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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7342 (-3 or -0.04%)
The ASX tumbled with other global indices as the RBA became the latest hawkish central bank.
For a move higher we would like to see the ASX close above 7200. Should this occur, a move into 7272 could be expected; and if momentum is strong we cannot rule out moves to 7400 and 7485.
Failure to close above 7200 means a potential move back into 7095. 7000 is the next support level down if 7095 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6910.
EUROPE
DAX – 13645 (-259 or -1.86%)
The DAX continues to put in lower highs as sellers remain in full control.
For the DAX to move higher we would like to see it close 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 close 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 – 4104 (-38 or -0.92%)
An incredible volatile week of trading yet the SPX closes almost flat.
VOLATILITY ALERTS:
Weds 22:30 – US CPI & Core CPI
Thurs 22:30 – US PPI & Core PPI
For a move higher we would like to see the S&P close above 4140. Should this occur, we will look for a move to 4230; and if momentum is strong we cannot rule out moves to 4285 and 4330.
If we cannot close above 4140, we could see this market move down into 4035. A break of this level however may result in a quick move down to 3965, and if momentum to the downside remains strong we may see a fast move back down to 3870.
FOREX
AUD/USD – 0.7072 (+13 or +0.18%)
Like the SPX, a highly volatile intraweek trade yet the Aussie Dollar closes the week almost completely flat.
For a move higher this week, we would like to see it hold above 0.7060. We will then be targeting a move through 0.7100. If we see a strong break and close above this level then we can’t rule out a move to 0.7170. Should momentum to the upside be really strong then 0.7220 could be targeted.
If this market cannot hold above 0.7060, we could see a move down into 0.6995. A strong break of this level may result in a move into 0.6930, however, any weakness below this level could see a sharp drop into 0.6850.
EUR/USD – 1.0543 (+2 or +0.02%)
A week of consolidation for the Euro against the USD as it holds onto key support surprisingly well.
VOLATILITY ALERTS:
Weds 22:30 – US CPI & Core CPI
Thurs 22:30 – US PPI & Core PPI
For a move higher we would like to see the Euro close above 1.0572. Should this occur we could see a move into 1.0635. A break of this level could see this market rally further to 1.0720 and 1.0780.
If the EURO cannot close above 1.0572, we will see a move into 1.0495. A strong break of this level may result in a move into 1.0445, however, any weakness below this level could see a sharp drop into 1.0355.
GBP/USD – 1.2336 (-239 or -1.9%)
The GBP didn’t like the comments coming out of the BoE this week and saw more aggressive selling – despite a fourth monthly rate hike in a row.
For a move to the upside, we would like to see Cable close above 1.2392 before a break higher into 1.2585. If this market can see a strong close above this level we may then see a strong push back into 1.2678. If upside momentum is really strong then a move back into 1.2855 can’t be ruled out.
Should we fail to close above 1.2392, we will look for a move down to 1.2250. A break below this level however could see Cable further depreciate to 1.2160 by the week’s end and if momentum is very weak we cannot rule out a move to 1.2075.
USD/JPY – 130.52 (+67 or +0.52%)
The Dollar Yen’s march upward continued – new highs incoming?
VOLATILITY ALERTS:
Weds 22:30 – US CPI & Core CPI
Thurs 22:30 – US PPI & Core PPI
For a move to the upside, we must now see this market hold above 129. Should this occur we will look for a move into 130.85, and if upside momentum is strong we could see a move higher into 132.35 and potentially 133.75.
If we cannot hold above 129, we could see a move back to test 127.75 before a pause to the downside. A break below this level may result in a sharp move lower into 125.85, and any further breaks to the downside may see a bigger move into 125.20.
COMMODITIES
GOLD – 1882 (-13 or -0.69%)
Gold moved lower for the third straight week but did find a bounce at the long term downtrend line support.
VOLATILITY ALERTS:
Weds 22:30 – US CPI & Core CPI
Thurs 22:30 – US PPI & Core PPI
For a move higher we need to see this market close above 1915. Should this occur we could see a move back into 1935, and any break of this level could see a stronger move into 1965. If momentum is strong then 2000 cannot be ruled out.
If Gold cannot close 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 1850.
CRYPTOS
BITCOIN – 34420 (-4106 or -10.66%)
BTC sold off in line with the selling in US tech equities this week – there is now a big test at the long term ascending trend line.
For a move higher we must now see this market close above 37625. Should this occur we could see a move into 39555 before retesting 43233. If upside momentum is really strong then we can’t rule out 48570.
Failure to close above 37625 could see a move down to 35050. If selling pressure takes control then we could see a move down to 32300. A close below this level and 29300 can’t be ruled out, maybe even a 28500 print.
