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Market Brief – Monday 25th February 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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6178 (+109 or +1.8%)

The ASX continues to post new highs in 2019 as we move into a very important week for this market.

VOLATILITY ALERTS:

Wed 11:30 – Construction Work Done (quarterly)
Thu 11:30 – Private Capex (quarterly)

For a continued move higher we must now see the ASX hold above 6140 followed by a retest of 6206. Should this occur we will look for a move into 6276, and if momentum to the upside is very strong we cannot rule out a move to 6345 and 6374.

If the ASX cannot hold above 6140, we will look for a move back down to 6085 before a pause. A strong break and close below this level however could see the ASX retest 6040, and if downside momentum is very strong we could see a move down to 6002.

EUROPE

DAX – 11462 (+511 or +4.67%)

The DAX broke through key technical resistance last week and as a result saw a significant move to the upside. We will be discussing this in the LIVE CHAT ROOM this week.

VOLATILITY ALERTS:

Wed 21:00 – German Buba President Weidmann Speaks
Thu 18:00 – German Prelim CPI (monthly)

For a continued move to the upside we must see the DAX close strongly above 11566. Should this occur we will look for a move into the 11755 – 11790 area. Should this occur, we will look for a retest 11875. If momentum is very strong, a break and close above this level could see another push higher into 12054.

If the DAX fails to close above 11566, we will look for a move back down to 11362; and any strong closes below this area could see a retest of 11184. A break and close below this level could result in a further move down into 11050, and if momentum to the downside is very strong a move into 10863 cannot be ruled out.

 

US

SP500 – 2794 (+85 or +3.14%)

The S&P continues to find buyers but with a big level ahead at 2808 can this market continue higher?

VOLATILITY ALERTS:

Wed 02:00 – CB Consumer Confidence, FED Chair Powell Speaks
Thu 02:00 – FED Chair Powell Testifies
Fri 00:30 – Advance GDP (quarterly)
Fri 01:45 – Chicago PMI
Fri 12:15 – FED Chair Powell Speaks
Fri 00:30 – Retail Sales (monthly), PPI (monthly)
Sat 02:00 – IS Manufacturing PMI

For a move higher we would like to see the S&P hold above 2760. Should this occur we will look for a move into 2808 before a pause. If momentum remains strong to the upside we cannot rule out a bigger move into 2838.

If we cannot hold above 2760, we could see this market continue to sell-off into 2736 before another pause. A break of this level however may result in quick move down to 2704; and if momentum to the downside remains strong we may see a move down into 2680 and 2660.

 

FOREX

AUD/USD – 0.7128 (+39 or +0.55%)

Last week’s surprise Westpac statement interrupted the Aussie Dollar’s rally and the question now is can this market continue where it left off?We will be discussing this in the MEMBER PORTAL this week.

VOLATILITY ALERTS:

Wed 11:30 – Construction Work Done (quarterly)
Thu 11:30 – Private Capex (quarterly)

For a move higher, we would first like to see the AUD hold above 0.7113. Should this occur we will look for a move into 0.7197, and if upside momentum remains strong we will look for 0.7229 – 0.7236 before a pause.

If the AUD cannot hold above 0.7113, we will look for a move lower into 0.7014. A break and close below this level however could see a sharp decline into 0.6997. Any further breaks to the downside could then see the AUD quickly trade at 0.6958 and 0.6934; and if momentum to the downside remains strong we cannot rule out a move into 0.6830.

 

EUR/USD – 1.1332 (+9 or +0.08%)

The Euro continues to remain in a sideways range and this market should now be watched closely for a strong breakout. We will be discussing this market in detail in the LIVE CHAT ROOM this week.

VOLATILITY ALERTS:

Fri 21:00 – CPI Flash Estimate (annual)

For a 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 – 1.3055 (+114 or +0.88%)

Like the Euro, the Pound also remains in a tight sideways range. Last week buyers tried to push this market higher only to find plenty of resistance as we noted.

VOLATILITY ALERTS:

Mon 21:00 – BoE Governor Carney speaks
Tue 21:00 – Inflation Report Hearings
Fri 20:30 – Manufacturing PMI

For a continued move to the upside, we would like to see Cable hold above 1.3035 and break through 1.3161 this week. 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, if we cannot close above 1.3161 we will look for a move back down to 1.3035. A break below this level however could see this market retest 1.2868; and if momentum to the downside is strong we cannot rule out a bigger move to the key 1.2720 level and 1.2622.

 

USD/JPY – 110.65 (+90 or +0.82%)

Like other currencies the $/YEN remains in a tight wedge and we are on high alert for a breakout this week. We will be discussing this in the MEMBER PORTAL this week.

For a move to the upside we must now see this market close strongly through 111.09. Should this occur we could see a strong move into 111.73. A strong break and close above this level could then see the $/YEN rally into 112.68 by the end of this week.

If we cannot hold above 109.94, we will look for another quick retest of 109.21. A break below this level however may result in a fast move down to 108.31, and if the downside remains very strong we cannot rule out a sell-off into 107.75.

 

 

COMMODITIES

GOLD – 1327 (+13 or +0.99%)

Gold came within a few points of 1350 and we now get to see if sellers are still around.

For a continued move higher we must now see this market hold above 1321, for a retest of 1333. Should this occur we will look for a move higher into 1350; and if momentum remains very strong, we could see a big push into 1360.

If Gold cannot hold above 1321, we will look for a move back down into 1313 and 1303 before a pause. A strong break and close below this level however could send this market sharply lower back down to 1294.

 

 

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