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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7465 (+95 or +1.29%)
The ASX faded the previous week’s loss and is now back testing key resistence.
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 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 – 16082 (+311 or +1.97%)
The DAX managed to close the week at new highs – is this the start of a new trend higher?
VOLATILITY ALERTS:
Tues 21:05 – Zew Economic Sentiment Indicator
Weds 18:00 – CPI M/m
For the DAX to continue its move higher we would like to see it hold above 16050. Should this occur then 16150 is the next level ahead. If upside momentum is strong then 16500 and 16750 cannot be ruled out.
To the downside, should we not see it hold above 16050, we will look for a move into support at 16000. A strong break and close below this handle and 15800 is the next level down. If downside pressure mounts then 15500 cannot be ruled out.
US
S&P 500 – 4704 (+84 or +1.82%)
Another extremely strong week for the SPX as markets stay in rally mode thanks to strong earnings, a dovish taper and NFP beats.
VOLATILITY ALERTS:
Thurs 00:30 – CPI & Core CPI
Sat 02:00 – Jolts Jobs Openings
For a move higher we would like to see the S&P hold above 4700. Should this occur, we will look for a move to 4750, and if momentum is strong we cannot rule out moves to 4780 and 4800.
If we cannot hold above 4700, we could see this market move down into 4635. A break of this level however may result in a quick move down to 4600, and if momentum to the downside remains strong we may see a fast move back down to 4550.
FOREX
AUD/USD – 0.7397 (-125 or -1.66%)
The Aussie Dollar wasn’t able to hold onto key support and is now in danger of fully fading the recent week’s gains.
VOLATILITY ALERTS:
Thurs 11:30 – Employment Change
For a move higher this week, we would like to see it close back 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 close 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 0.7222.
EUR/USD – 1.1569 (+6 or +0.05%)
A flat week for the Euro and our levels remain unchanged.
For a move higher we would like to see the Euro hold above 1.1525. Should this occur we could see a move into 1.1615 before a pause. A break of this level could see this market rally further to 1.1738.
If the EURO cannot hold above 1.1525, we could see a move into 1.1425. A strong break of this level may result in a move into 1.1325, however, any weakness below this level could see a sharp drop into 1.1238.
GBP/USD – 1.3495 (-198 or -1.45%)
A surprise by the BoE (not raising rates) saw the GBP sell-off – but with a rate hike still expected is the Cable back trading at a relative discount?
VOLATILITY ALERTS:
Thurs 18:00 – GDP Q/q & M/m
For a move to the upside, we would like to see Cable close above 1.3534 before a break higher through 1.3620. If this market can see a strong close above this level we may then see a strong push back into 1.3666. If upside momentum is really strong then a move back into 1.3755 can’t be ruled out.
Should we fail to close above 1.3534, we will look for a move down to 1.3435. A break below this level however could see Cable further depreciate to 1.3290 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3200.
USD/JPY – 113.38 (-60 or -0.53%)
The Dollar Yen spent another week range trading so our levels remain unchanged.
VOLATILITY ALERTS:
Thurs 00:30 – CPI & Core CPI
Sat 02:00 – Jolts Jobs Openings
For a move to the upside, we must now see this market hold above 113.70. Should this occur we will look for a move into 114.55, and if upside momentum is strong we could see a move higher into 115.47 and potentially 116.11.
If we cannot hold above 113.70, 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 – 1817 (+35 or +1.96%)
A strong Friday saw Gold close the week above 1800 for the first time since August – can it build on this momentum?
VOLATILITY ALERTS:
Thurs 00:30 – US CPI & Core CPI
For a move higher we need to see this market hold above 1814. Should this occur we could see a move back into 1833, 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 close above 1814, we will look for a move back down to 1786. A break below this level could see a move lower into 1756, and if momentum is very strong to the downside we could see a move to 1740.
CRYPTOS
BITCOIN – 61790 (-540 or -0.87%)
A rather choppy week for Bitcoin and very flat, by its own standards, so our levels remain unchanged.
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.
