16.05.09 - WMB_w

Market Brief – Monday 9th May 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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5294 ( +49 or +0.93% )

After some big moves to the upside early last week, the ASX retraced most of its gains but closed strong on Friday.

For a continued move to the upside we would like to see this market hold above 5238 and break strongly through 5294. Should this occur we may see a continued rally could then see this move head to 5372 and 5390 before another pause. If momentum remains very strong we could see an extended move into 5487.

If we fail to hold above 5238, we will be looking for a move back down to 5161; and a break below this could result in a move back into 5090. A strong break and close below 5090 could see a quick move back down to 4997.

 

EUROPE

DAX – 9918 ( -154 or -1.53% )

The DAX continued to pile off last week however we saw a very interesting reversal at the key 9800 area.

VOLATILITY ALERT: Quarterly GDP on Friday.

For a continued move to the upside we would like to see the DAX hold above above 9822, on its way to retesting 10013. A strong break and close above this level could see the DAX really take off- making fast moves to 10158; and if momentum remains strong we could see a quick move into 10337 and 10382 before a pause.

If we fail to hold above 9822, we will look for a move back down into the 9620. A strong break below this level could see the DAX trade all the way back down to 9560; and if momentum remains strong we would not be surprised to see a move back down to 9386.

 

US

SP500 – 2058 ( -9 or -0.44% )

Last week’s weak NFP numbers ensured the S&P remained virtually unchanged for the week. We have said this before: When a market does not fall on bad numbers, maybe things are better than we think…?

We will be providing live coverage of this market in our LIVE CHAT ROOM.

VOLATILITY ALERT: Retail Sales and Consumer Sentiment on Friday.

For a move higher we would like to see a the S&P hold above 2054. Should this occur we will look for a move to test 2076-2079 before a pause. A strong break above 2079 could see a very fast move to retest 2097, and if momentum remains strong we will look for an additional push into 2106 and 2112 again.

If we cannot close above 2079, we may see a move back down to 2054. A break below 2054 may result in a move back down to 2040; and should momentum to the downside continue we will look for a move back down to 2019. If there is a larger sell-off this week, 2002 cannot be ruled out.

 

FOREX

AUD/USD – 0.7366( -240 or -3.16% )

The RBA finally cut interest rates last Tuesday which kicked off a week of heavy selling, and we are now at some interesting levels.

VOLATILITY ALERT: Mortgage Lending on Wednesday.

For a move higher we would like to see the AUD break above 0.7364, followed by a break and close above 0.7447. A strong break and close above this level could then see a quick move to 0.7489 before a pause; and if momentum remains strong we will look for a move into 0.7561.

If we cannot break above 0.7364, we will look for a move back down to 0.7282. A strong break below this level may result in a move back down into 0.7229 before another potential pause. Any subsequent breaks of this level however may result in a very fast move down to 0.7169.

 

EUR/USD – 1.1403 ( -43 or -0.38% )

The Euro topped right at our 1.1613 level last week and has since fallen for 4 consecutive days. We are watching this market closely now as recent volatility has been [historically] low, and we expect higher volatility to return soon.

We will be providing live coverage of this market in our MEMBER PORTAL.

VOLATILITY ALERT: Eurogroup meetings on Monday, Quarterly GDP on Friday.

For a sustained move higher we would like to see a break and close above 1.1453. Should we break this level we will look for a move to 1.1496; and if this rally continues we could then see a very quick move to test 1.1613. Should momentum remain very strong, we could see a big push into 1.1747.

If we cannot break 1.1453 we will look for a move back down to 1.1385. A strong break and close below this level may likely result in a move to 1.1347, and if momentum remains strong we will look for a move to 1.1249. If a larger sell-off ensues, we will be watching 1.1201 and 1.1163.

 

GBP/USD – 1.4429 ( -182 or -1.25% )

Like the EURO the GBP/USD put in a big reversal last week and is also at some interesting levels.

VOLATILITY ALERT: Manufacturing Production on Wednesday, BoE Cash Rate on Thursday.

For a move to the upside we would like to see a strong break through 1.4469. A break and close above this level may likely result in a move to retest 1.4630 and 1.4691. If momentum remains very strong, we cannot rule out a move into 1.4790.

If we cannot close above 1.4382, we will look for a move back down into 1.4309 before a pause. A strong break and close below this level will likely result in a move to 1.4223; and if the move to the downside is very strong we will watch for a move all back down to 1.4041.

 

USD/JPY – 107.10 ( +77 or +0.72% )

The USD/JPY was very quiet last week as Japan was closed for 3 trading sessions. Will we see some big moves this week???

We will be discussing this market exclusively in our LIVE CHAT ROOM.

VOLATILITY ALERT: Monetary Policy minutes on Monday, Current Account on Thursday.

For a continued move to the upside, we would like to see the market continue to hold above 106.30, and close above 107.75. Should this occur we will look for a move into 108.31. A strong break and close above 109.21 could then see a quick move into 109.94 before a pause. If we are to see a complete V-reversal and fade to the upside this week, we will not rule out a move to 111.09 by the end of the week.

If however the USD/JPY cannot hold above 106.30, we will look for a move down to 105.79. A break below this level could see the USD/JPY trade quickly down to 104.97 before a potential pause. Should we continue to trade lower and see continued downside pressure on the USD/JPY- a sharp move to 103.99 is possible.

 

COMMODITIES

GOLD – 1288 ( -5 or -0.39% )

GOLD remained relatively unchanged last week therefore our levels remain the same.

For a continued move higher we would like to see a close above 1294, followed by a break and close through 1303. Should this occur we could then see a move into 1322, and a break of this level could see a strong move into 1340.

If Gold cannot hold above 1294, we will look for a move back down to 1276. A strong break and close below this level we could see Gold trade back down to 1258 and if momentum to the downside remains strong we will watch for another move down to 1247 before the end of the week.

 

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