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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7382 (+200 or +2.78%)
A strong week for the ASX as New South Wales re-emerged from a lengthy lockdown.
VOLATILITY ALERTS:
Tues 11:30 – Nab Business Confidence
Thurs 11:30 – Employment Change
For a move higher we would like to see the ASX hold above 7272. Should this occur, a move into 7400 could be expected; and if momentum is strong we cannot rule out moves to 7500 and 7600.
Failure to close above 7272 means a potential move back into 7202. 7091 is the next support level down if 7000 doesn’t hold. If downside momentum is really strong then we could see a sharp move to 6915.
EUROPE
DAX – 15170 (+432 or +2.85%)
Correction over? The DAX had a strong second half of the week and is now back within touching distance of ATH’s.
VOLATILITY ALERTS:
Tues 20:05 – Zew Economic Sentiment Indicator
For the DAX to continue its move higher we would like to see it hold above 15585. Should this occur then 15800 is the next level ahead. If upside momentum is strong then 16000 and 16050 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 14810 cannot be ruled out.
US
S&P 500 – 4474 (+83 or +1.89%)
The SPX moved back within 2% of its ATH as risk on sentiment swept back through markets – can that momentum be maintained into this week?
VOLATILITY ALERTS:
Weds 01:00 – Jolts Jobs Openings
Thurs 23:30 – Core CPI M/m & Y/y
Fri 23:30 – Retail Sales M/m
For a move higher we would like to see the S&P hold above 4450. Should this occur, we will look for a move to 4500, and if momentum is very strong we cannot rule out moves to 4530.
If we cannot hold 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 – 0.7423 (+113 or +1.55%)
Another strong week for the Aussie Dollar as it moves back to retest the September high.
VOLATILITY ALERTS:
Tues 11:30 – Nab Business Confidence
Thurs 11:30 – Employment Change
For a move higher this week, we would like to see it hold above 0.7342. We will then be targeting a move through 0.7423. 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 hold 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 – 1.1598 (+24 or +0.21%)
VOLATILITY ALERTS:
Thurs 20:00 – EU Retail Sales
Fri 23:30 – Non-Farm Payrolls
The Euro crept slightly higher but nevertheless was relatively flat and our levels remain unchanged.
For a move higher we would like to see the Euro close above 1.1615. Should this occur we could see a move into 1.1738 before a pause. A break of this level could see this market rally further to 1.1833; and if momentum is very strong, 1.1925 cannot be ruled out.
If the EURO cannot close above 1.1615, we could see a move into 1.1570. A strong break of this level may result in a move into 1.1500, however, any weakness below this level could see a sharp drop into 1.1425.
GBP/USD – 1.3743 (+123 or +0.9%)
The GBP is performing the stronger of the two right now and managed to post a strong weekly break of recent consolidation – a follow through into its 200 DMA to come?
VOLATILITY ALERTS:
Weds 17:00 – Manufacturing Production M/m & GDP M/m
For a move to the upside, we would like to see Cable hold 1.3666 before a break higher through 1.3755. If this market can see a strong close above this level we may then see a strong push back into 1.3865. If upside momentum is really strong then a move back into 1.4000 can’t be ruled out.
Should we fail to hold above 1.3666, we will look for a move down to 1.3620. A break below this level however could see Cable further depreciate to 1.3535 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3435.
USD/JPY – 114.23 (-71 or -0.63%)
The Dollar Yen has completely taken off and is now testing 3-year highs. How much more has this run got to give?
VOLATILITY ALERTS:
Weds 01:00 – Jolts Jobs Openings
Thurs 23:30 – Core CPI M/m & Y/y
Fri 23:30 – Retail Sales M/m
For a move to the upside, we must now see this market hold above 114.23. Should this occur we will look for a move into 114.70, and if upside momentum is strong we could see a move higher into 115.54 and potentially 116.10.
If we cannot hold above 114.23, we could see a move back to test 113.20 before a pause to the downside. A break below this level may result in a sharp move lower into 112.25, and any further breaks to the downside may see a bigger move into 111.70.
COMMODITIES
GOLD – 1767 (+7 or +0.4%)
Another flat week for Gold despite some inter-week volatility as markets continue to digest rising inflation concerns.
VOLATILITY ALERTS:
Thurs 23:30 – Core CPI M/m & Y/y
Fri 23:30 – Retail Sales M/m
For a move higher we need to see this market hold 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 hold 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 – 60671 (+5961 or +10.9%)
Another ripping week for Bitcoin and it has now breached the 60k barrier ahead of supposed ETF approval.
For a move higher we must now see this market hold above 60000. Should this occur we could see a move into 63500 before retesting the ATH of 64920. If upside momentum is really strong then we can’t rule out 68350.
Failure to hold above 60000 could see a move down to 58000. If selling pressure takes control then we could see a move down to 55000. A close below this level and 50000 can’t be ruled out.
