Market Brief – Monday 18th May 2015

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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

ASX – 5741  ( + 86 or + 1.52% )

The ASX broke back up above a key level of 5636 early in the week and this set the trend for the rest of the week as the ASX moved higher reaching 5756.

For the ASX to continue this strong move higher we need to see 5754 and 5790 broken early in the week with a long up bar. Once this is done with strong momentum we could see 5842 and 5892 broken before reaching 5940 which will then complete the range. If the move is strong then the ASX could extend towards 5982.

If the ASX is to restart its move back down then we need to see an early break and close back past 5715 and then 5636. If this occurs then we could see 5595 before reaching 5542.

EUROPE

DAX – 11462 ( – 238 or – 2.03% )

Another wild week for the DAX with all that is Greece is being played out in the media.

The DAX will need to catch up to the rest of the markets sooner or later. As always DON’T BLINK or you’ll miss it. We think that anything goes with the DAX at the moment.

For the upmove to continue this week we would like to see 11621 broken early in the week pushing towards 11791 and 11868 with strong momentum. This could then push the DAX back above 12015 again.

If we see continued issues with Greece and 11621 remains a strong resistance level then we could see the DAX in a bit of a Free Fall again reaching 11373 before settling near the area between 11292 – 57. If the move lower has strong momentum then the levels we will be watching closely will be 11163, 11080 and 10941 and finally 10869.

US

S&P – 2123 ( + 10 or  + 0.47% )

Deja Vue, and early shakeout and then ‘POP’ through 2112 and then some. Previously we said “It’s important to note that any drops atm are being bought back aggressively, if this continues then it supports a bullish tone.”

More than ever the S&P needs to hold 2112 before another attempt at breaking and closing past 2126 occurs. If the upward momentum is strong we could see 2137 broken with a long up bar reaching 2148. This could then lead the S&P to overextend itself towards the area between 2173 – 80.

If the S&P breaks back down past 2112 with a long down bar then 2101 could be seen very quickly. Once this occurs we could see 2085 and 2076 once again. if the downside moves become aggressive then the area between 2050 – 46 could be seen.

FOREX

AUD.USD – 8035  ( + 102 or + 1.29% )

The AUD just like many other currencies rallied strongly against the USD last week squeezing out many shorts on its way up. The one thing we have noticed is that any rally is quickly sold off indicating any one who has initiated long positions is happy to take the quick move and sell it back to the traders who are late to the party. Lets see if the push higher can be sustained??

If we see a repeat and the move higher is to continue then we would like to see 7927 hold as a strong level of support before another attempt at breaking through 8088 and 8139 is made. Once this occurs we could see the AUD extend itself towards 8284 before slowing down.

For the longer term downside move to restart we would like to see a strong down bar break past 7927 followed by a strong move past 7869 before reaching 7778 again.

EUR.USD – 11446 ( + 235 or + 2.10% )

The EUR moved higher early and did not look back as it too rallied against the USD. This time the move was strong enough to break and close past the key FICM level of 11391. Now will it hold?

For the EUR to continue its move higher we would like to see the key FICM level of 11396 now hold and become a solid level of support. Once this occurs another strong push past 11471 could help the EUR extend towards 11666 and finally settling near 11732 which would complete the range.

To see a restart of the down move then the USD needs to break the key FICM level of 11396 early in the week with a  long down bar before reaching 11315 again. Once this level is also broken the EUR could find itself back at 11166 very quickly.

GBP.USD – 15725 ( + 288 or + 1.87% )

Another 300+ point rally for the GBP breaking through the key level of 15448 with a long up bar on its way up. We will be watching this pair very closely this week as the move has extended itself.

For the GBP to continue its strong move up we would like to see an early break past 15834 before an attempt is made at breaking through our next FICM level of 15988. If so this will need to be done with a long up bar close before reaching 16030. If the upward momentum is strong then we could see the GBP extend its range reaching 16100 and possibly 16161.

For the down move to restart we would need to see an early break back down past 15644. This could be enough to bring the GBP back down towards the FICM level of 15448 where it could find some support.

USD.JPY – 11938 ( – 40 or – 0.33% )

Our Comments remain the same:

This pair is back to its old tricks as it moves sideways while any move lower is bought up quickly. We saw this last time around the 102 –  103 area just before the big move higher past 120 was made within 3 months.

This time the two levels are: 12064 upside and 11867 downside.

Therefore our comments remain the same. Be Prepared!!!!

For the USD to continue its rally we would like to see a strong long up bar break through another all important key FICM level of 12064. Once this occurs the move higher could reach 12152. If this too is broken with a long up bar then 12184 could be first on its way towards 12275.

If it’s too hard for the USDJPY to break back above 12064 and we see a restart back lower then we would like to see a strong early break past 12018 followed by a break through the area between 11977 – 45. Once this occurs we are back down near 11867.

COMMODITIES

GOLD – 1223 ( + 10 or + 0.85% )

After bouncing of our levels between 1178 – 80 we saw GOLD rally strong reaching our upper level of 1226 mentioned previously.

For the upward move to continue we would like to see another attempt at breaking through 1226 early in the week before pushing past 1241. Once this is achieved then we could see 1252 which would complete the range.

For the down move to restart 1226 needs to become a strong level of resistance before moving towards 1216 and 1208 again. Once 1208 is broken we could see 1192 and possible a full reversion back to the area between 1178 – 80.

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