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Alphaex Capital Market Edge

The Week Ahead

Markets In Focus

Brexit is still a mess… Markets will be monitoring this closely and will affect the FTSE100 and GBP.

Goldman Sachs have deduced a 50% probability of a deal occurring.

(Source:https://uk.reuters.com/article/us-britain-eu/deal-or-delay-wall-street-doesnt-believe-no-deal-brexit-threat-idUKKCN1Q40P1)

GBP Options have signalled rally strength in the Sterling during this uncertainty and if a no-deal Brexit is struck, then we’d expect Sterling to rise.

Charts In Focus

The Week Ahead: EUR/USD

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The week ahead looks positive for the EURO as Friday’s close saw a Hammer Candlestick form on the support level generated from June 2017.

Near term, fib levels suggest that we will see some stalling or reversals between the 38.2% (1.1344) and 61.8% (1.1411) levels. Should we see price continue to rise opportunity lies ahead to run the course to the 100% level, 1.1518. Should it also break the near term resistance level at 1.1455.

Conversely, if the 38.2% and 61.8% levels hold and a retrace begins, breaking the June 2017 support level could see price action taking it to roughly 1.1184 to 1.1123 respectively.

The Week Ahead: BTC/USD

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Bitcoin’s recent surge upwards, which saw the 2019 trendline break , saw last week’s trading stagnate.

With the surge, we can see a bullish flag pattern and as of Friday’s session close, a small breakout had occurred.

This could mean that Bitcoin could continue to rise should it breakout further of the flag formation . This breakout also closed above a significant resistance level of $3693.

The reaction at the 38.2% fib level suggested that the previous move upwards wasn’t strong enough to push higher. Now with a breakout above as mentioned, it could be possible that Bitcoin could move upwards to $4013 level.

READ  Daily Market Brief [23/07/2018]

Alternatively, if the 38.2% level holds and the flag pattern fails, then we could see a move down towards the 2019 low of $3405. Should this low break and we continue the trend of 2019 then it is possible for the price to reach the 127.2% or 161.8% levels, $3240 and $3029 respectively.

The Week Ahead: FTSE100

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FTSE 100 broke a major downtrend lend to the upside on January 30th 2019 and has continued to push higher. With Brexit looming over, it is a volatile time for the UK and Eurozone participants.

The recent fib extension indicates that the FTSE 100’s move higher could continue to the 127.2% level, 7311, which can make further headway back to a full 100% retracement 7552, which coincides with the extensions 161.8% level. If the FTSE 100 continues, this near term price targets look likely.

However, it is possible to retrace lower and reverse its recent gains and breakout of the downtrend with potential price levels of 7165 and 6923. We will be watching the 6923 levels closely if the downside scenario plays out.

The Week Ahead: S&P 500

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S&P500 has enjoyed a strong upward move in 2019.

We see that it has continued to make higher highs and lower highs which is positive for the S&P500 , yet we approach a trendline that was created by a sloping triple top which has held strong since October. Should the price penetrate this line, $2776, then we could see a continued move upwards for the S&P500 .

Plotted with the Linear Regression tool, we can also see an agreement that the price has traded back to it’s mean, which also adds confluence to the trade as the mean and the breakout level are the same. Should the S&P500 open positive this week, we could see the market break the level and make its move upwards to breaking the $2800 level. Continuing higher up, we could see it reach as high as $2925-$2945.

READ  Daily Market Brief [30/07/2018]

However, if the price doesn’t continue and the trendline resists the market, plus the price reverts away from the mean lower, then we could see a move lower towards the $2718 level.

Fundamental factors to include in these scenarios:

ECONOMIC DATA:

Tuesday: German ZEW Economic Statement
Wednesday: German PPI, US FOMC Meeting Minutes
Thursday: German Final CPI , French Final CPI , French PMIs, German PMIs, Eurozone PMIs
Friday: Draghi Speaks

This analysis is for informational purposes only and is not a recommendation, buy/sell signal, or advice in any format.