16.08.29 - WMB

Market Brief – Monday 29th August 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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5508 ( -13 or -0.24% )

After an early break to the upside last week, the ASX was not able to sustain this move and has retraced back down into this sideways range.

We will be discussing this market in more detail in the LIVE CHAT ROOM this week.

VOLATILITY ALERT: Retail Sales and Private Capex on Thursday.

For a continued move to the upside we would like to see this market break and close above 5521, which has been a key level for a few weeks. Should this occur, we will look for a move higher into 5550, which is also a very key level! If the ASX can break and close strongly above 5550, we will look for a move to 5589. A strong close above this level may see the ASX rally to 5651 by the end of the week.

If we fail to close above 5521, we will look for a move back down to 5437. A break below this could result in a move back down into 5373. Further breaks to the downside could see the ASX fall aggressively back down to 5294 and the important 5248-5238 area.

 

EUROPE

DAX – 10501 ( -64 or -0.61% )

The DAX also remained in a tight range for the majority of last week and we will now look to see what this market does going into the last week of August.

VOLATILITY ALERT: Prelim CPI on Tuesday, Retail Sales on Wednesday.

For a continued move to the upside we would like to see the DAX break and close above above 10585 – 10601. Should this occur we will look for a move back up to 10749. A break past 10749 may see another push higher into 10863, and further breaks of this level could see the DAX rally 10983 and 11060.

If we fail to close 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 – 2170 ( -13 or -0.6% )

The S&P once again failed to break through our 2194 level and is now at very interesting levels. As we enter the last week of August we could see some volatility and window dressing in this market.

We will be discussing this market in more depth in the MEMBER PORTAL.

VOLATILITY ALERT: Consumer Confidence on Tuesday, Manufacturing PMI on Wednesday, NFP on Friday.

We will be covering the NFP announcement LIVE during LIVE TV on Friday.

For a move higher we must now see the S&P break 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 break above 2176, we will watch for this market to hold 2150. A break below 2150 may see this market retest the previous all-time highs at 2137. A strong break through 2137 could result in a fast move back down to 2126.

 

FOREX

AUD/USD – 0.7560 ( -65 or -0.85% )

We saw a complete reversal on Friday as the AUD was sold off on the back of $US strength.

VOLATILITY ALERT: Building Approvals on Tuesday, Retail Sales and Private Capex on Thursday.

For a move higher we would like to see the AUD break above 0.7561, followed by a break and close above 0.7617. A strong break and close above this level could then see a quick move to 0.7662 before a pause; and if momentum remains strong we will look for strong move into 0.7729.

If we cannot hold break 0.7561, we will look for a move back down to 0.7447. A strong break below this level may result in a move back down into 0.7364 before another potential pause. Any subsequent breaks of this level however may result in a very fast move down to 0.7282.

 

EUR/USD – 1.1192 ( -132 or -1.17% )

Like the AUD, the EURO was also sold off very heavily. We will be watching this market closely for potentially continued downside pressure.

VOLATILITY ALERT: German Prelim CPI on Tuesday, German Retail Sales and EU CPI Flash numbers on Wednesday.

For a sustained move higher we would like to see the EURO break above 1.1201. A break above 1.1201 may result in a retest of 1.1248, and if we continue to break higher we could see a quick move into 1.1347. Should momentum remain strong to the upside, we cannot rule out a move back up to 1.1380 this week.

If the EURO cannot close above 1.1201, we will watch for a move back down to 1.1117. A break below this level could see this market trade quickly down to 1.1083. Should we see further breaks to the downside, a move to 1.1033 cannot be ruled out; and if momentum remains very strong we could see a sharp move down to 1.0977.

 

GBP/USD – 1.3126 ( +56 or +0.43% )

The GBP started last week rallying but only managed to close 50 points higher for the week. Will we see this market continue to drift higher?

NOTE: Monday is a Bank Holiday

VOLATILITY ALERT: Manufacturing PMI on Thursday, Construction PMI on Friday

For a move to the upside we would like to see this market hold above 1.3035. If the GBP can hold this level we will look for this market to head to 1.3227. Should we see a strong break through this level we could see the GBP/USD test 1.3426 very quickly. If momentum remains very strong, a move to 1.3644 cannot be ruled out.

If we cannot hold above 1.3035, we will look for a move back down to 1.2928. A strong break below this level could see a quick leg down into 1.2720. Should we break this level we will watch for a sharp move down to 1.2510; and if momentum is very strong 1.2297 cannot be ruled out.

 

USD/JPY – 101.78 ( +159 or +1.59% )

Friday saw the $/JPY rocket higher off levels we have been talking about for months. The question now is- can the YEN sustain this move and rally, or will we see more chop and a move back down?

VOLATILITY ALERT: Household spending on Tuesday, Capital Spending on Thursday.

For a continued move to the upside we would like to see this market break above 102.29, followed by a break and close above 103.21. Should this occur we will look for move into 103.99. A strong break above 103.99 could see a move to 104.97, and if momentum remains strong we cannot rule out a sharp move higher to 106.30.

If however the USD/JPY cannot break above 102.29, we will look for a move down to 101.12 and 100.76 – 100.61. A strong break below these levels could see the USD/JPY trade quickly down to 99.90 before a pause. Should we continue to trade lower and see continued downside pressure on the USD/JPY- a sharp move to 98.22 is possible.

 

COMMODITIES

GOLD – 1321 ( -20 or -1.49% )

Gold has been under pressure but is still holding above some very key levels. The gold bulls have not disappeared just yet and all clues point to a very interesting week for GOLD this week.

For a continued move higher we would like to see GOLD break back above 1322 and more importantly 1333. If we can hold these levels we will look for a move back up to 1355. A break above 1355 could see GOLD retest the important 1375 level before another pause. This is a key area and should we see a strong close above 1375, we will look for a move to 1400.

If Gold cannot break above 1333, we will look for a move back down to 1303. A strong break and close below this level may result in a retest of 1294, and further breaks to the downside could see Gold trade retest the important 1276 level. If downside momentum continues to persist, a strong break through 1276 could see a 1257 by the end of the week.

 

 

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