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Market Brief – Monday 17th February 2020

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7116 ( +84 or +1.19% )

 

The ASX is once again testing all time highs. Can it break out to the upside this week? We will be discussing the impact of this in the LIVE CHAT ROOM.  

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 hold above 7011. Should this occur we will look for a re-test of 7144. A strong break of this level however is likely to see the ASX rally to to further all-time highs at 7286.

If the ASX cannot hold above 7011, we will look for a move back down to 6850. A strong break and close below this level however could see the ASX move lower into 6804 before a pause; and if downside momentum is very strong, we could see a move down to 6682.

 

 

EUROPE

DAX – 13752 ( +276 or +2.05% )

 

The DAX has once again broken to all-time highs following its breakout of last week’s double top. It is approaching key resistance again. 

VOLATILITY ALERTS:
Tue 21:00 – German ZEW Economic Sentiment
Thu 23:30 – ECB Monetary Policy Meeting Accounts
Fri 19:30 – German Flash Manufacturing PMI, Flash Services PMI

For a continued move to the upside we must now see the DAX hold above 13576. Should this occur, we will look for a strong move into 13819, and if momentum remains strong a push back higher into 13994. Should we break above this level we cannot rule out a very strong we could see a move into 14310.

If the DAX fails to hold above 13576, we may see a retest back down into the key level of 13333 .A close below this level is likely to see a retest of 13205; however if momentum is very strong to the downside we cannot rule out a move to 13000.

 

 

US

SP500 – 3382 ( +58 or +1.74% )

 

The S&P continues to rally higher having posted yet another all-time high and now steadily approaching one of our major long-term targets. We will be discussing this in the MEMBER PORTAL this week.

NOTE: Monday is a public holiday in the US (President’s Day)

VOLATILITY ALERTS:
Thu 00:30 – Building Permits, Core PPI
Thu 06:00 – FOMC Meeting Minutes
Sat 01:45 – Flash Manufacturing PMI

For a move higher we would like to sees the S&P hold above 3274. Should this occur, we will look for a move higher into 3395. A strong break above this level however sets the stage for a move into 3420.

If we cannot close above 3274, we could see this market move lower into 3248. A break of this level however may result in quick move down to 3208; and if momentum to the downside remains strong we may see a fast move down to 3166.

 

 

FOREX

AUD/USD – 0.6713 ( +37 or +0.55% )

 

The Aussie Dollar is testing the very key level of 0.6711 and we will be watching this market around this level this week. 

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 close above 0.6762. Should this occur, we will look for a retest of of 0.6875, and if upside momentum remains very strong, we may see a push higher into 0.6934 before a pause.

If the AUD cannot close above 0.6762, we could see this market break lower and test 0.6598. If momentum to the downside is very strong, 0.6457 cannot be ruled out. 

 

 

EUR/USD – 1.0830 ( -113 or -1.03% )

 

The EURO has been on a one-way trip south as the sell-off continues. Last Friday we spoke about the significance of 1.0830 and we are here now, so it will be interesting to see what happens this week. 

VOLATILITY ALERTS:
Thu 23:30 – ECB Monetary Policy Meeting Accounts
Fri 20:00 – Euro area Flash Manufacturing PMI, Flash Services PMI

For a move higher this week, we would like to see the EURO hold above 1.0830, on its way to retesting 1.0902. A break above this level sets the stage for a move to 1.0977. Should this occur, we could then see a move to 1.1033 before a pause. 

If the EURO cannot hold above 1.0830, we could see a quick move down to 1.0777. However should this level be taken out easily we could see a very sharp move down to 1.0703 by the week’s end.

 

 

GBP/USD – 1.3046 ( +161 or +1.25% )

 

Cable continues to consolidate within a tight range and we now have an interesting week ahead of us. We will be discussing this market exclusively in the LIVE CHAT ROOM this week.

VOLATILITY ALERTS:
Tue 20:30 – Average Earnings Index
Wed 20:30 – CPI (annual), PPI (monthly)
Thu 20:30 – Retail Sales
Fri 20:30 – Flash Manufacturing PMI, Services PMI

For a move to the upside, we would like to see Cable hold above 1.3035, followed by a retest of 1.3161. Should we break above this level, we will look for a move to 1.3191; and if momentum is very strong 1.3250.

On the downside, should we fail to hold above 1.3035, we will look for a break down into 1.2868. A break below this level sets the stage for a bigger move lower into 1.2720.

 

 

USD/JPY – 109.77 ( +1 or +0.01% )

 

The $/YEN has closed the week basically where it started so our levels remain unchanged.

For a move to the upside we must now see this market close above 109.94. Should this occur we will look for a move into 110.31, and if momentum is very strong we could see moves to 110.78 and 111.09.

If we cannot close above 109.94, we could see a move lower into 109.21. A break below this level may result in a retest of 108.31; and any further breaks to the downside may see a bigger move and full fade into 107.75 before a pause.

 

 

COMMODITIES

GOLD – 1583 ( +13 or +0.83% )

Gold continues to consolidate in a sideways range however are the bulls getting ready to take a handle of this market?

For a continued move higher we must now see this market hold above 1574, followed by a close above 1605. A break and close above this level sets the stage for a move to 1620; and if momentum is very strong to the upside we cannot rule out a move to 1632.

If Gold cannot hold above 1574, we will look for a sharp move back down to 1525. This is a pivotal area; and any break below this level sets the stage for a much larger move down to 1504 and 1474.

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