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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7519 (+83 or +1.12%)
The ASX saw another break higher and could well be the first of the major indices to retest all-time highs.
VOLATILITY ALERTS:
Tues 14:30 – RBA Interest Rate and Monetary Policy Statement
Fri 11:30 – RBA Financial Stability Review
For a move higher we would like to see the ASX hold above 7485. Should this occur, a move into 7545 could be expected; and if momentum is strong we cannot rule out moves to 7640 and 7800.
Failure to hold above 7485 means a potential move back into 7400. 7272 is the next support level down if 7485 doesn’t hold. If downside momentum is really strong then we could see another leg down into 7200.
EUROPE
DAX – 14449 (+95 or +0.66%)
The DAX closed the week slightly higher as traders digested Germany’s hottest inflation print in 4 decades.
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 (-1 or -0.02%)
The SPX erased all of its early week gains to close the week completely flat – levels remain unchanged.
VOLATILITY ALERTS:
Weds 00:00 – ISM Services PMI
Thurs 04:00 – FOMC Meeting Minutes
Thurs 23:00 – FOMC Member Bullard speaks
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 – 0.7497 (-16 or -0.21%)
The Aussie Dollar has paused at October 2021 high and spent the week range-bound – levels remain the same.
VOLATILITY ALERTS:
Tues 14:30 – RBA Interest Rate and Monetary Policy Statement
Fri 11:30 – RBA Financial Stability Review
For a move higher this week, we would like to see it hold above 0.7475. 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 0.7475, we could see a move down into 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 – 1.1048 (+65 or +0.59%)
The Euro edged higher for the week but also saw early week gains erase in the latter part.
VOLATILITY ALERTS:
Thurs 04:00 – FOMC Meeting Minutes
For a move higher we would like to see the Euro hold 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 hold 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 – 1.3112 (-69 or -0.52%)
A minor divergence between the GBP and EURO as the cable edged lower for the week – but again, only marginally and it was mainly range bound.
VOLATILITY ALERTS:
Mon 19:05 – 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 (+45 or +0.37%)
The Yen was more settled and looked to be steady after the sharp upside breakout seen in the past weeks of trading.
VOLATILITY ALERTS:
Weds 00:00 – ISM Services PMI
Thurs 04:00 – FOMC Meeting Minutes
Thurs 23:00 – FOMC Member Bullard speaks
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 (-33 or -1.69%)
More range trading for the shiny metal as it looks to hold onto key support.
VOLATILITY ALERTS:
Thurs 04:00 – FOMC Meeting Minutes
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 – 46581 (+441 or +0.96%)
BTC is definitely back after successful breaking above the Feb/March double top – though it did face stiff resistance at the 200 DMA.
For a move higher we must now see this market hold above 44000. Should this occur we could see a move into 48570 before retesting 50000. If upside momentum is really strong then we can’t rule out 52150.
Failure to hold above 44000 could see a move down to 43233. If selling pressure takes control then we could see a move down to 39839. A close below this level and 35050 can’t be ruled out, maybe even a 32300 print.
