WEEKLY MARKET BRIEF - 1st JUNE 2020

Market Brief – Monday 1st June 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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5718 ( +147 or +2.64% )

 

The ASX came into important resistance last week and the question now is can this market break higher? 

 

VOLATILITY ALERTS:
Tue 11:30 – Current Account
Tue 14:30 – RBA Interest Rate Announcement
Wed 11:30 – GDP (quarterly)
Thu 11:30 – Trade Balance

 

For a continued move higher we must now see the ASX close above 5746 followed by a move higher into 5985. Should this occur we will look for a move into 6020.

If the ASX cannot close above 5746, we will look for a move back down to 5590. A strong break and close below this level could see the ASX move lower into 5408; and any break of this level could see a sharp retest lower into 5102.

 

EUROPE

 

DAX – 11675 ( +548 or +4.92% )

 

The DAX also posted another strong week as it continues to rally with the COVID situation improving. We will be discussing this in the MEMBER PORTAL this week.

 

NOTE: Monday is a public holiday in Germany (Whit Monday)

 

VOLATILITY ALERTS:
Thu 21:45 – ECB Interest Rate Announcement
Thu 22:30 – ECB Press Conference

 

For a move to the upside we must see the DAX close above 11755. Should this occur we will look for a retest of 11875. If the DAX can break strongly through this level, we will look for a move into 12115 and if momentum is very strong we cannot rule out a strong move to 12384.

If the DAX fails to close above 11755, we will look for a move back down to 11366 before a pause. Any break below this level however could see the DAX sell-off sharply into 11050, and if momentum is very strong to the downside we cannot rule out a move back down to 10735.

 

US

 

SP500 – 3059 ( +99 or +3.34% )

 

The S&P was also higher last week but like other markets also faces important resistance going into this week.

 

VOLATILITY ALERTS:
Tue 00:00 – ISM Manufacturing PMI
Thu 00:00 – ISM Non-Manufacturing PMI
Fri 22:30 – Non-Farm Employment Numbers

 

For a move higher, we would like to see the S&P hold above 2998. Should this occur we will look for a move into 3140. A strong break above this level could see this market rally strongly to 3210. 

If we cannot hold above 2998, we could see this market sell-off into 2902. 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 – 0.6666 ( +132 or +2.02% )

 

The Aussie Dollar remains in and out of the key 66c as stated last week and this is the area to watch this week.

 

VOLATILITY ALERTS:
Tue 11:30 – Current Account
Tue 14:30 – RBA Interest Rate Announcement
Wed 11:30 – GDP (quarterly)
Thu 11:30 – Trade Balance

 

For a move higher, we would first like to see the AUD hold above 0.6592. Should this occur, we will look for a retest of 0.6692, and if upside momentum remains very strong, we may see a push higher into 0.6873 before a pause.

 

If the AUD cannot hold above 0.6592, we could see this market break lower and retest 0.6456. A close below this level could see a move to 0.6282; and if momentum to the downside is very strong, a move back down to 0.6092 cannot be ruled out.

 

EUR/USD – 11100 ( +197 or +1.81% )

 

The EURO has also come into very strong resistance and we will be watching this market closely this week heading into the ECB announcement.

 

NOTE: Monday is a public holiday in Germany and France (Whit Monday), Tuesday is a public holiday in Italy (National Day)

 

VOLATILITY ALERTS:
Thu 21:45 – ECB Interest Rate Announcement
Thu 22:30 – ECB Press Conference

 

For a move higher, we would like to see the EURO hold above 1.1033. Should this occur, we will look for a move to 1.1117; and if momentum is very strong we cannot rule out a move to 1.1249.

 

If the EURO cannot hold above 1.1033, we could see a move back down into 1.0902. If this market continues to sell-off a move lower into 1.0814 is very possible; and if momentum is very strong to the downside we could see a fast and sharp move down into 1.0652.

 

GBP/USD – 1.2346 ( +182 or +1.5% )

 

Cable is now back in its sideways range having put in a short-term low. We will be discussing this market again in the LIVE CHAT ROOM this week.

 

For a continued move to the upside, we need to see the Pound hold 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 hold 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 – 107.77 ( +17 or +0.16% )

 

The $/YEN finished the week flat and as such our levels remain unchanged. 

 

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 – 1729 ( -6 or -0.35% )

 

Gold is setting a very key base above 1700. Can this market continue to rally higher?

 

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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