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Market Brief – Monday 28th October 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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.
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UPCOMING EVENTS

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INDICES

 

AUSTRALASIA

 ASX – 6766 ( +140 or +2.11%)

The ASX continues to rally higher as we test an important area of resistance this week. We will be discussing this in the MEMBER PORTAL this week.

VOLATILITY ALERTS:
Tue 17:45 – RBA Governor Lowe Speaks
Wed 11:30 – CPI (quarterly)
Thu 11:30 – Building Approvals (monthly)

For a continued move higher we must now see the ASX hold above 6682. Should this occur, we will look for a test of 6804. If momentum to the upside continues we could see a retest of 6850, and if momentum is very strong we cannot rule out rule out a move to 7011.

If the ASX cannot hold above 6682, we will look for a move back down to 6635. A strong break and close below this level however could see the ASX retest 6544 before a pause; and if downside momentum is very strong, we could see a move down to 6435.

 

 

EUROPE

DAX – 12984 (  +236 or +1.86% )

The DAX also continues to rally as we head into what will be a very important week for the markets.

VOLATILITY ALERTS:
Wed 19:00 – German Prelim CPI (monthly)
Thu 21:00 – Euro-area CPI Flash Estimate (annual)

For a continued move to the upside we must now see the DAX close above 13050. Should this occur, we will look for a strong move into 13205, and if momentum remains strong a push back higher into 13301.

If the DAX fails to close above 13050, we may see a retest back down into the key level of 12921.A close below this level is likely to see a retest of 12714; however if momentum is very strong to the downside we cannot rule out a move to 12566.

 

US

SP500 – 3012 ( +31 or +1.04% )

After flirting with all-time highs on Friday, this week the S&P is poised for a continuation of last week’s move. We will be discussing this market in the LIVE CHAT ROOM this week.

VOLATILITY ALERTS:
Wed 01:00 – CB Consumer Confidence
Wed 23:30 – Advance GDP (quarterly)
Thu 05:00 – FOMC Interest Rate Announcement
Fri 00:45 – Chicago PMI
Fri 23:30 – Non-Farm Employment Numbers – LIVE TV
Sat 01:00 – ISM Manufacturing PMI

For a move higher we would like to see the S&P hold above 3003. Should this occur, we will look for a move to 3066. A strong break above this level however sets the stage for a move higher into 3140.

If we cannot hold above 3003, we could see this market retest 2985. A break of this level however may result in quick move down to 2960; and if momentum to the downside remains strong we may see a fast move down to 2941.

 

FOREX

 

AUD/USD – 0.6821 ( -34 or -0.5% )

The Aussie Dollar is taking a break from its recent bounce off it’s lows and the question this week is can this market break through 0.6870?

VOLATILITY ALERTS:
Tue 17:45 – RBA Governor Lowe Speaks
Wed 11:30 – CPI (quarterly)
Thu 11:30 – Building Approvals (monthly)

For a move higher, we would first like to see the AUD close above 0.6873. Should this occur, we will look for a move into 0.6934, and if upside momentum remains very strong we cannot rule out a move to 0.7014 before a pause.

 

If the AUD cannot close above 0.6873, we will look for a move lower into 0.6825. A break and close below this level however could see a sharp decline into 0.6762.

 

EUR/USD – 1.11080 (-88 or -0.79%)

All eyes are on the EURO this week with the all-important Brexit date looming. We will be discussing the significance of this exclusively in the MEMBER PORTAL.

NOTE: Friday is a public holiday in France and Italy (All Saints Day)

VOLATILITY ALERTS:
Wed 19:00 – German Prelim CPI (monthly)
Thu 21:00 – Euro-area CPI Flash Estimate (annual)

For a move higher this week, we would like to see the EURO hold above 1.1033; followed by a break back above 1.1197. Should this occur, we could then see a move to 1.1249 before a pause. 

If the EURO cannot hold above 1.1033, we could see a move down into 1.0977 before a pause. If this market continues to sell-off, we could see a move down into 1.0902; however any break of this level may result in a sharp move down to 1.0814 before the week’s end.

GBP/USD – 1.2829 ( -132 or -1.02% )

With four days to go until the end of the month, this week is all about Cable and the UK Parliament. Throughout the week we will be covering BREXIT commentary exclusively in detail in the MEMBER PORTAL.

VOLATILITY ALERTS:

Tue TBC – Brexit Parliamentary Vote
Fri 20:30 – Manufacturing PMI

For a continued move to the upside, we would like to see Cable close above 1.2868, followed by a retest of 1.3035 and 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 will be watching the key 1.2720 level very closely. 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 – 108.66 ( +26 or +0.24% )

The $/YEN is also poised for a breakout this week having spent the majority of last week consolidating in a tight sideways range.

VOLATILITY ALERTS:

Tue 12:30 – BoJ Interest Rate Announcement

For a move to the upside we must now see this market hold above 108.31, on its way to retesting 109.21 before a pause. A strong break and close above this level could then see the $/YEN rally into 109.94, and if momentum is very strong we could see moves to 110.31 and 110.78.

If we cannot hold above 108.31, we could see a fast move lower into 107.75. A break below this level may result in a retest of 107.36 and this is where things get very interesting. A break below this level could mean a very sharp move down to 106.52.

 

COMMODITIES

 

GOLD – 1504 ( -14 or -0.94% )

Gold continues to form a base and once again is now in a precarious position.

For a continued move higher we must now see this market close above 1505. Should this occur, we will look for a move to 1526 ; and if momentum remains very strong, a strong break above this level could see Gold rally quickly into 1540 and 1552.

If Gold cannot close above 1505, we will look for a move back down into 1480. A strong break and close below this level could send this market lower into 1470, and if momentum is strong to the downside we cannot rule out a move lower into 1450.

 

 

 

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