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Market Brief – Monday 5th December 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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5448 ( -62 or -1.13% )

Last week saw CBA add to the list of major banks that raised interest rates on home loans. Is this a sign the RBA will move in the new year…? Watch this space as December is shaping up to be an interesting month.

VOLATILITY ALERT: RBA Interest Rate Announcement and Current Account on Tuesday, Quarterly GDP on Wednesday, Trade Balance on Thursday.

For a continued move to the upside we would like to see this market break above 5521. Should this occur, we will look for a move higher into 5550. 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 break 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 – 10526 ( -174 or -1.63% )

The DAX has been drifting lower for the past few weeks. Volatility has been very low in this market so BE PREPARED for a move! We will discuss this market in more detail throughout the week in our MEMBER PORTAL.

VOLATILITY ALERT: German Factory Orders on Tuesday, ECB Interest Rate Announcement  and Press Conference on Thursday.

For a continued move to the upside we would like to see the DAX break above above 10601, followed by a break above 10749. Should this occur, we may see another push higher into 10863. Further breaks of this level could see the DAX rally 10983 and if the move is very strong, 11060 cannot be ruled out.

If we fail to break 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 – 2192 ( -21 or -0.95% )

The S&P500 spent the majority of last week consolidating in a narrow sideways range, failing to close above our key level of 2194. NFP was as expected and the question now remains- will we see a 2016 Christmas rally?

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

VOLATILITY ALERT: ISM Non-Manufacturing PMI on Monday, Trade Balance on Tuesday, UoM Consumer Sentiment on Friday.

For a move higher we must now see the S&P close above 2194.Should this occur we will look for a move into 2212. A strong break and close above this level could see the S&P rally 2222, and should momentum remain strong this week we may see a quick move to 2234.

If we cannot close above 2194, we will watch for this market to retest 2176. A strong break and close below 2176 could see this market head sharply lower to 2160; and if momentum to the downside is very strong we cannot rule out a move to 2160.

 

FOREX

AUD/USD – 0.7458 ( +21 or +0.28% )

The AUD managed to finish the week slightly higher and as such our levels remain unchanged.

VOLATILITY ALERT: RBA Interest Rate Announcement and Current Account on Tuesday, Quarterly GDP on Wednesday, Trade Balance on Thursday.

For a move higher we would like to see the AUD hold above 0.7447, followed by a break and close above 0.7489. A strong break and close above this level could see a quick move to 0.7561 before a pause; and if momentum remains strong we will look for a move into 0.7617.

If we cannot hold above 0.7447, we will look for a move back down to 0.7364. A strong break below this level may result in a move back down into 0.7282 before another potential pause. Any subsequent breaks of this level however may result in a very fast move down to 0.7229.

 

EUR/USD – 1.0668 ( +69 or +0.65% )

The Italian Referendum may cause some volatility for the EURO if an unexpected result filters through. We will be covering this LIVE in our LIVE CHAT ROOM Monday morning.

VOLATILITY ALERT: EuroGroup meetings on Monday, ECOFIN Meetings on Tuesday, ECB Interest Rate Announcement  and Press Conference on Thursday.

We will be covering the ECB Rate Announcement Live in our LIVE TV.

For a sustained move higher we would now like to see this market hold above 1.0631. If we can hold above this level we will look for a move back into 1.0738, and should momentum remain strong we will be watching the key area between 1.0977 – 1.1000.

If we cannot close above 1.0738, we could see continued chop back and forth around the 1.0631 level. However should we remain below this level, our next level down is 1.0525. A strong break below that could see 1.0462 very quickly, and if momentum is strong we cannot rule out a move to 1.0424.

 

GBP/USD – 1.2726 ( +265 or +2.13% )

The Pound was the star performer amongst the majors last week rallying >2%. This market continues to fade higher and we are seeing a potential full fade of the ‘flash crash’ discussed 8 weeks ago.

VOLATILITY ALERT: Services PMI on Monday, Manufacturing Production on Wednesday.

For a continued move to the upside, we would like to see Cable remain above our key level of 1.2720. A strong break through this level could see the GBP/USD trade to 1.2853, and should momentum remain very strong we will continue to look for a strong move back into 1.3035.

On the downside, should we break and close strongly below 1.2720, we could see the GBP/USD move back into 1.2510. A break below this level may result in a move to 1.2458, and further breaks to the downside may see a sharp move into 1.2297.

 

USD/JPY – 113.50 ( +48 or +0.42% )

The USD/JPY failed to close above our key upper level at 114.52. This is a very important area to watch now. Will see a 5th week of consecutive higher prices? We will again be discussing this move this week in our MEMBER PORTAL this week.

VOLATILITY ALERT: Current Account and Final quarterly GDP on Thursday, Manufacturing Index on Friday.

For a continued move to the upside we would like to see the market close above 113.87, followed by a close above 114.52. Should this occur we could see a strong move into 115.54. If we can break above this level, we could see another push higher into 116.08 before a pause.

If however the USD/JPY cannot close above 113.87, we will look for a move back down to 111.73. A strong break below this level could see the USD/JPY trade quickly down to 111.09 again before a potential pause. Should the move to the downside remain strong, we could see a move down to 109.94.

 

COMMODITIES

GOLD – 1176 ( -8 or -0.68% )

GOLD was slightly lower last week and we will look to see if this market can consolidate again this week.

For a continued move higher we would like to see GOLD hold above 1170, followed by a retest of 1206. A strong break and close above this level could see Gold trade back to 1222, and should we break this level we could see a very strong move to 1247.

If Gold cannot hold above 1170, a strong break and close below this level could see a fast move down to 1146 before a pause. If we continue to break lower, we could see a very sharp move down to 1126 before the week’s end.

 

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The views represented on this website do not contain (and should not be construed as containing) financial advice, recommendations, opinions in relation to acquiring, holding or disposing of a financial product of any kind, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Trade View Investments accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of the above information. Consequently any person acting on it does so entirely at his or her own risk. The research does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.

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