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Market Brief – Monday 16th December 2019

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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

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INDICES

AUSTRALASIA

ASX – 6776 ( +43 or +0.64% )

 

The continues to remain range bound as we head into the final week before Christmas. Can this market stage a Santa rally? We will be discussing this in the MEMBER PORTAL this week.

 

VOLATILITY ALERTS:
Tue 11:30 – Monetary Policy Meeting Minutes
Thu 11:30 – Unemployment Rate

 

For a continued move higher we must now see the ASX close above 6804. Should this occur we will look for a re-test of 6850. A strong break of this level however is likely to see the ASX rally to new all-time highs into 6905, and if momentum is very strong we cannot rule out a move to 7011.

If the ASX cannot close above 6804, we will look for a move back down to 6720. A strong break and close below this level however could see the ASX move lower into 6650 before a pause; and if downside momentum is very strong, we could see a move down to 6544.

 

 

EUROPE

DAX – 13306 ( +133 or +1.01% )

 

The DAX managed to print a new yearly high on Friday however retreated into the close. Can this market continue to post yet another high this year?  

 

VOLATILITY ALERTS:
Mon 19:30 – German Flash Manufacturing PMI, Services PMI
Wed 19:30 – ECB President Lagarde speaks
Wed 20:00 – German Ifo Business Climate

 

For a continued move to the upside we would now like to see the DAX hold above 13205, on its way to retesting 13388. A strong break and close above this level could see a fast move to 13520, and if momentum is very strong we could see a sharp move higher into 13697.

 

If the DAX fails to hold above 13205, we could see a move back down into 13050. A break below this level could mean a further move down into 12921, and if momentum is very strong we could see a fast move down to 12830.

 

 

US

SP500 – 3171 ( +25 or +0.79% )

 

As the S&P enters its 8th straight week of all-time highs, how long will we continue to see the bulls dominate this market?

 

VOLATILITY ALERTS:
Tue 01:45 – Flash Manufacturing PMI
Wed 00:30 – Building Permits
Fri 00:30 – Philly Fed Manufacturing Index
Sat 00:30 – Final GDP (quarterly)
Sat 02:00 – Personal Spending (monthly)

 

For a move higher we would like to see the S&P hold above 3166. Should this occur, we will look for a move higher into 3198. A strong break above this level however sets the stage for a move higher into 3210; and if momentum is very strong we cannot rule out a move to 3248.

If we cannot hold above 3166, we could see this market move lower into 3115. A break of this level however may result in quick move down to 3100; and if momentum to the downside remains strong we may see a fast move down to 3066. 

 

FOREX

AUD/USD – 0.6875 ( +34 or +0.5% )

 

The Aussie Dollar came right into our key resistance area of 0.6934 before reversing off it on Friday. This week is shaping up to be another key week for this market.

 

VOLATILITY ALERTS:
Tue 11:30 – Monetary Policy Meeting Minutes
Thu 11:30 – Unemployment Rate

 

For a move higher, we would first like to see the AUD hold above 0.6873. Should this occur, we will look for a retest of 0.6934, and if upside momentum remains very strong we cannot rule out a move to 0.7014 before a pause.

 

If the AUD cannot hold above 0.6873, we will look for a move lower into 0.6800. A break of this level sets the stage for a move down to 0.6762; and if momentum is very strong to the downside we may see a move into 0.6692.

 

 

EUR/USD – 1.1118 ( +58 or +0.52% )

 

Like the Aussie Dollar, the EURO also rallied into a very big resistance area before reversing on a dime. 

 

VOLATILITY ALERTS:
Mon 20:00 – Euro Area Flash Manufacturing PMI, Services PMI
Wed 19:30 – ECB President Lagarde speaks

 

For a move higher this week, we would like to see the EURO hold above 1.1117; followed by a break back above 1.1197. Should this occur, we will look for a move to 1.1249 if momentum remains strong.

 

If the EURO cannot hold above 1.1117, we could see a move back down into 1.1033. If this market continues to sell-off, we could see a sharp move down into 1.0977, and any further weakness may result in a much bigger move down to 1.0902.

 

 

GBP/USD – 1.3333 ( +196 or +1.49% )

 

The big mover last week was Cable with UK PM’s resounding victory in the general Election. We will again be covering this market exclusively in the LIVE CHAT ROOM this week.

 

VOLATILITY ALERTS:
Mon 20:30 – Flash Manufacturing PMI, Services PMI
Tue 03:00 – Bank Stress Test Results
Wed 20:30 – CPI (annual)
Thu 20:30 – Retail Sales (monthly)
Thu 23:00 – BoE Interest Rate Announcement
Fri 20:30 – Current Account, Final GDP (quarterly)

 

For a continued move to the upside, we must now see Cable hold above 1.3277. Should this occur we will look for a move into 1.3386; and if momentum to the upside remains strong we cannot rule out a break of the key resistance at 1.3534.

On the downside, a close below 1.3277 could result in a move to 1.3110. A break below this level however could see this market retest the important 1.3035 level; and if momentum to the downside is strong we cannot rule out a bigger move down to 1.2868 and 1.2720.

 

 

USD/JPY – 109.34 ( +77 or +0.71% )

 

The $/YEN also continues to remain in a sideways range and we are again on alert for a breakout this week.

 

VOLATILITY ALERTS:
Thu 12:30 – Monetary Policy Statement, BoJ Press Conference

 

For a move to the upside we must now see this market hold above 109.21, on its way to retesting 109.94 before a pause. A strong break and close above this level could then see the $/YEN rally into 110.31, and if momentum is very strong we could see moves to 110.78 and 111.09.

If we cannot hold above 109.21, we could see a fast move lower into 108.31. A break below this level may result in a retest of 107.75 before a pause. Should we break lower however, we could see a strong move down into 107.36.

 

COMMODITIES

GOLD – 1475 ( +16 or +1.1% )

 

Like the YEN, Gold is also range bound however did manage to hold the key 1450 – 1460 area last week.

 

For a continued move higher we must now see this market hold above 1460, on its way to retesting 1485. A break and close above this level sets the stage for a move to 1505; and if momentum is very strong to the upside we cannot rule out a move to 1526.

 

If Gold cannot hold above 1460, we will look for a move back down into 1450. This is a pivotal area; and any break below this level sets the stage for a much larger move down to 1433, 1416 and potentially 1402.

 

 

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