2019.01.21 - WMB_w

Market Brief – Monday 21st January 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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5920 ( +128 or +2.21% )

The ASX is at the big 5920 area we discussed with members on Friday. We will be discussing this key area in more detail in the LIVE CHAT ROOM this week.

VOLATILITY ALERTS:
Thu 11:00 – Unemployment Rate

For a continued move higher we must now see the ASX hold above 5823 followed by a close above 5930. A strong close above 5930 could see a move back up into 5985 , and if momentum to the upside is very strong we cannot rule out a strong reversal into 6070.

If the ASX cannot hold above 5823, we will look for a move back down to 5777 and 5746 before a pause. A strong break and close below this level however could see the ASX sell off into 5671, and if downside momentum is very strong we could see a sharp move down to 5582.

 

EUROPE

DAX – 11235 ( +342 or +3.14% )

A busy week in store for the DAX with some important economic data due this week. This market is one to watch

VOLATILITY ALERTS:
Tue 21:00 – German ZEW Economic Sentiment
Thu 19:30 – German Flash Manufacturing PMI
Thu 19:30 – German Flash Services PMI
Thu 23:45 – ECB Interest Rate Announcement – LIVE TV
Fri 00:30 – ECB Press Conference
Fri 20:00 – German Ifo Business Climate

For a continued move to the upside we must see the DAX close strongly above 11362. Should this occur we will look for a move into the 11566 before a pause. A break of this level however could result in a very strong move into 11755 – 11790 area; with a possibility of a quick move higher into 11875.

If the DAX fails to close above 11362, we will look for a quick move down to 11050. A break and close below this level could result in a very sharp move down into 10863.

 

US

SP500 – 2676 ( +81 or +3.12% )

The S&P enters its first big week of the year and we will be discussing all the events this week in the LIVE CHAT ROOM extensively.

NOTE: Monday is a public holiday in the US (Martin Luther King day)

For a move higher, we would like to see the S&P hold above 2660. Should this occur we will look for a retest of the key 2680 level. A strong break and close above this level could see another retest of 2704, and if momentum remains strong to the upside we cannot rule out moves to 2720 and 2736.

If we cannot hold above 2660, we could see this market continue to sell-off into 2638. A strong break through this level however could quickly see a move down to 2590 before a pause. If momentum to the downside is strong we may see a move lower into 2562; and a close below this level may result in a move down to 2540.

 

FOREX

AUD/USD – 0.7165 ( -48 or -0.67% )

The Aussie Dollar remained sideways last week and as such our levels remain unchanged this week.

VOLATILITY ALERTS:
Thu 11:00 – Unemployment Rate

For a move higher we would like to see the AUD close above 0.7229, followed by a break and close above 0.7282. A strong break and close above this level could see a quick move to 0.7364 before a pause; and if momentum remains strong we will look for a move back up into 0.7447.

 

If we cannot hold above 0.7229, we will look for a retest of 0.7169; however a failure at this level may result in a move back down into 0.7112 before another potential pause. Any subsequent breaks of this level however may result in a very fast move down to 0.7070.  

 

EUR/USD – 1.1363 ( -101 or -0.88% )

The Euro move to the upside is underway but can this move be sustained?

VOLATILITY ALERTS:
Thu 20:00 – Flash Manufacturing PMI
Thu 20:00 – Flash Services PMI
Thu 23:45 – ECB Interest Rate Announcement – LIVE TV
Fri 00:30 – ECB Press Conference

For a sustained move higher we would like to see the EURO close and hold above 1.1335 early in the week. Should this occur we could see a strong move into 1.1453 and any breaks above this level may mean a quick move into 1.1496 before a pause. A strong close above this level however could see the EURO rally strong into 1.1613 by the week’s end.

If the EURO cannot close above 1.1335, we could see a fast move down into 1.1249 before a pause. A strong break of this level may result in a move into 1.1201, however any weakness below this level could see a sharp drop into 1.1117 before the week’s end.

 

GBP/USD – 1.2872 ( +37 or +0.29% )

After a strong move higher into the 1.3000 handle, Cable has all but retraced this move; back to our key 1.2868 level.

VOLATILITY ALERTS:
Tue 20:30 – Unemployment Rate

For a continued move to the upside, we would like to see Cable close above 1.3035, followed by a retest of 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 could see this market retest the key 1.2720 level. 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 – 109.76 ( +121 or +1.11% )

As we mentioned in last week’s Live TV the $/YEN recovery is underway and this week will be crucial for the bulls.

VOLATILITY ALERTS:
Wed 12:30 – BoJ Interest Rate Announcement

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

If we cannot close above 111.09, we will look for another quick retest of 109.94. A break below this level however may result in a fast move down to 109.21, and if the downside remains strong we could see a strong sell-off into 108.31.

 

COMMODITIES

GOLD – 1281 ( -6 or -0.47% )

GOLD has broken down having struggled at the big 1294 level as we now approach another big area between 1276 – 1278.

For a continued move higher we must now see this market close and hold above 1294. Should this occur we will look for a retest of 1303. A strong close above this level could see further upside into 1313; and if momentum remains very strong, we could see a big push into 1322 and 1333.

If Gold cannot hold above 1294, we will look for a potential retest of the key 1276 – 1278 area. Should this level break, we could see a strong move down to 1260.

 

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