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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.
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We may take multiple trades throughout the week. Currently Trade View is Net Long.
AUSTRALASIA
ASX – 5266
The ASX started the week on a downward trajectory with a 90+ point move down. It then found support near the 5125 – 5094 area to bounce and rally over 150 points.
For an up trend to continue, we would like to see 5299 broken with similar momentum that we saw towards the end of last week. Once this level is broken, we would like to see 5315 hold as support before the ASX pushes towards 5432.
For the down move to restart we would like to see a solid break back down past 5207 and 5181 respectively. The next levels we will be watching closely are 5144 – 25 area, if this does not hold then 5094 will need to otherwise it could dip back below 5000 and reach 4983.
EUROPE
FTSE – 6516
The FTSE started last week with a downward move but reversed and found upward momentum towards the end of the week closing 200+ points from its lows.
For the upmove to continue, we would like to see a solid break past 6531 – 63 area before an attempt is made to break through 6598. If 6598 is broken with solid long up bars then the FTSE has the chance to reach 6657.
If the 6531 – 63 area provides a solid wall of resistance then a down move could restart. If this occurs then we would like to see 6488 broken followed by 6421 reached. If 6421 provides no support and the downward bars have strong momentum then 6358 and possibly 6307 are within reach.
DAX – 8736
Even though the DAX moved lower early in the week the moves were quite tame compared with the rest of the markets. Then it seemed that the US political stalemate was over and the DAX moved higher and 9000 is only 250 odd points away.
If the DAX continues higher, then we would like to see 8771 broken early (which is the range high set back in June/July and then again in Aug/Sept) followed by a solid move towards 8883. If we then see a solid break above this level with long up bars and solid momentum then a break above 9000 is inevitable.
If the DAX moves lower from here then 8678 needs to be broken early in the week followed by a solid move past 8614 which could see 8553 being reached. If 8553 is also broken, then 8428 is the next level we will be watching.
US
S&P – 1705
With all the political wrangling in the US we saw the S&P move 60 points in the week (low – high). Is this healthy? Probably not. Remember this – If the markets are uncertain about the path forward, they tend to do uncertain things and re-adjust in a un-predictive manner.
For the up move to continue higher from last week, the first thing we need is no more political stalemate in the US. Once this occurs, then we would like to see a solid break back past 1707 and a solid lead to reach 1733. If 1733 is broken with solid long up bars then our first upper target will be 1752.
Under current conditions it wont take much for the downward process to continue, if the politicians don’t agree then we could be in for a shake up. In light of all this no downward targets will be posted. We will however be watching 1636 and 1547 as key levels.
Trade View is monitoring the situation closely and will act with the utmost caution.
NASDAQ – 3240
In light of all political developments in the US, there will be no post on NASDAQ this week. The S&P will be our main focus.
FOREX
AUD.USD – 9462
The AUD moved higher last week but only slightly as it was trying regain some upward momentum. As long as it stays above 9407 this could be the case.
For the uptrend to take another leg higher we would like to see 9495 broken early this week followed by a solid move past 9575. If 9575 holds as solid level of support we would then look for 9651 as the next level.
For the down move to restart we would like to see 9386 broken early in the week followed by strong momentum and long down bars through 9293, if this occurs then 9188 would be the next level of interest.
EUR.USD – 13536
The EUR began the week strong and looked like it wanted to continue higher, but the USD also wanted to find strength, so the pair finished relatively flat for the week
If the EUR gains strength and the move up is to continue, then we would like to see 13566 broken early in the week and then hold as a strong level of support. Once this occurs a move towards 13626 is possible. Once this level is broken with solid upward momentum then 13708 could be achieved.
If the USD continues stronger then 13502 needs to be broken early and with strong downward momentum reaching 13433. If this level is then broken we could see 13397.
GBP.USD – 15946
The GBP came back down to earth last week with a solid move down, as mentioned the USD strength can come on quickly and force some of these overextended pairs to drop sharply.
For the up move to restart, we would like to see a break back above 15973 early in the week followed by a solid upward break and close above 16087 – 16113 area. Once this occurs the GBP could test the previous highs of 16260.
For the down move to start a new leg down, we would like to see an early break of 15911. If the momentum is strong then 15795 and 15722 could easily be achieved.
USD.JPY – 98.55
This pair is competing with each other, as one week we have USD strength, then the next the YEN takes the lead. The reason for this is that they are both considered as safe havens and will come down to who raises rates first.
If the late move up is to start a new leg then we would like to see a solid momentum break above 98.64 – 81 area before 99.14 is reached. Once this level is reached then 99.93 needs to be broken with strength before 100.00 is broken and 100.57 is reached.
If the medium term downtrend restarts then 98.20 needs to be broken early in the week before 9755 is reached. 9755 is a key level for the down move as it is forming itself as a solid level of support. If it does not hold and is broken with solid long downbars then 96.34 could be next.
COMMODITIES
GOLD – 1271
GOLD is finding it difficult to rally in the current market environment, and it has now closed below an important level of 1282. In the past when times were uncertain, GOLD was the favorite play and was considered a safe haven. That seems to have all but disappeared.
For an upmove to have any chance of a restart then we would like to see 1282 – 95 area broken early in the week followed by 1332 being reached. If 1332 is also broken with solid momentum then 1353 needs to provide no resistance before 1391 is reached.
As we are still within the Long term Standard Deviation Channel, the down move will continue if 1225 is broken with solid momentum. Depending on the downward speed then 1180 could be next.
US LIGHT CRUDE OIL – 101.77
OIL is back outside the Standard Deviation Channel which could play an important role in determining if OIL rallies once more.
For the up move to continue then we would like to see 102.70 broken early in the week followed by a strong break and close above 103.67. If 105.09 is to be reached then the upward momentum from 103.67 needs to be extremely strong as it also needs to break back into the Channel.
If the down move continues then we would like to see 100.79 broken early in the week. Once this occurs then 99.47 could be reached. If 99.47 does not provide any support and the downward momentum is strong then 97.44 could be the next level.
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