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Market Brief – Monday 4th May 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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5238 ( -73 or -1.37% )

 

The ASX was again weaker last week as the market sold off aggressively on Friday. 

 

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

 

For a continued move higher we must now see the ASX close above 5408 followed by a retest into 5590. Should this occur we will look for a move into 5746, and if momentum to the upside remains strong we cannot rule out a move to 5985.

If the ASX cannot close above 5408, we will look for a move back down to 5102. A strong break and close below this level could see the ASX retest lower into 4820.

 

EUROPE

 

DAX – 10759 ( +289 or +2.76% )

 

The DAX marched higher last week despite a strong sell-off on Friday. Can this market continue higher? We will be discussing this in the MEMBER PORTAL this week.

 

VOLATILITY ALERTS:
Tue TBC – German ECB Court Ruling

 

For a move to the upside we must see the DAX close above 10760. Should this occur we will look for a retest of 11050 . If the DAX can break strongly through this level, we will look for a move into 11366.

If the DAX fails to close above 10760, we will look for a move back down to 10266 before a pause. Any break below this level however could see the DAX sell-off sharply into 10010, and if momentum is very strong to the downside we cannot rule out a move back down to 9690.

 

US

 

SP500 – 2826 ( -10 or -0.35% )

 

The S&P finished off the week slightly down coming off an important week of earnings. We will be discussing this in the MEMBER PORTAL this week.

 

VOLATILITY ALERTS:
Wed 00:00 – ISM Non Manufacturing PMI
Fri 22:30 – Non-Farm Employment Numbers

 

For a move higher, we would like to see the S&P close above 2870, followed by a retest of the key 2902 level. Should this occur and we see strong momentum, a break above this level could see the market rally strongly into 2998.

If we cannot close above 2870, we could see this market sell-off into 2780. If momentum to the downside is strong we may see a move lower into 2678; and a close below this level may result in a very fast move down to 2632 and 2478.

 

FOREX

 

AUD/USD – 0.6419 ( +24 or +0.38% )

 

The Aussie Dollar again finished the week higher but is now at a critical junction.

 

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

 

For a move higher, we would first like to see the AUD hold above 0.6282. Should this occur, we will look for a retest of 0.6456, and if upside momentum remains very strong, we may see a push higher into 0.6592 before a pause.

 

If the AUD cannot hold above 0.6282, we could see this market break lower and retest 0.6092. If momentum to the downside is very strong, a move back down to 0.5980 cannot be ruled out.

 

EUR/USD – 1.0980 ( +154 or +1.42% )

 

The EURO finished strong last week having closed at a very important. Will we see the bears defend this level or give way to a bull stampede?

 

VOLATILITY ALERTS:
Mon 19:00 – EU Economic Forecasts
Tue TBC – German ECB Court Ruling

 

For a move higher, we would like to see the EURO close above 1.1033. Should this occur, we will look for a move to 1.1117; and if momentum is very strong we cannot rule out a move to 1.1201.

 

If the EURO cannot close above 1.1033, we could see a move back down into 1.0814. If this market continues to sell-off a move lower into 1.0652 is very possible; and if momentum is very strong to the downside we could see a fast and sharp move down into 1.0525.

 

GBP/USD – 1.2493 ( +128 or +1.04% )

 

Cable has yet to break out of its tight range and we are on alert this week for a breakout. We will be discussing this market again in the LIVE CHAT ROOM this week.

 

NOTE: Friday is a public holiday in the UK

 

VOLATILITY ALERTS:
Tue 18:30 – Final Services PMI
Thu 16:00 – BoE Interest Rate Announcement

 

For a continued move to the upside, we need to see the Pound hold above 1.2480. Should this occur we may see a move into 1.2720, and if momentum is very strong we cannot rule out further upside into 1.2868.

If the Pound cannot hold above 1.2480, we could see a move lower back down to 1.2297. A break of this level however sets up for a move down to 1.2080; and if momentum to the downside is very strong 1.1896 cannot be ruled out.

 

USD/JPY – 106.88 ( -60 or -0.56% )

 

Volatility in the $/YEN remains low and we are still on alert for a bigger breakout this week. We will be discussing this in the LIVE CHAT ROOM this week. 

 

NOTE: Mon – Wed is are public holidays in Japan

 

For a move to the upside we must now see this market close above 108.31. Should this occur we will look for a retest of 109.21, and if momentum is very strong we could see a move higher into 109.94 and potentially 111.73.

 

If we cannot close above 108.31, we could see a move lower into 106.52. A break below this level may result in a sharp move lower into 105.50; and any further breaks to the downside may see a bigger move into 104.97.

 

COMMODITIES

 

GOLD – 1699 ( -27 or -1.56% )

 

Gold reversed most of the gains of the week prior however did manage to hold above the key 1687 area.

 

For a continued move higher we must now see this market hold above 1687. Should this occur we could see a retest of 1724; and any break of this level could see a stronger move into 1755 and 1786.

 

If Gold cannot hold above 1687, we will look for a move back down to 1674. A break below this level could see a move lower into 1648; and if momentum is very strong to the downside we could see a move to 1605.

 

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