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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7436 (+82 or +1.12%)
The ASX is back above its 200 DMA and sits within striking distance of all-time highs!
VOLATILITY ALERTS:
Tues 11:30 – Retail Sales M/m
For a move higher we would like to see the ASX hold above 7400. Should this occur, a move into 7485 could be expected; and if momentum is strong we cannot rule out moves to 7485 and 7640.
Failure to hold above 7400 means a potential move back into 7272. 7090 is the next support level down if 7272 doesn’t hold. If downside momentum is really strong then we could see another leg down into 7200.
EUROPE
DAX – 14354 (-70 or -0.49%)
The DAX edged lower but in truth spent the week sideways – which direction will we see the break?
For the DAX to move higher we would like to see it hold above 14140. Should this occur then 14780 is the next level ahead. If upside momentum is strong then 15050 and 15345 cannot be ruled out.
To the downside, should we not see it hold above 14140, we will look for a move into support at 13610. A strong break and close below this handle and 13250 is the next level down. If downside pressure mounts then 12445 cannot be ruled out.
US
S&P 500 – 4546 (+77 or +1.72%)
A third straight weekly gain for the SPX as it broke through its 200, 100 and 50 DMA’s – a significant turning point in the trend?
VOLATILITY ALERTS:
Weds 01:00 – Jolts Jobs Openings and CB Consumer Confidence
Thurs 23:30 – Core PCE Price Index M/m
Fri 23:30 – Non-Farm Payrolls and Unemployment Rate
For a move higher we would like to see the S&P hold above 4480. Should this occur, we will look for a move to 4555; and if momentum is strong we cannot rule out moves to 4600 and 4655.
If we cannot hold above 4480, we could see this market move down into 4430. 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 4330.
FOREX
AUD/USD – 0.7513 (+100 or +1.35%)
Another strong week for the Aussie Dollar but now faces resistance from the October 2021 high.
VOLATILITY ALERTS:
Tues 11:30 – Retail Sales M/m
For a move higher this week, we would like to see it hold above 0.7473. We will then be targeting a move through 0.7530. If we see a strong break and close above this level then we can’t rule out a move to 0.7600. Should momentum to the upside be really strong then 0.7640 could be targeted.
If this market cannot hold above 0.7473, we could see a move down to 0.7392. A strong break of this level may result in a move into 0.7345, however, any weakness below this level could see a sharp drop into 0.7285.
EUR/USD – 1.0983 (-67 or -0.61%)
The Euro couldn’t maintain its upside momentum from the previous week and edged lower, with plenty of daily ‘chop’ and indecision around.
VOLATILITY ALERTS:
Fri 23:30 – Non-Farm Payrolls and Unemployment Rate
For a move higher we would like to see the Euro close above 1.1000. Should this occur we could see a move into 1.1105. A break of this level could see this market rally further to 1.1155 and 1.1225.
If the EURO cannot close above 1.1000, we will see a move back into 1.0875. A strong break of this level may result in a move into 1.0780, however, any weakness below this level could see a sharp drop into 1.0575.
GBP/USD – 1.3181 (+1 or +0.01%)
After a midweek rejection to the upside, the Cable closed the week almost completely flat – our levels remain unchanged.
VOLATILITY ALERTS:
Mon 22:00 – BoE Gov Bailey speaks
For a move to the upside, we would like to see Cable close above 1.3198 before a break higher into 1.3290. If this market can see a strong close above this level we may then see a strong push back into 1.3435. If upside momentum is really strong then a move back into 1.3534 can’t be ruled out.
Should we fail to close above 1.3198, we will look for a move down to 1.3056. A break below this level however could see Cable further depreciate to 1.2980 by the week’s end and if momentum is very weak we cannot rule out a move to 1.2855.
USD/JPY – 122.09 (+294 or +2.47%)
The weakest Yen since 2015 – we are yet to see counter-trend traders step in, should we expect them this week?
VOLATILITY ALERTS:
Weds 01:00 – Jolts Jobs Openings and CB Consumer Confidence
Thurs 23:30 – Core PCE Price Index M/m
Fri 23:30 – Non-Farm Payrolls and Unemployment Rate
For a move to the upside, we must now see this market hold above 121.75. Should this occur we will look for a move into 123.65, and if upside momentum is strong we could see a move higher into 125.20 and potentially 125.85.
If we cannot hold above 121.75, we could see a move back to test 120.40 before a pause to the downside. A break below this level may result in a sharp move lower into 119.35, and any further breaks to the downside may see a bigger move into 118.55.
COMMODITIES
GOLD – 1957 (+37 or +1.93%)
Gold is looking to get going again… are we set for another run higher?
VOLATILITY ALERTS:
Thurs 23:30 – Core PCE Price Index M/m
Fri 23:30 – Non-Farm Payrolls and Unemployment Rate
For a move higher we need to see this market hold above 1915. Should this occur we could see a move back into 1965, and any break of this level could see a stronger move into 2000. If momentum is strong then 2015 cannot be ruled out.
If Gold cannot hold above 1915, we will look for a move back down to 1900. A break below this level could see a move lower into 1875, and if momentum is very strong to the downside we could see a move to 1830.
CRYPTOS
BITCOIN – 44545 (+2696 or +6.44%)
BTC moved higher in line with the global risk-on trade seen but now faces stiff resistance at the recent double top level.
For a move higher we must now see this market hold above 43233. Should this occur we could see a move into 44000 before retesting 48570. If upside momentum is really strong then we can’t rule out 50000.
Failure to hold above 43233 could see a move down to 39839. If selling pressure takes control then we could see a move down to 35050. A close below this level and 32300 can’t be ruled out, maybe even a 29444 print.
