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Market Brief – Monday 3rd August 2020

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5939 ( -92 or -1.53% )

The ASX has broken out of its tight sideways range but can it hold at these levels?

VOLATILITY ALERTS:
Tue 11:30 – Trade Balance
Tue 14:30 – RBA Interest Rate Announcement
Fri 11:30 – RBA Monetary Policy Statement

For a continued move higher we must now see the ASX close above 6070 followed by a push into 6140. Should this occur we will look for a move into 6206, and if momentum to the upside remains strong we cannot rule out a move to 6276.
If the ASX cannot close above 6070, we will look for a move back down to 5921 before a pause. A strong break and close below this level however could see the ASX retest 5823, and if downside momentum is very strong we could see a move down to 5746.

EUROPE

DAX – 12321 ( -509 or -3.97% )

The DAX also managed to close lower last week and is at a very key area going forward this week. We will be discussing this in the MEMBER PORTAL this week.

For a continued move to the upside we must now see the DAX close above 12566. Should this occur, we will look for a strong move into 12714, and if momentum remains strong a push back higher into 13050.

If the DAX fails to close above 12566, we may see a retest back down into the key level of 12266. A close below this level is likely to see a retest of 12166; however if momentum is very strong to the downside we cannot rule out a move to 11871.

US

SP500 – 3276 ( +65 or +2.02% )

The S&P continues its resilience in the face of plenty of uncertainty; having recovered a late week sell-off by closing at highs.

VOLATILITY ALERTS:
Tue 00:00 – ISM Manufacturing PMI
Thu 00:00 – ISM Non-Manufacturing PMI
Fri 22:40 – Non Farm Unemployment Numbers

For a move higher we would like to see the S&P hold above 3248. Should this occur, we will look for a move higher into 3308. A strong break above this level however sets the stage for a move higher into 3338; and if momentum is very strong we cannot rule out a move to 3375.
If we cannot hold above 3248, we could see this market move lower into 3208. A break of this level however may result in a quick move down to 3166; and if momentum to the downside remains strong we may see a fast move down to 3106.

FOREX

AUD/USD – 0.7142 ( +37 or +0.52% )

The Aussie Dollar was again stronger last week but are we seeing the first sign of a reversal?

VOLATILITY ALERTS:
Tue 11:30 – Trade Balance
Tue 14:30 – RBA Interest Rate Announcement
Fri 11:30 – RBA Monetary Policy Statement

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 very strong we cannot rule out a move to 0.7236 before a pause.

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

EUR/USD – 1.1773 ( +118 or +1.01% )

The EURO is also now at a very big resistance area. We will be discussing this market again in the LIVE CHAT ROOM this week.

For a move higher we would like to see the EURO hold above 1.1738. Should this occur we could see a retest of 1.1840. A break of this level could see this market rally further to 1.1925; and if momentum is very strong, 1.2048 cannot be ruled out.

If the EURO cannot hold above 1.1738, we could see a fast move down into 1.1678 before a pause. A strong break of this level may result in a move into 1.1612, however any weakness below this level could see a sharp drop into 1.1496.

GBP/USD – 1.3084 ( +290 or +2.27% )

The British Pound was also higher last week having broken the key 1.2720 level; but can it hold above here?

VOLATILITY ALERTS:
Thu 21:00 – BoE Interest Rate Announcement
Thu 21:30 – BoE Gov Bailey Speaks

For a continued move to the upside, we would like to see Cable hold above 1.3035, followed by a retest into 1.3161 before a pause. If however momentum is very strong we may see a strong push into 1.3277.
Should we fail to hold above 1.3035, we could see a move back down to 1.2867. A break below this level however could see Cable further depreciate to 1.2720 by the week’s end.

USD/JPY – 105.83 ( -29 or -0.27% )

A major reversal on Friday saw the $/YEN erase most of its losses early in the week.

For a move to the upside we must now see this market close above 105.99. Should this occur we will look for a retest of 106.52, and if momentum is very strong we cannot rule out a move all the way back up to 108.31.

If we cannot close above 105.99, we could see another move back down into 105.50. A break below this level may result in further downside to 104.97; and any further breaks to the downside may trigger a bigger move into 103.21.

COMMODITIES

GOLD – 1975 ( +74 or +3.89% )

Gold had yet another stellar move last week and has held last week’s lows firmly. We will be discussing this market exclusively in the MEMBER PORTAL this week.

For a continued move higher we must now see this market hold above 1938. Should this occur we will look for a move to 2012. A break above this level sets Gold up for moves to 2033 and potentially 2050.

If Gold cannot hold above 1938, we will look for a move back down to 1920. A break below this level could see a move lower into 1900; and if momentum is very strong to the downside we cannot rule out a sharp move down to 1871.

 

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