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Market Brief – Tuesday 26th Apr 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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5252 ( +93 or +1.8% )

The rally we’ve seen over the past fortnight has come to a pause very close to last week’s levels. With little data out this week we will continue to look to other global markets for potential ASX direction.

NOTE: Monday is a public holiday- ANZAC Day.

For as continued move to the upside we like to see this market hold above 5238. Should we hold above this level we could see a quick move to 5294. A continued rally could then see this move head to 5372 before another pause. If momentum remains strong we could see an extended move into 5403.

If we fail to hold above 5238, we will be looking for a move back down to 5161; and a break below this could result in a move back into 5090. A strong break and close below 5090 could see a quick move back down to 4997.

 

EUROPE

DAX – 10401 ( +363 or +3.62% )

The DAX finally broke through the big 10100 area and did not look back. We will be discussing this market in more detail in our LIVE CHAT ROOM.

VOLATILITY ALERT: Unemployment on Thursday, Retail Sales on Friday, CPI on Friday.

For a continued move to the upside we would like to see the DAX hold above above 10289 and ideally 10382. If so we could see the DAX really take off- making fast moves to 10585 – 10601 before a pause. If momentum is VERY strong we would not rule out an explosive move to 10863.

If we fail to hold above 10289, we will look for a move back down to 10158. A close below this level may result in a move down 10013 and should this level fail, we could see a move back down into to 9907. A strong break below this level could see the DAX trade all the way back down to 9822; and if momentum remains strong we would not be surprised to see a move back down to 9620.

 

US

SP500 – 2081 ( +11 or +0.53% )

This week is a very big week on the US economic calendar with plenty of data being released and a slew of S&P500 companies reporting. It is the busiest week in the Q1 Earnings Season.

We will be covering this market in detail in our MEMBER PORTAL.

VOLATILITY ALERT: CB Consumber Confidence on Wednesday, FOMC interest rate on Thursday, quarterly GDP on Friday

For a move higher we would like to see a the S&P hold above 2076. Should this occur we will look for a move back up into 2097. A strong break and close above 2097 may likely result in a move to 2106 and 2112 before another pause. If momentum remains strong, a break above 2112 could see the S&P quickly test 2126 and then on it’s way to test the all-time high at 2137.

If we cannot hold above 2076, we will watch for a move back down into 2054 before a pause. A strong break and close below this level could see the S&P head back down into the important 2040 area; and if momentum to the downside remains strong we could see a very fast move down into 2019.

 

FOREX

AUD/USD – 0.7723 ( -14 or -0.18% )

The $AUD broke to the upside early in the week only to find resistance right at our 0.7833 level! It then retraced most of its gains to finish largely unchanged.

NOTE: Monday is a public holiday.

VOLATILITY ALERT: Quarterly CPI on Wednesday, Quarterly PPI on Friday.

For a move higher we would like to see the AUD hold above 0.7662, followed by a break and close above 0.7729. A strong break and close above this level we could see a very strong push up to 0.7833; and if momentum remains strong we will then be looking for 0.7903.

If we cannot hold above 0.7662, we will look for a move back down to 0.7561. A break below this level may result in a move back down into 0.7489 and 0.7447. A subsequent break of this level may then result in a move back down to 0.7389 before a pause.

 

EUR/USD – 1.1282 ( -60 or -0.53% )

Last week Draghi announced the ECB will expand its QE program 80billion in bond purchases p/month (up from the previous 60 billion). This will not end anytime soon and we have mentioning all along- don’t fight the central banks!

VOLATILITY ALERT: CPI on Friday.

For a sustained move higher we would like to see a break and close above 1.1249, followed by a quick move to test 1.1347. A strong break and close above these levels could see the EURO head to 1.1385. Should we break this level we could see a quick move to 1.1435 and 1.1496 before a pause. If momentum remains very strong and we break and close above 1.1496, we could see a final push to test 1.1613.

On the downside, should we hold below 1.1248 we may see a move back down to 1.1201. Should the EURO continue to taper off, a break below this level may result in quick moves down to 1.1163 and 1.1117 before a pause. If 1.1117 is broken, we will look for the EURO to move back down to 1.1033 and 1.0977.

 

GBP/USD – 1.4199 ( +200 or +1.41% )

The GBP continued to gain strength for the second week straight, in what is still a larger sideways consolidation.

VOLATILITY ALERT: GDP on Wednesday.

For a move to the upside we would like to see a strong break through 1.4469. A break and close above this level may likely result in a move to 1.4589 before a pause. If momentum remains strong, we will look for moves into 1.4630 and 1.4748. Should we break strongly above 1.4748, we will not rule out a move into 1.4896 by the end of the week.

If we cannot hold above 1.4469, we will look for moves down into 1.4382 and 1.4194. Further breaks below this level may likely see a move down into 1.4041 and 1.4006. If momentum to the downside persists, we could see a strong move down into 1.3937, and should this downside momentum continue we will look for a final move into 1.3853.

 

USD/JPY – 108.74 ( +304 or +2.8% )

Members who joined us for our Live TV broadcast on Friday @ 2pm witnessed us detail the potential for a huge move the upside. 15 minutes later the BoJ announced the possibility for further bank subsidisation and the USD/JPY took off like a rocket!

This week we will be watching the FOMC closely and listening to Kuroda closely but our stance remains the same- don’t fight the BoJ!

We will be covering these events LIVE in more detail in our LIVE CHAT ROOM.

VOLATILITY ALERT: CPI on Thursday, BoJ Monetary Policy on Thursday.

For a continued move to the upside we would now like to see the market hold above 111.09. Should this occur we will then be looking for a move into 112.55. A strong break and close above 112.55 could then see a quick move into 112.88 before a pause. If we can break strongly above 112.88 we could see a very quick move into 113.87.

If however the USD/JPY cannot hold above 111.09, we will look for a move down to 109.94. A break below this level could see the USD/JPY trade quickly down to 109.21 again before a potential pause. Should we break below this level we could see continued downside pressure for the USD/JPY- and quickly see a move back down to 108.31.

 

COMMODITIES

GOLD – 1233 ( -1 or -0.08% )

Another volatile week for GOLD saw it start the week strong only to fall and finish basically flat last week. As such, our comments remain unchanged. Gold has been in a tight range for 3 weeks and we are expecting a breakout soon.

For a continued move higher we would like to see 1222 hold as support, followed by a break and close through 1247. Should this occur we could see a strong move to 1258, and a break of this level could see a move into 1276 before another pause. If momentum to the upside remains very strong we will watch for a fast move to 1294.

If Gold cannot hold above 1222, we will look for a move back down to 1206. A strong break and close below this level we could see Gold trade back down to 1187 and 1181 before the end of the week.

 

 

 

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