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Market Brief – Monday 21st November 2016

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5360 ( +7 or +0.13% )

The ASX ended the week pretty much where it started, and is poised to move higher provided we can break through the key 5397 area.

For a continued move to the upside we would like to see this market hold above 5294. Should this occur we could see this move head higher to retest 5397. A strong break and close above this level could see the ASX test 5437, and if momentum remains very strong we could see extended moves into 5504 and 5521.

If we fail to hold above 5294, we will be looking for a move back down to 5238. A break below this could result in a move back into 5161, and further breaks to the downside could see the ASX head to 5090. If momentum remains very strong, we cannot rule out a full fade back down to 4997.

 

EUROPE

DAX – 10663 ( -28 or -0.26% )

Like the ASX, the DAX also spent the majority of last week consolidating the big move up a from a fortnight ago.

VOLATILITY ALERT: Draghi speaks on Monday, German Flash PMI on Wednesday, Ifo Business Numbers on Thursday.

For a continued move to the upside we would like to see the DAX hold above above 10585 – 10601, followed by a break above 10749. Should this occur, we may see another push higher into 10863. Further breaks of this level could see the DAX rally 10983 and if the move is very strong, 11060 cannot be ruled out.

If we fail to hold above 10601, we will look for a move back down to 10475 and should there be further downside, we could see a move lower to 10382. Should momentum remain very strong, we will look for a move down to 10158.

 

US

SP500 – 2182 ( +17 or +0.79% )

We said a Trump win would be positive for the markets, and last week showed the first gradual push higher. Will we see all time highs this week or a pullback beforehand? We will discuss this market in more detail throughout the week in our MEMBER PORTAL.

NOTE: Friday is a public holiday (Thanksgiving Day)

VOLATILITY ALERT: Existing Home Sales on Tuesday, Durable Goods Orders and FOMC Minutes on Wednesday.

For a move higher we must now see the S&P hold above 2176. Should this occur we will look for a move back up into 2194. A strong break and close above 2194 is likely to see the S&P set its sights for 2200. If we can hold above 2200 this week, we will ultimately then look for a move to 2212.

If we cannot hold above 2176, we will watch for this market to retest 2160. A break below 2160 may see this market retest 2150, and any strong break and close below this level could see the S&P retrace back down to 2137.

 

FOREX

AUD/USD – 0.7335 ( -210 or -2.78% )

The AUD again took another hit as a strong $US hit all major USD crosses.

For a move higher we would like to see the AUD break above 0.7364, followed by a break and close above 0.7447. A strong break and close above this level could see a quick move to 0.7489 before a pause; and if momentum remains strong we will look for a move into 0.7561.

If we cannot break above 0.7364, we will look for a move back down to 0.7282. A strong break below this level may result in a move back down into 0.7229 before another potential pause. Any subsequent breaks of this level however may result in a very fast move down to 0.7169.

 

EUR/USD – 1.0587 ( -268 or -2.47% )

The EURO has also taken a nosedive and we will be watching for a potential short-term bounce this week. These are the lowest levels we have seen all year and we will be discussing this market exclusively in our LIVE CHAT ROOM.

VOLATILITY ALERT: Draghi speaks on Monday, Euro area Flash PMI on Wednesday, Ifo Business Numbers on Thursday.

For a sustained move higher we would now like to see a strong break and close above 1.0631. If we can close above this level we will look for a move back into 1.0738, and should momentum remain strong we will be watching the key area between 1.0977 – 1.1000.

If we cannot close above 1.0738, we could see continued chop back and forth around the 1.0631 level. However should we remain below this level, our next level down is 1.0525. A strong break below that could see 1.0462 very quickly, and if momentum is strong we cannot rule out a move to 1.0424.

 

GBP/USD – 1.2339 ( -258 or -2.05% )

The GBP/USD fell short of our 1.2700 target however bounced finished the week at our lower level.

VOLATILITY ALERT: Public Sector borrowing on Tuesday.

For a continued move to the upside, we would like to see Cable remain above 1.2297. Should this occur we will look for a move back up to 1.2458. A strong break through this level could see the GBP/USD trade to 1.2720, and should momentum remain very strong we cannot rule out a move to 1.2853.

On the downside, should we break and close strongly below 1.2297, we could see a potential move down to 1.2159. A strong break and close below this level may see the Pound trade back down to 1.2090, and if momentum remains strong we could see a sharp move down to 1.1981.

 

USD/JPY – 110.91 ( +428 or +4.01% )

The USD/JPY rally is full swing and we are now cautious of a potential short-term high.

NOTE: Wednesday is a Bank Holiday (Labour Thanksgiving Day)

VOLATILITY ALERT: Tokyo Core CPI on Friday.

For a continued move to the upside we would like to see the market hold above 109.94. Should this occur we will look for a continued move into 111.09 and watch this area closely. If we can break and close strongly above 111.09, we will look for a move to 111.73. A break above this level may then result in a strong move to 113.87.

If however the USD/JPY cannot hold above 109.94, we will look for a move back down to 109.21. A strong break below this level could see the USD/JPY trade quickly down to 108.31 again before a potential pause. Should we break below this level we could see continued downside pressure for the USD/JPY and quickly see moves into 107.75 and 106.30.

 

COMMODITIES

GOLD – 1208 ( -19 or -1.55% )

Like other markets GOLD is again under pressure, and is at a very key level here. Members in our MEMBER PORTAL can see this in more detail.

For a continued move higher we would like to see GOLD hold above 1206, 1247, followed by a break and close above 1222. A break and close above this level could see Gold trade back to 1257, and should we break this level we will look to 1276 before a pause.

If Gold cannot hold above 1206, a strong break and close below this level could see a fast move down to 1187 before a pause. If we continue to break lower, we will then be watching for moves to 1184 – 1180. If the downside momentum is very strong, we could see a move to 1171 before the end of the week.

 

 

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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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