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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7317 (+7 or +0.1%)
The ASX endured a volatile week on the back of concerns coming out of China but managed to close the week flat.
VOLATILITY ALERTS:
Tues 11:30 – Retail Sales M/m
Fri 09:00 – Commonwealth Bank Markit Manufacturing Pmi
For a move higher we would like to see the ASX close above 7400. Should this occur, a move into 7500 could be expected; and if momentum is strong we cannot rule out moves to 7600 and 7730.
Failure to close above 7400 means a potential move back into 7272. 7202 is the next support level down if 7091 doesn’t hold. If downside momentum is really strong then we could see a sharp move to 7000.
EUROPE
DAX – 15563 (+62 or +0.4%)
The DAX’s expansion didn’t get off to the best start, however, a V reversal off a key level showed there is still plenty of support around.
VOLATILITY ALERTS:
Fri 19:00 – EU Core CPI
For the DAX to continue its move higher we would like to see it hold above 15500. Should this occur then 15800 is the next level ahead. If upside momentum is strong then 16000 cannot be ruled out.
To the downside, should we not see it hold above 15500, 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 14805 cannot be ruled out.
US
S&P 500 – 4450 (+40 or +0.91%)
The ‘dip buyers’ were once again out in full force as the SPX fully faded an almost 5% correction – is the trend to the upside back on?
VOLATILITY ALERTS:
Mon 22:30 – Core Durable Goods Orders M/m
Weds 00:00 – Cb Consumer Confidence Index
Thurs 00:00 – Pending Home Sales M/m
Thurs 22:30 – GDP Q/q
Fri 22:30 – Core PCE price index M/m
For a move higher we would like to see the S&P close above 4450. Should this occur, we will look for a move to 4505, and if momentum is very strong we cannot rule out moves to 4531.
If we cannot close above 4450, we could see this market move down into 4421. A break of this level however may result in a quick move down to 4375, and if momentum to the downside remains strong we may see a fast move back down to 4352.
FOREX
AUD/USD – 0.7257 (-7 or -0.1%)
The Aussie Dollar managed to stabilize despite the global market risk off sentiment – we will discuss this further inside our Live Chat Room.
VOLATILITY ALERTS:
Tues 11:30 – Retail Sales M/m
Fri 09:00 – Commonwealth Bank Markit Manufacturing Pmi
For a move higher this week, we would like to see it close above 0.7342. We will then be targeting a move back into 0.7423 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 0.7500.
If this market cannot close above 0.7342, we could see a move down into 0.7250. A strong break of this level may result in a move into 0.7065, however, any weakness below this level could see a sharp drop into 0.7000.
EUR/USD – 1.1719 (-6 or -0.05%)
VOLATILITY ALERTS:
Fri 19:00 – EU Core CPI
The Euro closed the week completely flat and as such our levels remain unchanged.
For a move higher we would like to see the Euro close above 1.1738. Should this occur we could see a move into 1.1833 before a pause. A break of this level could see this market rally further to 1.1925; and if momentum is very strong, 1.2000 cannot be ruled out.
If the EURO cannot close above 1.1738, we could see a move into 1.1615. A strong break of this level may result in a move into 1.1570, however, any weakness below this level could see a sharp drop into 1.1500.
GBP/USD – 1.3669 (-60 or -0.44%)
A slightly more hawkish BoE helped strengthen the GBP on Thursday but it got stuck at key resistance.
For a move to the upside, we would like to see Cable close 1.3755 before a break higher through 1.3865. If this market can see a strong close above this level we may then see a strong push back into 1.4000.
Should we fail to close above 1.3755, we will look for a move down to 1.3666. A break below this level however could see Cable further depreciate to 1.3620 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3534.
USD/JPY – 110.72 (+75 or +0.68%)
The Dollar Yen looks to have finally caught a break of the month-long sideways price action, is a new trend set to be established?
VOLATILITY ALERTS:
Mon 22:30 – Core Durable Goods Orders M/m
Weds 00:00 – Cb Consumer Confidence Index
Thurs 00:00 – Pending Home Sales M/m
Thurs 22:30 – GDP Q/q
Fri 22:30 – Core PCE price index M/m
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, and if upside momentum is strong we could see a move higher into 111.70 and potentially 112.25.
If we cannot close above 109.94, 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 107.81.
COMMODITIES
GOLD – 1750 (-4 or -0.23%)
Choppy week for GOLD but it ends flat – are sellers still in control?
For a move higher we need to see this market close above 1756. Should this occur we need to see a move back into 1786; and any break of this level could see a stronger move into 1814. If momentum is really strong then 1832 cannot be ruled out.
If Gold cannot close above 1756, we will look for a move back down to 1740. A break below this level could see a move lower into 1720; and if momentum is very strong to the downside we could see a move to 1678.
CRYPTOS
BITCOIN – 42590 (-4351 or -9.27%)
Bitcoin suffered from market risk-off sentiment then further China crackdown on crypto and is set to test key support levels from here.
For a move higher we must now see this market hold above 42000. Should this occur we could see a move into 44000 before retesting 47000. If upside momentum is really strong then we can’t rule out 50000.
Failure to hold above 42000 could see a move down to 40000. If selling pressure takes control then we could see a move down to 35000. A close below this level and 30000 can’t be ruled out.
