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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6969 (-101 or -1.43%)
Another dip lower for the ASX but it did find an important bounce at one of our key levels…
VOLATILITY ALERTS:
Tues 11:30 – Retail Sales M/m
Tues 14:30 – RBA Interest Rate Decision
Weds 13:30 – RBA Governor Lowe Speech
Thurs 11:30 – Building Approvals M/m, NAB Quarterly Business Confidence & Trade Balance
Fri 11:30 – RBA Monetary Policy Statement
For a move higher we would like to see the ASX close above 7000. Should this occur, a move into 7091 could be expected; and if momentum is strong we cannot rule out moves to 7202 and 7272.
Failure to close above 7000 means a potential move back into 6894. 6740 is the next support level down if 6894 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6635.
EUROPE
DAX – 15417 (-35 or -0.23%)
The DAX endured a very choppy week but closed out relatively flat.
VOLATILITY ALERTS:
Mon 20:00 – EU GDP Q/q
Mon 22:00 – German CPI M/m & Y/y
Tues 17:00 – German Retail Sales M/m & Y/y
Tues 18:55 – Markit Manufacturing PMI & Unemployment Rate
Weds 19:00 – Markin Services and Composite PMI (German AND EU)
Thurs 22:45 – ECB Interest Rate Decision
Thurs 23:30 – ECB Monetary Policy Press Conference
Fri 20:00 – EU Retail Sales
For the DAX to move higher we would like to see it close above 15585. Should this occur then 15780 is the next level ahead. If upside momentum is strong then 16000 and 16200 cannot be ruled out.
To the downside, should we not see it close above 15585, we will look for a move into support at 15350. A strong break and close below this handle and 15050 is the next level down. If downside pressure mounts then 14779 cannot be ruled out.
US
S&P 500 – 4421 (+40 or +0.91%)
A volatile week for US equities which saw the SPX edge slightly higher – is this volatility set to remain a little longer yet?
VOLATILITY ALERTS:
Weds 00:00 – ISM Manufacturing PMI & Jolts Jobs Openings
Weds 23:15 – ADP Nonfarm Employment Change
Fri 00:00 – ISM Non-Manufacturing PMI
Fri 23:30 – Non-Farm Payrolls
For a move higher we would like to see the S&P hold above 4375. Should this occur, we will look for a move to 4432; and if momentum is strong we cannot rule out moves to 4482 and 4555.
If we cannot hold above 4375, we could see this market move down into 4330. A break of this level however may result in a quick move down to 4286, and if momentum to the downside remains strong we may see a fast move back down to 4233.
FOREX
AUD/USD – 0.6995 (-177 or -2.47%)
The Aussie Dollar sold off aggressively and now is threatening to break new yearly lows – can it hold on?
VOLATILITY ALERTS:
Tues 11:30 – Retail Sales M/m
Tues 14:30 – RBA Interest Rate Decision
Weds 13:30 – RBA Governor Lowe Speech
Thurs 11:30 – Building Approvals M/m, NAB Quarterly Business Confidence & Trade Balance
Fri 11:30 – RBA Monetary Policy Statement
For a move higher this week, we would like to see it hold above 0.6995. We will then be targeting a move through 0.7065. If we see a strong break and close above this level then we can’t rule out a move to 0.7105.
If this market cannot close above 0.6995, we could see a move down into 0.6920. A strong break of this level may result in a move into 0.6825, however, any weakness below this level could see a sharp drop into 0.6750.
EUR/USD – 1.1147 (-195 or -1.72%)
A weekly close below the recent range leaves the Euro in big trouble – will USD bulls take advantage of this position?
VOLATILITY ALERTS:
Mon 20:00 – EU GDP Q/q
Weds 19:00 – Markin Services and Composite PMI (EU)
Thurs 22:45 – ECB Interest Rate Decision
Thurs 23:30 – ECB Monetary Policy Press Conference
Fri 20:00 – EU Retail Sales
Fri 23:30 – US Non-Farm Payrolls
For a move higher we would like to see the Euro close above 1.1155. Should this occur we could see a move into 1.1225 before a pause. A break of this level could see this market rally further to 1.1350.
If the EURO cannot close above 1.1155, we will see a move back into 1.1105. A strong break of this level may result in a move into 1.1000, however, any weakness below this level could see a sharp drop into 1.0876.
GBP/USD – 1.3393 (-159 or -1.17%)
The Cable continued its move lower as flow went into the USD thanks to a hawkish Fed – can the BoE provide any relief for the GBP this week?
VOLATILITY ALERTS:
Thurs 22:00 – BoE Interest Rate Decision
For a move to the upside, we would like to see Cable close above 1.3435 before a break higher through 1.3535. If this market can see a strong close above this level we may then see a strong push back into 1.3620. If upside momentum is really strong then a move back into 1.3670 can’t be ruled out.
Should we fail to hold above 1.3435, we will look for a move down to 1.3290. A break below this level however could see Cable further depreciate to 1.3198 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3055.
USD/JPY – 115.21 (+153 or +1.35%)
The Dollar Yen is back to test a crucial resistance level, is there enough strength in this move to break through to new highs?
VOLATILITY ALERTS:
Mon 10:50 – Japan Retail Sales
Weds 00:00 – ISM Manufacturing PMI & Jolts Jobs Openings
Weds 23:15 – ADP Nonfarm Employment Change
Fri 00:00 – ISM Non-Manufacturing PMI
Fri 23:30 – Non-Farm Payrolls
For a move to the upside, we must now see this market hold above 114.70. Should this occur we will look for a move into 115.55, and if upside momentum is strong we could see a move higher into 116.10 and potentially 117.
If we cannot hold above 114.70, we could see a move back to test 114.23 before a pause to the downside. A break below this level may result in a sharp move lower into 113.20, and any further breaks to the downside may see a bigger move into 112.25.
COMMODITIES
GOLD – 1791 (-43 or -2.34%)
Gold once again fails to break higher and showed significant weakness post-Fed with a strong USD pushing it lower.
VOLATILITY ALERTS:
Fri 23:30 – Non-Farm Payrolls
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 1830. If momentum is really strong then 1850 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 – 38216 (-43 or -2.34%)
Cryptos spent the wage range bound and now the next move could be seen through a break of the weekly high and low.
For a move higher we must now see this market hold above 37746. Should this occur we could see a move into 38741 before retesting 39839. If upside momentum is really strong then we can’t rule out 43233.
Failure to hold above 35050 could see a move down to 32300. If selling pressure takes control then we could see a move down to 29444 (which was mentioned by our Director in our LIVE Chat Room). A close below this level and 27434 can’t be ruled out, maybe even a 25000 print.
