote is likely. The Volatility looks to continue until the final vote on Thursday.

For the move higher to continue we would like to see a solid attempt at breaking through both 6816 and 6852 before a new attempt at breaking 6905 is made. If this occurs then 7044 could be the first level reached in a possible continuation of a new uptrend.

If the downside move takes full effect then a break past 6769 could lead the Index towards 6703. Once this level is broken then we will watch 6681 and 6652 before a possible support level is reached near 6632.

DAX – 9638 ( – 146  or – 1.49% )

The DAX followed the S&P lower last week. The more unrest in Europe the harder it is for the DAX to gain momentum to the upside. If I was Germany I would be asking myself whether or not a move to a Eurozone is a good thing.

If the DAX continues higher we would like to see a strong break back up above 9672 before reaching 9719. Once this level is broken we could see 9784 which will need to be broken with a long up bar before reaching 9829 and potentially 9896.

If the DAX continues its move lower we would like to see 9580 broken early in the week with a long down bar before reaching 9475. Once 9475 is broken we could see the DAX find temporary support near our FICM level of 9401.

US

S&P – 1984 (  – 24  or  – 1.20% )

The nervousness continues on the S&P as it could not hold above 2000 for long and is now sitting near a FICM downside level of 1981. Even though the move has been over 1% our comments remain the same with small changes.

For the up move to continue then we would like to see a strong break back above 2002 which will need to become a strong level of support before a push past 2012 is made. Once this level is broken then if the momentum continues strong we will be monitoring 2023 and 2057.

For the down move to start we would like to see a strong break and close below 1981 before reaching 1968 again. If the downward momentum is strong then 1943 and 1927 could be reached.

FOREX

AUD.USD – 9036  ( – 341  or – 3.64% )

No more ranging for this pair last week. We saw our FICM level of 9203 become temporary support before become resistance on its way down.

For the up move to restart we would like to see a solid break back above 9096 reaching 9176. Once this occurs then 9203 will be the talk of the town once again.

If the AUD pairs become unloved further then a strong long down bar break past 8971 will start a heavy move down breaching 8913 on its way down towards 8823. If the downside move it strong then we could see 8660 (lows from Jan 2014) tested over the next few weeks.

EUR.USD – 12963 ( + 12 or + 0.09% )

After the rate cut the brakes were applied on the down move. Therefore our comments from last week will remain the same.

For an upmove to restart we would like to see a strong break and close back up early in the week past 13033, this could then lead the pair to 13086. If there is enough momentum then 13104 could be past on its way towards 13162 where the EUR finds further resistance.

If we see continued strength in the USD and the EUR takes another leg down then a break past 12915 could start a move through 12897 reaching 12763. A solid break past this level could begin a FREE FALL for the EUR.

GBP.USD – 16265 ( – 60 or – 0.37% )

The GBP gapped down early in the week with the Scottish ‘YES’ vote gaining momentum over the weekend. But after the initial fall which would have stopped out many, the gap was almost filled.
NOTE: the gap down reached 4 Standard Deviations from the Highs. This can be seen on the chart in BLUE(Clients Only)

For the GBP to move higher we would like to see a solid start to the week breaking and closing above the GAP level of 16280 with a long up bar. Once this occurs with strong momentum then we could see 16333 broken on its way towards 16458.

If the GBP is to take another leg lower, we would like to see 16280 hold as a strong level of resistance before moving lower breaking down past 16229 early in the week followed by another strong push past 16148 before it dips below and prints 15986. We will also be watching 15723 closely if the GBP decides to GAP again.

USD.JPY – 10736 ( + 228  or + 2.17% )

If you thought the USDJPY had moved a bit last week, think again. Talking to one of the traders on the desk we both agreed that people forget that when this pair moves it really moves.

For the USD to move higher we would like to see 10683 become a solid level of support before pushing higher reaching the area between 10883 – 10914 over the next few weeks before extending to 109.98 and popping its head above 110.

If the down move restarts we would like to see an early break and close back past 10683 before reaching 10541 where it could find some support.

I have placed 2 charts for your reference. (Clients Only)

COMMODITIES

GOLD – 1229 ( – 39 or – 3.08% )

“The less there is to worry about the more GOLD becomes unloved”

For the upward move to restart we would like to see a solid break back above 1241 before reaching 1252. Once this occurs we could see GOLD near 1274.

If a down move continues then we would like to see a strong break below 1215. If the momentum is strong then we could see GOLD below 1200 and possibly testing the lows of June 2013 and Dec 2013 of 1180 and 1182 respectively.

US LIGHT CRUDE OIL – 9223 ( – 117  or – 1.25% )

A few wild swings for OIL last week but with no real direction. We would like to see a new formation occur before deciding on direction.

For the upmove to continue we would like to see 9144 hold as a strong level of support before pushing back past and closing above 9336. Once this occurs we could see an explosive move through 9448 and 9557 reaching a strong level of resistance near the 9697 – 9721 area.

If OIL restarts another leg down then we would like to see 9144 broken with a long down bar. Once this occurs it could send OIL into a FREE FALL. This will be watched closely over the next few weeks. Levels to watch are 9058, 8973, 8844 and 8727.

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