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Market Brief – Monday 20th May 2019

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6361 (+11 or +0.17%)

The ASX remains range bound as it tests the upper end of the range. Can we break out this week?

VOLATILITY ALERTS:

Tue 11:30 – Monetary Policy Meeting Minutes
Wed 12:15 – RBA Governor Lowe Speaks

For a continued move higher we must now see the ASX hold above 6350. Should this occur we will look for a test of 6435, and if momentum to the upside is very strong we cannot rule out a move to 6500.

If the ASX cannot hold above 6350, we will look for a move back down to 6276 for strong support. A strong break and close below this level however could see the ASX retest 6180, and if downside momentum is very strong we could see a move down to 6140.

EUROPE

DAX – 12199 (+12 or +0.1%)

Like the ASX the DAX is also range bound as we head into an important week. We will be discussing this market in the LIVE CHAT ROOM this week.

VOLATILITY ALERTS:

Thu 17:30 – German Flash Manufacturing PMI, Services PMI
Thu 18:00 – German Ifo Business Climate
Thu ALL DAY – EU Parliamentary Elections
Thu 21:30 – ECB Monetary Policy Meeting Accounts
Fri ALL DAY – EU Parliamentary Elections
Sat ALL DAY – EU Parliamentary Elections

For a continued move to the upside we must see the DAX close above 12198. Should this occur we will look for a move into 12384 before a pause. If momentum is very strong we cannot rule out a blow off move to 12566 and 12750.

If the DAX fails to close above 12198, we will look for a move back down to 12044. Any break below this level however could see the DAX sell-off sharply into 11875 this week.

 

US

SP500 – 2859 (-27 or -0.94%)

The S&P failed to break below 2800 and this will be the key level to hold this week. We will be discussing this in more detail in the MEMBER PORTAL.

VOLATILITY ALERTS:

Tue 09:00 – Fed Chair Powell Speaks
Thu 04:00 – FOMC Meeting Minutes
Fri 22:30 – Core Durable Goods Orders (monthly)

For a move higher we would like to see the S&P close above 2902. Should this occur we will look for a move to 2922, and potentially 2941 again before a pause. A strong break above this level however sets the stage for a move higher into 2960 and 2985.

If we cannot close above 2902, we could see this market retest 2838.  A break of this level however may result in quick move down to 2812; and if momentum to the downside remains strong we may see a very sharp move down into 2800 and 2785.

 

FOREX

AUD/USD – 0.6867 (-133 or -1.9%)

With a win to the Coalition, Australian dollar markets are likely to gap on Monday to the upside. We will be discussing this in more detail in the MEMBER PORTAL.

VOLATILITY ALERTS:

Tue 11:30 – Monetary Policy Meeting Minutes
Wed 12:15 – RBA Governor Lowe Speaks

For a move higher, we would first like to see the AUD close above 0.6873. Should this occur we will look for a move into 0.6934, and if upside momentum remains very strong we cannot rule out a move to 0.7014 before a pause.

If the AUD cannot close above 0.6873, we will look for a move lower into 0.6825. A break and close below this level however could see a sharp decline into 0.6762.

 

EUR/USD – 1.1157 (-77 or -0.69%)

The Euro is still basing at a very big level in what will also be a very important week for this market.

VOLATILITY ALERTS:

Thu 17:30 – Flash Manufacturing PMI, Services PMI
Thu ALL DAY – EU Parliamentary Elections
Thu 21:30 – ECB Monetary Policy Meeting Accounts
Fri ALL DAY – EU Parliamentary Elections
Sat ALL DAY – EU Parliamentary Elections

For a move higher we would like to see the EURO close above 1.1197 early in the week. Should this occur we could see a retest into 1.1249 and any breaks above this level may mean a quick move into 1.1335 before a further pause.

If the EURO cannot close above 1.1197, we could see another retest down into 1.1117 before another pause. A strong break of this level may result in a move into 1.1033 before the week’s end.

 

GBP/USD – 1.2717 (-286 or -2.2%)

The Pound continues to slide south on the back of plenty of uncertainty surrounding the conservatives ability to govern.

VOLATILITY ALERTS:

Wed 18:30 – CPI (annual)
Fri 18:30 – Retail Sales (monthly)

For a continued move to the upside, we would like to see Cable close above 1.2868, followed by a retest of 1.3035 and 1.3161 before a pause. Should this occur we will look for a move to 1.3191 and 1.3277; and if momentum is very strong we could see a re-test of last week’s highs into 1.3386.

On the downside, should we fail to close above 1.2868, we will be watching the key 1.2720 level very closely. A strong break below this level however sets this market up for a bigger move down into 1.2622; and if downside momentum remains strong we could see a quick drop into 1.2480.

 

USD/JPY – 110.03 (+6 or +0.05%)

The YEN is again at the critical level of 110.00 and as such our levels remain unchanged.

For a move to the upside we must now see this market close above 110.67. Should this occur we could see a strong move into 111.09 and 111.73. A strong break and close above this level however could see the $/YEN rally into 112.22, and if momentum is extremely strong to the upside 112.68 cannot be ruled out.

If we cannot close above 110.67, we are likely to see a break of 109.94 which could see a fast move down to 109.20. If the downside remains very strong we cannot rule out a sell-off into 108.33 by the end of the week.

 

 

COMMODITIES

GOLD – 1277 (-8 or -0.62%)

Gold had every chance to rally higher last week but sellers saw that this market reverse its early gains and close lower.

For a continued move higher we must now see this market close and hold above 1278. Should this occur we will look for a retest of 1294. A strong close above this level could see further upside into 1303; and if momentum remains very strong, we could see a big push into 1313.

If Gold cannot hold above 1278, we will look for a move back down into 1260. A strong break and close below this level however could see Gold trade quickly into 1247 before a pause.

 

 

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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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