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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes. For up to the minute market analysis see our live trading room.
INDICES
AUSTRALASIA
ASX – 7286 (+35 or +0.48%)
The ASX endured a choppy week as Greater Sydney went into another lockdown which led to indecision. We will be discussing what is next in our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Weds 09:15 – RBA Governor Lowe speaks
Weds 11:00 – ANZ Business Confidence
For a continued move higher we would like to see the ASX hold above 7272. Should this occur, a move back into 7400 could be expected; and if momentum is strong we cannot rule out moves to 7500.
Failure to hold above 7272 means a potential move back into 7202. 7091 is the next support level down if 6969 doesn’t hold. If downside momentum is really strong then we could see a sharp move to 6850.
EUROPE
DAX – 15623 (+213 or +1.38%)
The DAX almost recovered the previous week’s damages but endured a sideways week after Monday’s rally.
VOLATILITY ALERTS:
Tues 22:00 – CPI M/m
Weds 17:55 – Unemployment Rate
Weds 19:00 – EU Core CPI M/m
Thurs 17:55 – Markit Manufacturing PMI
Fri 16:00 – Retail Sales M/m
For the DAX to continue its move higher we would like to see it hold above 15585. Should this occur then 15782 is the next technical level ahead. If upside momentum really takes hold then 16000 cannot be ruled out.
To the downside, should we not see it hold above 15585, we will look for a move into support at 15345. A strong break and close below this handle and 15050 is the next level down. If downside pressure mounts then 14990 cannot be ruled out.
US
S&P 500 – 4284 (+133 or +3.2%)
The SPX looks in trouble as a breakout of the trend line looks in play – can the bulls hold the line again or is this the start of something bigger? We will be discussing what is next in our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Weds 00:00 – Existing Home Sales
Thurs 00:00 – New Home Sales
Thurs 22:30 – Core Durable Goods M/m
Thurs 22:30 – GDP Q/q
Fri 22:30 – Core PCE M/m and Y/y
For a move higher we would like to see the S&P close above 4300. Should this occur, we will look for a move to 4375; and if momentum is very strong we cannot rule out moves to 4400 and 4422.
If we cannot close above 4300, we could see this market move down into 4250. A break of this level however may result in a quick move down to 4200, and if momentum to the downside remains strong we may see a fast move back down to 4175.
FOREX
AUD/USD – 0.7587 (+109 or +1.46%)
VOLATILITY ALERTS:
Weds 09:15 – RBA Governor Lowe speaks
Weds 11:00 – ANZ Business Confidence
Aussie Dollar bulls stepped in as the USD pulled back this week by posting 5 green days – are we back into the yearly range trading already?
For a move higher this week we would like to see it hold above 0.7560. We will then be targeting a move back into 0.7729 where we may see a pause. If we see a strong break and close above this level then we can’t rule out a move to 0.7823.
If this market cannot close above 0.7560, we could see a move back down into 0.7500. A strong break of this level may result in a move into 0.7423, however, any weakness below this level could see a sharp drop into 0.7343.
EUR/USD – 1.1936 (+75 or +0.63%)
The Euro stabilised after the post FOMC sell off to post a moderate gain – is this just a relief rally or is a full fade on the cards? We will be discussing this in our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Weds 18:00 – EU Market Manufacturing and Services PMI
Thurs 07:00 – EU Leaders Summit
Fri 22:30 – U.S. Core PCE M/m and Y/y
For a move higher we would like to see the EURO hold above 1.1925. Should this occur we could see a move into 1.2000 before a pause. A break of this level could see this market rally further to 1.2052; and if momentum is very strong, 1.2100 cannot be ruled out.
If the EURO cannot hold above 1.1925, we could see a move into 1.1833. A strong break of this level may result in a move into 1.1738, however, any weakness below this level could see a sharp drop into 1.1615.
GBP/USD – 1.3878 (+85 or +0.62%)
The GBP hit big resistance midweek as a quiet BoE meeting disappointed traders. We will be discussing this in our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Weds 16:00 – GDP Q/q
For a move to the upside, we would like to see Cable hold above 1.3865 before a break higher through 1.4000. If this market can see a strong close above this level we may then see a strong push back into 1.4125.
Should we fail to hold above 1.3865, we will look for a move down to 1.3755. A break below this level however could see Cable further depreciate to 1.3666 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3620.
USD/JPY – 110.78 (+56 or +0.51%)
Another gain for the Dollar Yen despite relative USD weakness as the Yen continues to underperform. We will be discussing this further in our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Tues 09:50 – Japan Retail Sales M/m
Weds 00:00 – Cb Consumer Confidence Index
Thurs 00:00 – Pending Home Sales M/m
Fri 00:00 – Ism Manufacturing Pmi
Fri 22:30 – Non-Farm Payrolls
For a move to the upside, we must now see this market hold above 110.38. Should this occur we will look for a retest of 111.0, and if momentum is very strong we could see a move higher into 111.70 and potentially 112.25.
If we cannot hold above 110.38, we could see a move back to test 109.68 before a pause to the downside. A break below this level may result in a sharp move lower into 109.21, and any further breaks to the downside may see a bigger move into 108.60.
COMMODITIES
GOLD – 1781 (+17 or +0.96%)
Gold paused after its worst-performing week in over a year and faced resistance as it looked for a bounce. We will discuss what is next throughout the week in our LIVE CHAT ROOM.
VOLATILITY ALERTS:
Weds 22:30- Core PPI M/m & Y/y
Thurs 22:30 – Fed Interest Rate Decision and FOMC Press Conference
For a continued move higher we need to see this market close above 1905. Should this occur we will move into 1930; and any break of this level could see a stronger move into 1960. If momentum is really strong then 1975 cannot be ruled out.
If Gold cannot close above 1905, we will look for a move back down to 1875. A break below this level could see a move lower into 1850, and if momentum is very strong to the downside we could see a move to 1814.
CRYPTOS
BITCOIN – 32810 (+634 or +1.97%)
Both top and bottom of the range continue to be tested with a real battle between bulls and bears.
For a move higher we must now see this market close above 35000. Should this occur we could see a move into 40000 before retesting 42000. If upside momentum is really strong then we can’t rule out 50000.
Failure to close above 35000 could see a move down to the lows around 30000. If selling pressure takes control then we could see a move down to 25700. A close below this level and 19000 can’t be ruled out.
