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Market Brief – Monday 18th February 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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.
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INDICES

AUSTRALASIA

ASX – 6069 (+44 or +0.72%)

The ASX continues its move to the upside and has finished in positive territory for the second straight week.

VOLATILITY ALERTS:

Tue 11:30 – Monetary Policy Meeting Minutes
Wed 11:30 – Wage Price Index
Thu 11:30 – Unemployment Rate
Fri 09:30 – RBA Governor Lowe Speaks

For a continued move higher we must now see the ASX hold above 6070 followed by a push into 6140. Should this occur we will look for a move into 6206, and if momentum to the upside remains strong we cannot rule out a move to 6276.

If the ASX cannot hold above 6070, we will look for a move back down to 6040 before a pause. A strong break and close below this level however could see the ASX retest 5985, and if downside momentum is very strong we could see a move down to 5921.

EUROPE

DAX – 10951 (+371 or +3.38%)

With the DAX rallying over 300 points on Friday, this market is now in a position to post new highs for the year. We will be discussing this in the LIVE CHAT ROOM this week.

VOLATILITY ALERTS:

Tue 21:00 – German ZEW Economic Sentiment
Thu 19:30 – German Flash Services PMI, Manufacturing PMI
Thu 23:30 – ECB Monetary Policy Accounts
Fri 20:00 – German Ifo Business Climate
Sat 02:30 – ECB President Draghi Speaks

For a continued move to the upside we must see the DAX close strongly above the 11050. Should this occur and if the DAX can hold above this level, we will look for a retest of the important 11366 level.

If the DAX fails to close above 11050, we will look for a move back down to 10863 before a pause. Any break below this level however could see the DAX sell-off sharply into 10601, and if momentum is very strong to the downside we cannot rule a move into 10382.

 

US

SP500 – 2709 (+68 or +2.51%)

The S&P continues to post the strongest recovery and is now coming into a very big area at 2808.

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

VOLATILITY ALERTS:

Thu 06:00 – FOMC Meeting Minutes
Fri 00:30 – Core Durable Goods Orders (monthly)

For a move higher, we would like to see the S&P hold above 2760. Should this occur we will look for a retest of the important level at 2808. A strong break and close above this level could however see this market rally quickly into 2838 before the week’s end.

If we hold above 2760, we will look for a move back down into 2738. A strong break below this level could see this market sell off sharply into 2694 before a pause; and any subsequent breaks lower could see the S&P trade back down to 2677 and 2660 if the downside momentum is strong

 

FOREX

AUD/USD – 0.7139 (+50 or +0.70%)

Last week we stated the Aussie Dollar was back down at support and we saw this last week. We will be discussing this in the MEMBER PORTAL this week.

VOLATILITY ALERTS:

Tue 11:30 – Monetary Policy Meeting Minutes
Wed 11:30 – Wage Price Index
Thu 11:30 – Unemployment Rate
Fri 9:30 – RBA Governor Lowe Speaks

For a move higher, we would first like to see the AUD hold above 0.7113. Should this occur we will look for a move into 0.7197, and if upside momentum remains strong we will look for 0.7229 – 0.7236 before a pause.

If the AUD cannot hold above 0.7113, we will look for a move lower into 0.7014. A break and close below this level however could see a sharp decline into 0.6997. Any further breaks to the downside could then see the AUD quickly trade at 0.6958 and 0.6934; and if momentum to the downside remains strong we cannot rule out a move into 0.6830.

 

EUR/USD – 1.1292 (-31 or -0.27%)

The Euro continues to find support at our key levels with 1.1249 again proving difficult for the bears. We will be discussing this market in detail in the LIVE CHAT ROOM this week.

VOLATILITY ALERTS:

Thu 20:00 – Euro area Flash Services PMI, Manufacturing PMI
Thu 23:30 – ECB Monetary Policy Accounts
Sat 02:30 – ECB President Draghi Speaks

For a move higher we would like to see the EURO close and hold above 1.1335 early in the week. Should this occur we could see a strong move into 1.1453 and any breaks above this level may mean a quick move into 1.1496 before a pause. A strong close above this level however could see the EURO rally strong into 1.1613 by the week’s end.

If the EURO cannot close above 1.1335, we could see a fast move down into 1.1249 before a pause. A strong break of this level may result in a move into 1.1201, however any weakness below this level could see a sharp drop into 1.1117 before the week’s end.

 

GBP/USD – 1.2888 (-53 or -0.41%)

The Pound could be due for a quiet week this week however any news of Brexit could bring volatility back in a big way.

VOLATILITY ALERTS:

Tue 20:30 – Unemployment Rate

For a continued move to the upside, we would like to see Cable close above 1.3035, followed by a retest of 1.3161 before a pause. Should this occur we will look for a move to 1.3191 and 1.3277; and if momentum is very strong we could see a re-test of last week’s highs into 1.3386.

On the downside, should we break and close strongly below 1.2868, we could see this market break quickly lower into 1.2720. A strong break below this level however sets this market up for a bigger move down into 1.2622.

 

USD/JPY – 109.75 (+68 or +0.62%)

The $/YEN has finally cleared 109.94 only to find resistance at another big level at 111.09. But is this the last we have seen of 109.94..? We will be discussing this in the MEMBER PORTAL this week.

For a move to the upside we must now see this market hold above 109.94. Should this occur we will look for a retest of 111.09. A strong break and close above this level could then see the $/YEN rally into 111.73, and if momentum is extremely strong to the upside 112.68 cannot be ruled out.

If we cannot hold above 109.94, we will look for another quick retest of 109.21. A break below this level however may result in a fast move down to 108.31, and if the downside remains very strong, we cannot rule out a sell-off into 107.75.

 

 

COMMODITIES

GOLD – 1321 (+7 or +0.53%)

Gold is testing another big resistance area here at 1321 and is showing continued signs of a move higher.

For a continued move higher we must now see this market close above 1321. Should this occur we will look for a move into 1333, and if momentum remains very strong, we could see a big push into 1350.

If Gold cannot close above 1321, we will look for a move back down into 1313 and potentially 1303. A break below this level however sets the stage for a bigger move into 1294 if momentum to the downside is strong.

 

 

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