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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7421 (+39 or +0.53%)
The ASX closed the week slightly higher as Victoria joins NSW in having lockdown restrictions eased.
VOLATILITY ALERTS:
Weds 11:30 – CPI Q/q & Y/y
Fri 11:30 – Retail Sales M/m & Q/q
For a move higher we would like to see the ASX hold 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 7732.
Failure to hold 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 – 15170 (-40 or -0.26%)
A flat week overall for the DAX as it failed to use headwinds from the US equity markets to push higher.
VOLATILITY ALERTS:
Mon 19:30 – IFO Business Climate
Thurs 18:55 – Unemployment Change
Thurs 22:45 – ECB Interest Rate Decision
Thurs 23:00 – CPI M/m
Thurs 23:30 – ECB Monetary Policy Press Conference
For the DAX to continue its move higher we would like to see it close 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 close 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 – 4547 (+73 or +1.63%)
Another dip bought and back to posting new ATH’s – clear skies ahead for further movement on the back of another strong earnings season.
VOLATILITY ALERTS:
Weds 00:00 – New Home Sales & Cb Consumer Confidence Index
Weds 23:30 – Core Durable Goods Orders M/m
Thurs 23:30 – GDP Q/q
Fri 00:00 – Pending Home Sales M/m
Fri 23:30 – Core PCE Price Index M/m & Y/y
For a move higher we would like to see the S&P close above 4550. Should this occur, we will look for a move to 4577, and if momentum is strong we cannot rule out moves to 4635.
If we cannot close above 4550, we could see this market move down into 4530. A break of this level however may result in a quick move down to 4500, and if momentum to the downside remains strong we may see a fast move back down to 4450.
FOREX
AUD/USD – 0.7467 (+44 or +0.59%)
The Aussie Dollar moved higher for a fourth consecutive week but couldn’t quite get a weekly close above the September high…
VOLATILITY ALERTS:
Weds 11:30 – CPI Q/q & Y/y
Fri 11:30 – Retail Sales M/m & Q/q
For a move higher this week, we would like to see it hold above 0.7423. We will then be targeting a move through 0.7500. If we see a strong break and close above this level then we can’t rule out a move to 0.7560.
If this market cannot hold above 0.7423, we could see a move down into 0.7342. A strong break of this level may result in a move into 0.7250, however, any weakness below this level could see a sharp drop into 0.7065.
EUR/USD – 1.1598 (+46 or +0.4%)
VOLATILITY ALERTS:
Thurs 22:45 – ECB Interest Rate Decision
Thurs 23:30 – ECB Monetary Policy Press Conference
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 hold 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 hold 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 (+12 or +0.09%)
The GBP failed it’s re-test of the 200 DMA to finish the week flat.
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 1.3755 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 1.3910. If upside momentum is really strong then a move back into 1.4000 can’t be ruled out.
Should we fail to hold above 1.3755, 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 1.3535.
USD/JPY – 113.49 (-77 or -0.67%)
Unsurprisingly the Dollar Yen has paused at multi-year highs, is this the start of a bigger fade lower or just a pullback in the trend?
VOLATILITY ALERTS:
Weds 00:00 – New Home Sales & Cb Consumer Confidence Index
Weds 23:30 – Core Durable Goods Orders M/m
Thurs 10:50 – Japanese Retail Sales M/m
Thurs 23:30 – GDP Q/q
Fri 00:00 – Pending Home Sales M/m
Fri 23:30 – Core PCE Price Index M/m & Y/y
For a move to the upside, we must now see this market close back above 113.20. Should this occur we will look for a move into 112.25, and if upside momentum is strong we could see a move higher into 111.70 and potentially 111.00.
If we cannot close 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 – 1792 (+25 or +1.41%)
Another flat week for Gold despite some inter-week volatility as markets continue to digest rising inflation concerns.
VOLATILITY ALERTS:
Fri 23:30 – Core PCE Price Index M/m & Y/y
For a move higher we need to see this market hold above 1786. Should this occur we could see a move back into 1814, and any break of this level could see a stronger move into 1850. If momentum is really strong then 1875 cannot be ruled out.
If Gold cannot hold above 1786, we will look for a move back down to 1756. A break below this level could see a move lower into 1740, and if momentum is very strong to the downside we could see a move to 1720.
CRYPTOS
BITCOIN – 60671 (+5961 or +10.9%)
A rather nasty end to the week for Bitcoin after it had ripped through to new ATH’s – but will that weekly close below the previous ATH be telling?
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.
