April 14, 2016
MAKOR - Tech view: Euro Stoxx 50, Dax30, S&P500, AUD/USD, AUD/NZD & NOK/SEK.
In Short: One thing standing out over the last few days is the out performance of Europe, Japan, China and Emerging markets verusus the US market. The fact that the entire world seemed to correct lower over the past few weeks and the US market remiand strong made us believe that global equities will play catch up with the US market instead of the opposite. Given the impulissvness of the move in Europe, Japan, China and Emerging markets we continue to believe that the uptrend has more legs. In the FX market we continue to favor the commodity linked currencies such as AUD, NZD, CAD & NOK. Given the break in Crude Oil above its 200dma (40.87) we are also adding a long NOK/SEK idea which also fits with our FX playbook for Q2 published outlook published at the end of March.
Euro Stoxx 50 Index (3034 last) – Bullish base above 2860, target 3217 & 3316
The Index broke back above the 55dma which is a bullish sign. The move higher looks impulsive and therefore while above the 55dma which stands at 2950 we expect to see another leg higher towards the 200dma at 3217 & then 3310
Strategy: Wrok a GTC order to buy 1 unit at 2952, target 3310 with a stop at 2845
Support: 2950, 2846-60 & 2780
Resistance: 3128, 3217 & 3313
Daily chart
Dax Index (10,033 last) – above 10,112 would argue for 10,700 / 10,800.
The Index managed to hold the path of higher lows established on the chart since the 8699 low. The recent higher low is 9498 and as long as the Index trades above it further range trading seems to be the case. A break out above 10112 will argue for a 600 point move towards 10,700 / 10,800 which is the upper boundary of the declining channel.
Support: 9498, 9125 & 8699
Resistance: 10,112 & 10,299 (200dma) & 10,700 /10,800
Daily Chart
S&P 500 Index (2082 last) – bullish base above 2033, target 2,100 & possibly 2116 & 2134
Despite the overbought technical conditions the Index is managing to consolidate at the highs which is by no doubt a sign of strength. The Index continues to hold the path of higher highs and higher lows with the recent higher low standing at 2033. While above 2033 a move higher towards 2100 and then towards 2116-2134 should be on the cards. A break below 2033 would be negative.
Support: 2,033, 2,016-2,022 & 1,969
Resistance: 2,100, 2,116 & 2,134
Daily chart
AUD/USD (0.7666 last) – bullish base above 0.7492, target 0.7850 & 0.8164
A move above 0.7723 would argue for a move to 0.7850 and above the later towards 0.8164 which is our medium term target. The recent higher low stands at 0.7492 and while above it the trend remains clearly to the upside. A break below 0.7492 would be negative but it will take a move below 0.7350-0.7400 to argue against the up trend.
Strategy: Long 1 unit from 0.7564, target 0.7850 and 0.8150 with a stop loss at 0.7475.
Daily chart
AUD/NZD (1.1180 last) – structure favors a minimum move to 1.1898
The CCY pair broke out from the declining trend line connecting the highs since 2011 (see weekly chart below), this it-self is a major development which argues for a move higher. From an Elliot wave perspective, the CCY pair has completed a 5 wave move lower which should be followed by an A,B,C correction higher. The CCY pair seems like is completed corrective wave A & B and one should now expect wave C to move higher towards 1.1898 were corrective wave A will equal corrective wave C. Today’s price action makes the 1.1035 the new pivot level and price should hold above it to keep the trend clearly higher.
Strategy: Long 1 unit from 1.0978, target 1.1890 with a stop loss at 1.0965.
Support: 1.1035, 1.0969Resistance: 1.1202 & 1.1334
Daily chart
Weekly Chart
NOK/SEK (0.9880 last) – structure favors a move higher
The CCY pair broke out from a bullish wedge pattern, the pattern argues for a move to 1.0650-1.0680. in order to keep this view the CCY pair needs to hold above the cycle low at 0.9487. Since this level is too far from market price we will use the recent higher low at 0.9669. A move above 1.003 would be bullish as it will not only take out the short term cycle high but will also argue for a move above the 200dma which is bullish.
Strategy: Long 1 unit from 1mkt price, target 1.0650 with a stop loss on at close below 0.9665.
Support: 0.9843 (55dma) & 0.9669
Resistance: 1.000-1.003, 1.0281 & 1.0650-1.0680.
Daily chart
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