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Market Brief – Monday 3rd February 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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.
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UPCOMING EVENTS

FEBRUARY 2020 SYSTEMS BUILDING WORKSHOP

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INDICES

AUSTRALASIA

ASX – 6905 ( -163 or -2.31% )

 

The ASX has put in the short-term high we have been looking for and this week will be an important week for this market. We will be discussing this market this week in the LIVE CHAT ROOM

 

VOLATILITY ALERTS:
Mon 11:30 – Building Approvals
Tue 14:30 – RBA Interest Rate Announcement
Wed 12:30 – RBA Governor Lowe Speaks
Thu 11:30 – Trade Balance
Fri 09:30 – RBA Governor Lowe Speaks
Fri 11:30 – RBA Monetary Policy Statement

 

For a continued move higher we must now see the ASX holdabove 6850. Should this occur we will look for a re-test of 6905. A strong break of this level however is likely to see the ASX rally to to further all-time highs at 7011.

If the ASX cannot hold above 6850, we will look for a move back down to 6804. A strong break and close below this level however could see the ASX move lower into 6720 before a pause; and if downside momentum is very strong, we could see a move down to 6650.

 

 

EUROPE

DAX – 12932 ( -588 or -4.35% )

 

The DAX sold off aggressively on Friday following more cases of the problematic coronavirus.

 

VOLATILITY ALERTS:
Wed 23:15 – ECB President Lagarde Speaks
Thu 19:00 – ECB President Lagarde Speaks
Thu 21:00 – EU Economic Forecasts

 

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 – 3228 ( -62 or -1.88% )

 

The S&P also sold off aggressively on Friday and is now testing key areas going into an important week. We will be discussing this in the MEMBER PORTAL this week.

 

VOLATILITY ALERTS:
Tue 02:00 – ISM Manufacturing PMI
Thu 02:00 – ISM Non-Manufacturing PMI
Sat 00:30 – Non-Farm Employment – LIVE TV

 

For a move higher we would like to see the S&P close above 3248. Should this occur, we will look for a move higher into 3274. A strong break above this level however sets the stage for a move higher into 3300; and if momentum is very strong we cannot rule out a move to 3348.

If we cannot close above 3248, we could see this market move lower into 3208. A break of this level however may result in quick move down to  3166; and if momentum to the downside remains strong we may see a fast move down to 3115 and 3100. 

 

FOREX

AUD/USD – 0.6685 ( -142 or -2.08% )

The Aussie Dollar continues to remain range bound however is in a very precarious position now should it breakdown. 

 

VOLATILITY ALERTS:
Mon 11:30 – Building Approvals
Tue 14:30 – RBA Interest Rate Announcement
Wed 12:30 – RBA Governor Lowe Speaks
Thu 11:30 – Trade Balance
Fri 09:30 – RBA Governor Lowe Speaks
Fri 11:30 – RBA Monetary Policy Statement

 

For a move higher, we would first like to see the AUD close above 0.6762. Should this occur, we will look for a retest of of 0.6875, and if upside momentum remains very strong, we may see a push higher into 0.6934 before a pause.

 

If the AUD cannot close above 0.6762, we could see this market break lower and test 0.6598. If momentum to the downside is very strong, 0.6457 cannot be ruled out. 

 

 

EUR/USD – 1.1094 ( +67 or +0.61% )

The EURO was one of the few major markets to finish higher last week. Can it post back-to-back weekly gains?

 

VOLATILITY ALERTS:
Wed 23:15 – ECB President Lagarde Speaks
Thu 19:00 – ECB President Lagarde Speaks
Thu 21:00 – EU Economic Forecasts

 

For a move higher this week, we would like to see the EURO close above 1.1117; followed by a break back above 1.1197. Should this occur, we will look for a move to 1.1249 if momentum remains strong.

 

If the EURO cannot close above 1.1117, we could see a move back down into 1.1033. If this market continues to sell-off, we could see a sharp move down into 1.0977, and any further weakness may result in a much bigger move down to 1.0902.

 

 

GBP/USD – 1.3205 ( +134 or +1.03% )

The UK has officially left the EU. Now we begin the process of what happens next. We will be discussing this market exclusively in the LIVE CHAT ROOM this week.

 

VOLATILITY ALERTS:
Mon 20:30 – Final Manufacturing PMI
Wed 20:30 – Final Services PMI

 

For a continued move to the upside, we must now see Cable hold above 1.3110. Should this occur we will look for a move into 1.3277; and if momentum to the upside remains strong we cannot rule out a break of the key resistance at 1.3386.

If Cable cannot hold above 1.3110, we could see this market trade into 1.3035. A break of this level could see a quick move into 1.2868; and if momentum is very strong to the downside we cannot rule out a further move lower into 1.2720.

 

 

USD/JPY – 108.36 ( -92 or -0.84% )

They $/YEN also continues to consolidate in a narrow range and this may continue into this week.

 

For a move to the upside we must now see this market close above 109.21, on its way to retesting 109.94 before a pause. A strong break and close above this level could then see the $/YEN rally into 110.31, and if momentum is very strong we could see moves to 110.78 and 111.09.

 

If we cannot close above 109.21, we could see a fast move lower into 108.31. A break below this level may result in a retest of 107.75 before a pause. Should we break lower however, we could see a strong move down into 107.36.

 

COMMODITIES

GOLD – 1589 ( +18 or +1.15% )

Gold is attempting to break out once again but as we mentioned in Friday’s LIVE TV, this market may need more time…

 

For a continued move higher we must now see this market hold above 1574, followed by a close above 1605. A break and close above this level sets the stage for a move to 1620; and if momentum is very strong to the upside we cannot rule out a move to 1632.

 

If Gold cannot hold above 1574, we will look for a sharp move back down to 1525. This is a pivotal area; and any break below this level sets the stage for a much larger move down to 1504 and 1474.

 

 

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