Trade View Market Brief - 19th February 2018

Market Brief – Monday 19th February 2018

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5899 ( +156 or +2.72% )

The ASX has staged a mini-recovery and is now at an important inflection point. Will this market rally higher? We will be discussing this in more detail in the MEMBER PORTAL.  

VOLATILITY ALERTS:
Tue 11:30 – Monetary Policy Minutes
Wed 11:30 – Construction Work Done (quarterly)

For a continued move higher we must now see the ASX close and hold above 5921. Should this occur we will look for a move to 5985. A break through this level could see a retest of 6000; and if momentum is very strong we cannot rule out a move to 6140.

If the ASX cannot hold above 5921, we will look for a move back down to 5823. A strong break and close below this level could see the ASX test 5777, and if momentum is strong we could quickly see further moves down to 5746 and 5705.

 

EUROPE

DAX – 12486 ( +269 or +2.2% )

One up, one down. That was the story of last week for the DAX. This week will be a key week for this market yet again.

VOLATILITY ALERTS:
Tue 21:00 – German ZEW Economic Sentiment
Wed 19:30 – German Flash Manufacturing PMI
Wed 19:30 – German Flash Services PMI
Thu 20:00 – German Ifo Business Climate

For a continued move to the upside we must now see the DAX break and close above 12566. Should this occur we will look for a retest of 12714. A strong break of this level could see the DAX rally quickly to 12783; and if momentum is very strong we will look for a move to 12847.

If the DAX fails to close above 12566, we will look for a move back down to 12384 before another pause. A close below this level however could see the DAX sell-off sharply into 12198 and if momentum is very strong to the downside 12115.

 

US

SP500 – 2736 ( +114 or +4.35% )

The S&P continued to trade higher and for the second straight week the US continues to recover faster than other global equity markets. We will be discussing the impact of this in the LIVE CHAT ROOM this week.

NOTE: Monday is a public holiday in the US (Presidents Day)

VOLATILITY ALERTS:
Thu 02:00 – Existing Home Sales
Thu 06:00 – FOMC Minutes

For a move higher we would like to see the S&P hold and close above 2736. Should this occur we will look for a move back up into 2774. A strong break and close above this level could see a retest of 2800, and if momentum remains strong to the upside 2812 and 2820 cannot be ruled out.

If we cannot hold above 2736, we will look for a move back down to 2700. A break below this level may result in a move down to 2660, and any continued weakness could see a further sell-off into 2628. If momentum is very strong to the downside we cannot rule out a  move to 2588.

 

FOREX

AUD/USD – 0.7912 ( +104 or +1.33% )

The Aussie Dollar was steadily higher as risk has come back into the markets. Is this move showing signs that it’s over, or is the rally just getting started? We will be discussing this market in more detail in the LIVE CHAT ROOM.

VOLATILITY ALERTS:
Tue 11:30 – Monetary Policy Minutes
Wed 11:30 – Construction Work Done (quarterly)

For a move higher we must now see this market hold above 0.7903, followed by a strong break and close above 0.7934. Should this occur we will look for this market to test 0.7988. A strong break and close above 0.7988 could see this market post further gains into 0.8034.

If we cannot hold above 0.7903, we could see the AUD retest 0.7833. Should we break lower however, we will look for a move back into 0.7779 and if downside momentum continues we could see 0.7729 quickly before another pause.

 

EUR/USD – 1.2410 ( +159 or +1.3% )

Like other markets the EURO has maintained its sideways consolidation and is now at a very key level.

VOLATILITY ALERTS:
Wed 20:00 – Flash Manufacturing PMI
Wed 20:00 – Flash Services PMI
Thu 23:30 – ECB Monetary Policy Minutes
Fri 21:00 – Final CPI (annual)

For a move higher we would like to see the EURO break and close above the very important 1.2520 level, followed by a strong push into 1.2605 before another pause. Should this occur we could then see a very strong rally into 1.2769.

If the EURO cannot close above 1.2520, we could see a move back down to retest 1.2360. A close below this level is then likely to see a retest of the key level at 1.2268 before a pause. A strong break below this level may result in another move lower into 1.2167 and if momentum is very strong, we cannot rule out a big move lower into 1.2042.

 

GBP/USD – 1.4025 ( +199 or +1.44% )

Like the EURO the Pound is also in a sideways consolidation; however like other markets has also managed to recover rallying 200 points last week.

VOLATILITY ALERTS:
Tue 05:45 – BoE Governor Carney Speaks
Wed 20:30 – Unemployment Rate
Thu 20:30 – Second GDP Estimates (quarterly)
Thu 20:30 – Prelim Business Investment (quarterly)

For a move to the upside we would like to see hold above 1.3875, on its way to retesting 1.4075. A close above this level may then see another retest of 1.4194; and should momentum remain strong to the upside, we could see a move into 1.4223 by the week’s end.

If we cannot hold above 1.3875 we could see a quick move down into 1.3743 – 1.3725 before a pause. A continued sell-off may see another move lower into 1.3683, with a strong break below these levels meaning cable may trade down into 1.3534.

 

USD/JPY – 106.29 ( -249 or -2.29% )

The $/YEN is now attempting to stage a reversal. Will we see a bounce higher this week or is there more downside left for this market? We will be discussing this market in more detail in the LIVE CHAT ROOM.

VOLATILITY ALERTS:
Mon 10:50 – Trade Balance
Wed 11:30 – Flash Manufacturing PMI

For a continued move to the upside we would now like to see the market close above 106.30 and close above 107.75. Should this occur we will then be looking for a move into 108.31. A strong break and close above 109.21 could then see a quick move into 109.94 before a pause. If we are to see a complete V-reversal and fade to the upside this week, we will not rule out a move to 111.09 by the end of the week.

If however the USD/JPY cannot hold above 106.30, we will look for a retest of 105.79. A break below this level could see the USD/JPY trade quickly down to 104.97 before a potential pause. Should we continue to trade lower and see continued downside pressure on the USD/JPY- a sharp move to 103.99 is possible.

 

COMMODITIES

GOLD – 1347 ( +32 or +2.43% )

GOLD has once again come into our key area at 1355 and found sellers. Is this the week we finally break higher or will we now see a run on the precious metal?

For a continued move higher we must now see this market break and close above 1356. Should this occur we will look for a move into 1365, and a close above this level could see further upside into 1371 and 1375. If momentum remains very strong, a blow-off move to 1393 cannot be ruled out.

If Gold cannot close above 1356, we will look for a strong move back down into 1333-1335. A strong break below this level could see GOLD sell off further into 1322, and if momentum is strong to the downside we could see a sharp move down into 1303.

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