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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 Light Net Long.
AUSTRALASIA
ASX – 5293
The ASX started the week flat but edged higher towards the end of the week to close just below 5300. It is clearly trying to start an up trend. It tried to break the range high of 5323 again but failed, so this indicates that this level is playing a pivotal role in determining the next move higher.
For any chance of the up move continuing, then the range high of 5323 needs to be broken early with solid momentum. Once this level is broken then 5390 will need to be the next level to break before the completion of the new range is reached at 5426.
For a down move to restart, then we need to see a solid break past 5267 followed by long down bars through 5218 – 5188 area before reaching an previously mentioned level of 5125, which could then become support.
EUROPE
FTSE – 6501
After the slowdown process was confirmed the FTSE moved lower early by breaking through the Standard Deviation Channel on the first day and continue lower towards the end of the week. It reached a low of 6484 which was only 1 point off our previously mentioned level of 6483, which will play an important role this week.
For the upmove to restart, then we would like to see 6527 broken early in the week followed by solid moves past 6593. There will need to be upward momentum for the FTSE to break back and close inside the Standard Deviation Channel. Once this is achieved then we will revise levels.
If the down move is to continue, then we would like to see 6483 broken early with long down bars followed by a solid break past 6447 and 6420 which would lead the FTSE back into the 6300’s
DAX – 8671
The DAX has repeated its pattern by moving sideways when most of the markets went down. Monitoring the DAX’s movement is a very important part of our trading here at Trade View Investments.
If the DAX is to continue higher our upper targets remain the same as last week. If we see an early move up past 8771, which could lead it to reach and potentially overextend past 8883 (range high). If the momentum is strong, then we might even see the DAX move above 9000.
If the DAX reverses and continues lower with the rest of the indices, we might see the DAX head back down towards 8551. If this level is broken then we could see 8428 and possibly 8340 reached. If the downward momentum is strong then 8139 could be reached.
US
S&P – 1691
Last week we said: “The S&P provided a 20 point gap on Wednesday after the Fed decided to continue with its monetary policy. But the markets have a way of forcing the hand of regulators and policy makers.”
For the move to continue higher we would now need to see a move back past and close above 1707- 1710. Once this is occurs, then the next challenge will be a break back into the Standard Deviation Channel which would also mean breaking the highs of 1733.
The S&P is now half way through the downward process and for the move to continue lower we would like to see 1680 broken early in the week. Once this occurs we could see 1668 and finally 1658 before a new slowdown takes place.
NASDAQ – 3228
The NASDAQ is behaving similarly to the DAX by moving sideways when most of the other markets are moving down.
If this upmove takes full effect, then we would like to see the previous high of 3247 broken before a break back into the channel, which could then see 3275 and complete the range set in August.
If the down move is to start then 3204 needs to broken early followed by a solid momentum break through 3177 – 3150 area. This could then lead the NASDAQ to dip back below 3100.
FOREX
AUD.USD – 9311
The AUD could not hold its previous rally and has now closed below an important level of 9395.
For the uptrend to restart and continue the AUD needs to break past and close above 9395 – 9407 area with solid long up bars. If this level then holds it could be the start of a move substantial move by the AUD. If this occurs then we would like to see solid breaks past 9528 and further moves into the 9600 area before revisiting upper targets.
If we are to see another move down, then we would like to see a break past 9293 early in the week followed by a further strong move past 9210 and eventually potentially finding some support near 9119 – 9083.
EUR.USD – 13521
The EUR entered into a slowdown process last week and continued sideways all week.
If the move up is to continue, then we would like 13568 broken early in the week followed by strong upward momentum past the highs set in Feb of 13711 before the new longer term uptrend can restart.
If the slow down process takes full effect then we could see 13432 reached, and if broken, then 13347 could provide some support. If not, then we would look for 13175.
GBP.USD – 16137
At the moment, no matter what happens in the world the GBP is steaming ahead. After a slow start to the week it has moved higher and closed above an important level of 16114.
For the up move to continue then we would like to see 16114 hold as a strong level of support, or a break past 16162 followed by a solid move past 16208 with long up bars could lead the GBP to rally past 16381 and towards our first ambitious level of 16492.
For the down move to start we would like to see another break back down past 16114, which could lead to 16024 being tested again. If this level is broken, then the GBP will have breached the Standard Deviation Channel. If the momentum is strong then 15924 – 15906 could be the next level reached. If this area does not provide any support then 15795 is a possibility.
USD.JPY – 98.16
Even though Japan is willing for its currency to be lower it is finding that willpower alone will not be enough.
If the USD is to strengthen against the JPY then we would like to see a break back up above 98.64 followed by solid up bars past 99.14 and 99.92. If these are broken with solid momentum (or an out of left field comment from either reserve bank) we could see 100.52 again.
If the down move continues then we would like to see a solid break past 97.93 early in the week. If this occurs then 97.55 could be tested and if broken then 96.80 would be the next level reached. If momentum is strong then 96.14 could be reached.
COMMODITIES
GOLD – 1335
GOLD is struggling to find its momentum at the moment as there is no certain direction for the world markets. One week they are up the next down. GOLD will need to just wait and see.
If we are to see an upmove then we would like to see the area between 1353 – 1362 broken with strong momentum. Once this is achieve then 1391 will be the level we believe needs to be broken and then hold as a solid level of support before the new uptrend starts.
If there is a continuation of the down move then we would like to see 1320 broken early in the week followed by a solid break past 1282. Once this occurs we could see 1230 reached which will conclude the range which was set back in April -May.
US LIGHT CRUDE OIL – 102.81
The move down continues as OIL fell out of favour the previous week and has not improved much since. One thing to note is that it has closed inside the Standard Deviation Channel.
For an up move to have any chance of a restart, then 102.34 needs to hold as solid level of support, and we need to see a bounce from here breaking past 105.20 with solid long up bars and continuing towards 107.19, which would then be the top of the Channel. For this to be broken, then some surprising news will need to be released into the market for it to push higher.
If the downward momentum becomes stronger, then a solid break through 102.34 could see 100.79 reached very quickly. If OIL falls completely out of favour then 99.47 could be seen. If this level does not hold then 97.44 could be a likely, but ambitious lower target before some support is found.
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