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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 5121
The ASX took another leg up after a sideways move last week, and it has now closed just a few points below 5125 which is going to play an important part in its next move.
If we are to see a continuation of the up move then 5125 needs to be broken early in the week with long solid bars. If this occurs then we will be looking for 5249 as our next target.
If 5125 is the catalyst for the slowdown to take its full effect, then a break below 5064 could lead to 4983 being reached, before finding possible support near 4923.
EUROPE
FTSE – 6657
The FTSE attempted an upmove but was met with short term resistance at 6699, and once it reached a high of 6714 it couldn’t find enough strength to continue and reversed.
If the FTSE makes another attempt to move higher, then we would like to see the level 6699 broken early in the week. Momentum needs to continue past 6740 as this could be the next level of resistance. If 6740 is broken with solid momentum then we could see an ambitious target of 6876 reached.
If we see a down move from here, then we would like to see 6623 broken before 6541 is reached. If 6541 is broken then we could see 6439 acting as potential support.
DAX – 8420
The DAX’s attempt at a reversal down at the start of the week was short lived as a 200 point rally at the end of the week changed its course and it closed back inside the Standard deviation channel.
If the upmove continues then the DAX could reach new highs quite quickly. We will be watching the breaks closely this week.
If the late bounce last week was just a fakey, and if we see it break 8338 and 8213, then we could see a move back down towards 8106.
US
S&P – 1707
The S&P has found a new lease on life to push past its indecision from last week and has now reached its full range from the rally set back in April to May. The big question is, does it have another full length rally in it?
If we see a continuation of the up move then we will be looking for a solid break and a close above 1710. As mentioned last week, once this occurs we could see a new uptrend cycle. No upper targets have been set just yet.
If the S&P finds it difficult to hold these levels, then a solid break back down past 1691 could see it reach 1661 and then potentially reaching 1623, which depending on the strength of the downward move could become support.
NASDAQ – 3140
The NASDAQ is showing no signs of slowing down at the moment and this could be a sign of over exuberance about the tech sector. The NASDAQ has reached its potential extension range and is now at an important level.
If this up move has a chance at continuing then we would like to see a strong move with long up bars breaking past 3145 which could lead a move towards 3194.
If a break back down is to occur then 3087 and 3014 need to be broken with solid downward momentum. If so, then 2995 and 2938 could be next lower targets.
FOREX
AUD.USD – 8901
The AUD is not looking at getting stronger anytime soon. With comments from RBA indicating possible further rate cuts and strength in the USD, look out below.
If we see the longer term downtrend continue then solid down bars breaking through the 8780 area could lead to mid 80’s reached, and depending on the momentum we could see the low 80’s this week. No attempt on lower targets will be made yet.
If the AUD is to change direction then 9113 needs to be broken first, and as we mentioned last week – would like to see a strong move past the area between 9370 – 9395 before a new uptrend can form.
EUR.USD – 13279
The EUR is stuck at 13285 and ranged last week between FICM’s two levels of 13177 and 13285. These two levels will play an important role in the next move.
If the move up is to continue then it needs to break past 13285 early, which will then possibly reach 13342. If the up move has strong momentum and long up bars then we could see 13432 reached before extending to an ambitious target of 13506.
As we said last week; if there is a break on the downside then we would like to see 13177 broken, then followed by 13106 and eventually finding potential support near 13084.
GBP.USD – 15291
The GBP moved lower as the USD strengthened early in the week, but then a 250+ point rally changed the direction quickly as the BOE decided to not act on monetary policy just yet.
If we see a continuation of the upmove then we would like to see a solid break past 15380 and 15500 early in the week. This could then lead to a potential target of 15598.
If 15304 holds up this rally, then a solid move back down past 15273 and 15184 could start a fall past 15118. If the move past 15118 has strong momentum behind it then 15006 could be tested.
USD.JPY – 98.91
The JPY downward move was met by a solid level of support near 9756 as we saw strength come back into the USD and a 200+ rally occurred.
If we are to see another strong USD rally against the JPY then we would like to see 100.52 broken with solid long up bars which could lead it towards 102.25-52 which would be the full length of the range which was formed back in June.
For this down move to take a new leg down we would like 99.93 to become a solid level of resistance and then a solid break past 97.53. If this occurs then we will looking at 96.11 as possible downward target with a possible extension down near 95.08.
COMMODITIES
GOLD – 1311
GOLD is still showing signs of uncertainty and the question remains; what’s the next move? It comes down to the play of the world markets, and if we see a big move down then GOLD may once again become the safe haven play.
If another attempt at an upmove is to take place then we would like to see 1302 hold and 1324 broken on the upside. If this occurs with solid momentum then we could see 1378 and 1391 reached.
If 1302 does not hold and we are to see another aggressive down move then 1254 will play an important role as if broken then this could be the trigger for GOLD to dip below 1200 again.
US LIGHT CRUDE OIL – 106.81
A lot has to be said about the move in OIL lately, and as you will notice in the charts any solid downward moves early were followed by strong rallies late. It seems like we are running out of the commodity by the end of each week. Overall we could be in for a world were 100+ OIL is the norm.
If the up move is to continue then solid long bars past 110 could be the start of panic buying and the 119.11 level could be reached very quickly. In these types of markets if you are the the right side of the trade, enjoy it while you can.
If we see a down move then any strong movement past 10530 could see 102.51, and if 102.51 is broken the 100.92 could be the next level.
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