Market Brief

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Is manufacturing making a comeback? With some key numbers due this week, how will markets react to the ongoing uncertainty in this sector? Click below to see what our desk thinks, and the important levels to watch this week.

Read below what our desk thinks, and the important levels to watch this week.

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes. For up to the minute market analysis see our live trading room.

INDICES

AUSTRALASIA
ASX – 6214 ( +113 or +1.85% )

The ASX continues to rally as it holds above key levels. We will be discussing the impact of this in our LIVE CHAT ROOM this week.

VOLATILITY ALERTS:
Thu 11:30 – Monetary Policy Meeting Minutes

For a continued move higher we must now see the ASX hold above 6206 followed by a push into 6250. Should this occur we will look for a move into 6266, and if momentum to the upside remains strong we cannot rule out a move to 6345 and 6434.

If the ASX cannot hold above 6206, we will look for a move back down to 6140 before a pause. A strong break and close below this level however could see the ASX retest 6000, and if downside momentum is very strong we could see a move down to 5980.

EUROPE
DAX – 12900 ( -158 or -1.21% )

The DAX managed to recover some losses on Friday yet still finished the week lower.

VOLATILITY ALERTS:
Mon 00:05 – ECB President Lagarde Speaks
Mon 23:45 – ECB President Lagarde Speaks
Fri 18:30 – German Flash Manufacturing PMI, Services PMI

For a continued move to the upside we must now see the DAX close above 12921. Should this occur, we will look for a strong move into 13333, and if momentum remains strong a push back higher into 13520.

If the DAX fails to close above 12921, we may see a move back down into the key level of 12714. A close below this level is likely to see a retest of 12566; however if momentum is very strong to the downside we cannot rule out a fast and sharp move down to 12266.

US
SP500 – 3472 ( -12 or -0.34% )

The S&P finished the week relatively flat and this week is again setting up to be a volatile week. We will be discussing this in the MEMBER PORTAL this week.

VOLATILITY ALERTS:
Mon 23:00 – FED Chair Powell Speaks
Sat 00:45 – Flash Manufacturing PMI

For a move higher we would like to see the S&P close above 3498. Should this occur, we will look for a move higher into 3560. A strong break above this level however sets the stage for a move higher into 3620; and if momentum is very strong we cannot rule out a move to 3650.

If we cannot close above 3498, we could see this market move lower into 3395. A break of this level however may result in a quick move down to 3300; and if momentum to the downside remains strong we may see a fast move down to 3274 and 3210.

FOREX

AUD/USD – 0.7077 ( -162 or -2.24% )

The Aussie Dollar continues its grind lower as the market remains under pressure below some big resistance levels.

VOLATILITY ALERTS:
Thu 11:30 – Monetary Policy Meeting Minutes

For a move higher, we would first like to see the AUD close above 0.7113. Should this occur we will look for a move into 0.7197, and if upside momentum remains very strong we cannot rule out a move to 0.7282 before a pause.

If the AUD cannot hold above 0.7113, we will look for the AUD to 0.7014. A break and close below this level however could see a sharp decline into 0.6934; and if momentum to the downside remains strong we cannot rule out a move into 0.6873.

EUR/USD – 1.1714 ( -116 or -0.98% )

The EURO was also lower last week but is clearly trying to hold its ground. We will be discussing this in the MEMBER PORTAL this week.

VOLATILITY ALERTS:
Mon 00:05 – ECB President Lagarde Speaks
Mon 23:45 – ECB President Lagarde Speaks
Fri 19:00 – Euro Area Flash Manufacturing PMI, Services PMI

For a move higher we would like to see the EURO close above 1.1738. Should this occur we could see a retest of 1.1834. A break of this level could see this market rally further to 1.1925; and if momentum is very strong, 1.2042 cannot be ruled out.

If the EURO cannot close above 1.1738, we could see a fast move down into 1.1678 before a pause. A strong break of this level may result in a move into 1.1613, however any weakness below this level could see a sharp drop into 1.1553.

GBP/USD – 1.2909 ( -136 or -1.04% )

Like the EURO, Cable remains under pressure but is now in a tight narrow range.

VOLATILITY ALERTS:
Wed 17:00 – CPI (annual)
Thu 20:25 – BoE Gov Bailey Speaks
Fri 19:30 – Flash Manufacturing PMI, Services PMI

For a continued move to the upside, we would like to see Cable close above 1.3035, followed by a retest into 1.3161 before a pause. If however momentum is very strong we may see a strong push into 1.3277.

Should we fail to close above 1.3035, we could see a move back down to 1.2867. A break below this level however could see Cable further depreciate to 1.2720 by the week’s end.

USD/JPY – 105.38 ( -23 or -0.22% )

The $/Yen was flat last week and so our levels this week remain unchanged.

For a move to the upside we must now see this market close above 105.50. Should this occur we will look for a push into 106.52, and if momentum is very strong we cannot rule out a move higher to 106.92.

If we cannot close above 105.50, we could see another move back down into 104.97. A break below this level may result in further downside to 104.02; and any further breaks to the downside may trigger a bigger move into 103.21.

COMMODITIES

GOLD – 1898 ( -32 or -1.66% )

GOLD was also relatively flat and we are on alert for a breakout this week.

For a continued move higher we must now see this market close above 1920. Should this occur we will look for a move to 1938 and 1950. A break above this level sets Gold up for retests of 2012 and 2033.

If Gold cannot close above 1920, we will look for a move back down to 1900. A break below this level could see a move lower into 1871; and if momentum is very strong to the downside we cannot rule out a sharp move down to 1850.

Additional analysis including charts available in our platform

Commentary from our trading desk – written by our Head of Trading.

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