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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.
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AUSTRALASIA
ASX – 5109
The ASX tried to continue its up move early in the week but found resistance near 5190, it then headed back down to close 20 points below an important level of 5125.
If the longer term up move is to continue then the ASX needs to find support at 5085, and if this is the case then another break above 5125 with long up bars early in the week could see it reach 5249.
If the late down move is to continue then a solid break below 5085 early in the week could see 4983 being reached, and if this level doesn’t provide any support then we will look for the area of 4923-4904 to perform this duty.
EUROPE
FTSE – 6490
The FTSE again moved lower last week and closed 100+ points below 6599 level which we watched closely, and has started a new downward process according to FICM.
If the down move is to continue then we would look for 6439 to be broken early in the week with long down bars. If this occurs, and depending on the downward momentum, then we could see the 6332-6306 area reached.
If the FTSE is to reverse the downward process and start a new upmove, then we would like to see 6545 and 6599 broken with strong long bars. If the momentum continues then we could see 6699 and ultimately 6740 reached.
DAX – 8369
The DAX is in a sideways range at the moment and is uncertain of its next move, even though some of the other world markets have taken a leg down. It is however sitting above an important level of 8345 which will be watched closely this week.
If the DAX makes a move higher this week then we would like to see 8345 hold as a strong level of support and see long up bars reach 8559 as the first upper target. This will be revised once met.
If the down move is to play out then we would like to see 8345 broken, and if this is done with strength then 8106 and 8006 are the lower targets.
US
S&P – 1652
The S&P made another strong down move late last week and closed just 4 points from our lower target of 1648. FICM has also indicated a potential slowdown in the current move.
If the S&P is starting its long awaited downward move and the slowdown of the current move does not take place, then we would like to see 1648 broken with the same strong momentum we saw last week. If this takes place then 1623 will be our next lower target.
If we are to see an up move then we will be looking for support of 1648, and if a break past 1682 and 1693 occurs with strong momentum we could see a move back to 1707.
NASDAQ – 3069
After the NASDAQ slowdown last week it has now started a potential downward process.
If the downward process takes full effect, then a break back below 3052 could start a domino effect by taking out the following levels of interest: 3032, 2983, 2965, 2938. If the NASDAQ does not find support near the end of the move then we could be in for a new long term move.
If the NASDAQ has any chance at continuing an upmove then we would like to see a strong move with long up bars breaking 3088 – 3107 which could then lead to a move towards 3180 with a possible extension to 3194.
FOREX
AUD.USD – 9182
The AUD fell away early in the week but regained upward momentum towards the end of the week to close slightly lower. With the USD in a potential weakening stage, could this be the chance that the AUD was looking for to start a new rally?
If we see the longer term downtrend continue then we would like to see a solid break back down past 9083. If this is done with solid downward momentum and a break below 8996 occurs then we would look for 8780 which will then become an important level to watch.
If we see a new uptrend form then we would like to see 9256 broken with strong long up bars followed by a strong move past the area between 9370 – 9395. Once this is done we will revisit upper targets.
EUR.USD – 13328
The EUR made an early move down last week but bounced off 13205 which had no significance in this current series of ranges to close 10 points lower from last week’s close.
If the move up is to continue then we would like to see a solid break past 13404 early, which could then lead to 13432. If 13432 is broken with upward momentum then 13508 could be reached, once this level is broken then we will revise upper targets.
If we are to see the downside move occur then a few levels will need to be observed. If we see a break below 13303 we will be watching the area between 13285-13271 for potential change in direction. If this is broken then 13233 will be the next target.
GBP.USD – 15622
The GBP had its third wind and rallied even further last week breaking past an important level of 15597 reaching a high of 15656.
If the upward move is to continue then we would like to see a solid break past 15722 before 15788 is reached. If the momentum is strong then 15838 is our next upper target.
If we see a down move from here, then we would like to see 15597 broken followed by 15428. If these levels are broken with strong downward momentum then 15380 could be the next target before the move finds potential support near 15282.
USD.JPY – 97.52
After showing signs strengthening the JPY gave way to the USD and broke through an important level of 97.56 and then reached an upper target of 98.73, but then the USD strength faded away towards the end of the week. Is this a sign of the pair starting a sideways move?
For a new upward rally to take place for the USDJPY pair we would like to see 98.33-64 area broken and hold as support before a move up towards 99.56 is made. Once this level is broken then 100.52 could be the next ambitious upper target level.
For this down move to restart 97.56 needs to act as a solid level of resistance, and if this occurs, a break back down past 97.22 could lead the pair towards 96.14 and possibly 95.08
COMMODITIES
GOLD – 1376
As the USD weakened last week GOLD took full advantage and made another move higher to close 15 points from our upper target of 1391.
If another attempt is made to move higher then we would like to see 1391 broken with solid long up bars which could then lead to a possible break above 1400 and reach the short term range developed of 1436.
If we are to see another move lower from these levels then we would like to see 1321 and 1302 broken which could lead to 1261 – 1254 levels reached. If this is the case then we will revise our downward targets once met.
US LIGHT CRUDE OIL – 107.28
At the moment we should start getting used to a world were 100+ OIL is the norm.
For the up move to continue we need to see a solid break with long bars past 108.89 which could see a short term target of 114.06 reached, and if the momentum is strong then 119.11 could be seen very quickly.
If we see a down move then first we need to see a break past 105.55 – 60 followed by a strong break past the standard deviation channel could see 102.51, and if 102.51 is broken the 100.92 could be the next level.
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