Market Brief – Monday 25th August 2014

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.
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We may take multiple trades throughout the week and discuss in our LIVE CHAT ROOM.
Trade View has entered the weekend Net Long.

AUSTRALASIA

ASX – 5626  ( + 57 or + 1.02% )

Another strong move higher by the ASX pushing past the July highs but did not have enough to stay above them. NOTE: Bearish Divergence forming

For the up move to continue we would like to see a strong break past last weeks highs of 5684 before a further push can be made towards 5732. Once this level is reached then we will discuss the next possible extensions in our LIVE CHAT ROOM.

For the down move to restart we would like to see the Bearish Divergence take effect followed by a strong break past 5567 – 45 before a further push past 5497 is made. If the downward process is strong then we could see 5447 where the ASX could find some support.

EUROPE

FTSE – 6767 ( + 66 or + 0.98% )

The FTSE moved higher last week, in line with the rest of the world markets without the full extensions. The one thing to note is that now the FTSE is in a potential slowdown process in line with Bearish Divergence forming.

For the move higher to continue we would like to see a solid move past 6792 before attempting to reach 6816 and possibly 6851. If the momentum is strong then the FTSE might attempt at breaking the highs of 6896 formed in May 2014.

If the slowdown and Bearish Divergence take full effect then a strong break past 6738 could lead it towards the area between 6696 – 81. Once this area is broken then 6632 could be tested on its way down to 6595.

DAX – 9350 ( + 218  or + 2.39% )

The DAX rebounded more than the other major Indices with a solid push through the week. As mentioned before, if the world Indices especially the S&P breaks its all time highs then “the DAX has a long way before it catches up.” NOTE: Bearish Divergence forming

If the DAX continues higher then we would like to see a strong break with a long up bar through 9401 before reaching 9475. Once this level is reached then 9580 and 9672 could be reached next.

If the Bearish Divergence forms and the DAX moves lower then a solid break back down past 9321 could push all the way to 9201. If the downward momentum is strong then 9114 could be seen.

US

S&P – 1990 (  + 34  or  + 1.74% )

Another strong rally by the S&P reaching previous highs but did not have enough to push through to the magical 2000 on Friday night. NOTE: Bearish Divergence forming.

For the up move to continue then we would like to see 1981 become a strong support level before a strong push past 1994 is made breaching 2000. If the break past 2000 occurs early in the week with strong momentum then an extension towards 2057 is possible.

If the slowdown and Bearish Divergence take full effect then a strong break past 1981 could start a move lower reaching 1968 again. If the downward momentum is strong then 1943 and 1927 could be reached.

FOREX

AUD.USD – 9316  ( – 4  or – 0.04% )

“This pair is range bound and the 2 FICM levels we are looking for before a significant move occurs are 9203 and 9423. Until these 2 key levels are broken our comments remain the same.”

For the move higher to continue we would need to see an early break and close past 9423 and 9460 before the potential to reach 9539 could occur. Once this is reached the AUD could start a new phase and potentially new up trend.

If the USD finds strength and 9423 proves to be difficult to stay above, then a move past 9333 could reach 9287. If the downward momentum is strong then we would like to see a strong break and close past 9287 reaching 9203 were the AUD might find temporary support.

EUR.USD – 13241 ( – 158 or – 1.18% )

The EUR took another leg down last week, mainly due to USD strength.

For an upmove to restart we would like to see a strong break back up early in the week past 13329. Once this is achieved we could see 13375 – 91 area tested. If the move is strong then 13440 could be reached.

If we see continued strength in the USD and the EUR takes another leg down then 13162 could be seen before 13104 is reached. If the EUR goes into a dive then an ambitious 12949 could be reached.

GBP.USD – 16572 ( – 119 or – 0.71% )

The GBP continued lower last week, this time finding some support near the 04th April Low.

For the GBP to move higher we would like to see a solid level of support form around 16537 – 20  before a break past 16612 is achieved reaching 16662. Once this is reached then 16704 could be the difference between a rally or a continued down move.

For the GBP to take another leg lower, then we would like to see the area between 16537 – 20 broken early in the week followed by a further push past 16443 before reaching 16401. If the momentum is strong then 16364 could be reached.

USD.JPY – 10391 ( + 156  or + 1.52% )

The tug of war might be over as the USD rallied strongly last week pushing it past 104 level for the first time in 5 months. With the equity markets rallying, especially S&P, if you want to buy US stocks then you will need US Dollars.

For the USD to move higher we would like to see a strong break and close back above 10410 early in the week pushing towards 10541. Once this level is reached we will discuss in our LIVE CHAT ROOM.

If the down move restarts we would like to see an early break and close past 10356 with a long down bar before reaching 10299. Once this level is broken then 10252 could be seen followed by 10207.

COMMODITIES

GOLD – 1280 ( – 24 or – 1.84% )

With USD Dollar strength across the board GOLD moved lower breaking back down past 1300. With Event Risks popping up all over it won’t take much for GOLD to ‘POP’ again, this is why caution should be taken when trading GOLD.

For the upward move to restart we would like to see a solid break above 1287 before atempted to breach the 1293 – 95 area. Once this occurs then the area between 1306 – 12 could be seen.

If a down move continues then we would like to see a strong break and close 1274 before reaching 1264. Once this level is also broken we could see 1252.

US LIGHT CRUDE OIL – 9334 ( – 382  or – 3.93% )

I think we mentioned that OIL could go into FREE FALL, well it went into FREE FALL.

For the upmove to restart we would like to see a solid long up bar break and close past 9365 before pushing towards 9445. Once this is reached then 9522 could be see followed by 9598. If the momentum stays strong then 9699 will play a pivotal role in its next direction.

If the move lower takes another leg down then we would like to see a solid break past 9233 before reaching 9145 and possibly 9058. Did someone say FREE FALL? If 9058 is broken then we could be writing about the $85 level soon.

 

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