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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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

 

AUSTRALASIA

 

ASX – 5438 ( +36 or +0.67% )

The ASX managed yet another higher close by week’s end despite it being contained within a larger range. 

VOLATILITY ALERTS:

Tue 11:30 – Monetary Policy Meeting Minutes

Thu 12:30 – RBA Governor Lowe Speaks

For a continued move higher we must now see the ASX hold above 5408 followed by a retest into 5590. Should this occur we will look for a move into 5746, and if momentum to the upside remains strong we cannot rule out a move to 5985.

If the ASX cannot hold above 5408, we will look for a move back down to 5102. A strong break and close below this level could see the ASX retest lower into 4820.

EUROPE

DAX – 10529 ( -394 or -3.61% )

The DAX was lower last week following yet another short-term high. Can this market bounce this week? We will be discussing this in the MEMBER PORTAL this week.

NOTE: Thursday is a public holiday in Germany (Ascension Day)

VOLATILITY ALERTS:

Fri 17:30 – German Flash Manufacturing, Services PMI

For a move to the upside we must see the DAX close above 10760. Should this occur we will look for a retest of 11050 . If the DAX can break strongly through this level, we will look for a move into 11366.

If the DAX fails to close above 10760, we will look for a move back down to 10266 before a pause. Any break below this level however could see the DAX sell-off sharply into 10010, and if momentum is very strong to the downside we cannot rule out a move back down to 9690.

US

SP500 – 2860 ( -77 or -2.62% )

The S&P is also now in a sideways range as markets now position for the next move in this market. Last week we asked- are the bulls or bears really in control here? We will be discussing this in the MEMBER PORTAL this week.

VOLATILITY ALERTS:

Tue 22:30 – Building Permits

Wed 00:00 – Fed Chair Powell Testifies

Thu 04:00 – FOMC Meeting Minutes

Thu 23:45 – Flash Manufacturing PMI

Fri 04:30 – Fed Chair Powell Speaks

For a move higher, we would like to see the S&P close above 2902. Should this occur we will look for a move into 2998. A strong break above this level could see this market rally strongly to 2140. 

If we cannot close above 2902, we could see this market sell-off into 2838. If momentum to the downside is strong we may see a move lower into 2780; and a close below this level may result in a very fast move down to 2678.

FOREX

AUD/USD – 0.6415 ( -115 or -1.76% )

The Aussie Dollar is also sideways and at a very important juncture.

VOLATILITY ALERTS:

Tue 11:30 – Monetary Policy Meeting Minutes

Thu 12:30 – RBA Governor Lowe Speaks

For a move higher, we would first like to see the AUD close above 0.6456. Should this occur, we will look for a retest of 0.6592, and if upside momentum remains very strong, we may see a push higher into 0.6692 before a pause.

If the AUD cannot close above 0.6456, we could see this market break lower and retest 0.6282. If momentum to the downside is very strong, a move back down to 0.6092 cannot be ruled out.

EUR/USD – 1.0819 ( -19 or -0.18% )

The EURO is testing the lower end of its sideways range with important support to watch this week.

NOTE: Thursday is a public holiday in France and Germany (Ascension Day)

VOLATILITY ALERTS:

Fri 18:00 – Euro area Flash Manufacturing, Services PMI

For a move higher, we would like to see the EURO close above 1.0902. Should this occur, we will look for a move to 1.1033; and if momentum is very strong we cannot rule out a move to 1.1117.

If the EURO cannot close above 1.0902, we could see a move back down into 1.0814. If this market continues to sell-off a move lower into 1.0652 is very possible; and if momentum is very strong to the downside we could see a fast and sharp move down into 1.0525.

GBP/USD – 1.2101 ( -305 or -2.46% )

Cable is drifting lower having broken through key levels discussing this market again in the LIVE CHAT ROOM this week.

VOLATILITY ALERTS:

Wed 16:00 – Prelim GDP (quarterly)

Thu 20:30 – BoE Governor Bailey Speaks

For a continued move to the upside, we need to see the Pound close above 1.2297. Should this occur we may see a move into 1.2480, and if momentum is very strong we cannot rule out further upside into 1.2720.

If the Pound cannot close above 1.2297, we could see a move lower back down to 1.2080. A break of this level however sets up for a move down to 1.1896; and if momentum to the downside is very strong 1.1706 cannot be ruled out.

USD/JPY – 107.09 ( +46 or +0.43% )

The $/YEN continues to travel sideways as it remains range bound. We will be discussing this in the LIVE CHAT ROOM this week. 

For a move to the upside we must now see this market close above 108.31. Should this occur we will look for a retest of 109.21, and if momentum is very strong we could see a move higher into 109.94 and potentially 111.73.

If we cannot close above 108.31, we could see a move lower into 106.52. A break below this level may result in a sharp move lower into 105.50; and any further breaks to the downside may see a bigger move into 104.97.

COMMODITIES

GOLD – 1742 ( +41 or +2.41% )

Gold is testing the upside again as it threatens to break to new multi-year highs.

For a continued move higher we must now see this market hold above 1724. Should this occur we could see a strong move to 1755; and any break of this level could see a stronger move to 1786.

If Gold cannot hold above 1724, we will look for a move back down to 1674. A break below this level could see a move lower into 1648; and if momentum is very strong to the downside we could see a move to 1605.

 

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The views represented on this website do not contain (and should not be construed as containing) financial advice, recommendations, opinions in relation to acquiring, holding or disposing of a financial product of any kind, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Trade View Investments accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of the above information. Consequently any person acting on it does so entirely at his or her own risk. The research does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.

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