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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7130 (+20 or +0.28%)
The ASX closed the week almost flat as parliamentary elections take place across the weekend.
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 – 14070 (+23 or +0.16%)
Like the ASX, the DAX closed the week flat – levels remain unchanged.
VOLATILITY ALERTS:
Mon 18:00 – German IFO Business Climate
Tues 17:30 – German Flash Manufacturing PMI and Flash Services PMI
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 – 3887 (-89 or -2.24%)
Sellers remain in full control of US equities as the overvalued tech sector continues to be sold.
VOLATILITY ALERTS:
Weds 02:20 – Fed Chair Powell Speaks
Weds 22:30 – Core Durable Goods Orders M/m
Thurs 04:00 – FOMC Meeting Minutes
Thurs 22:30 – Prelim GDP
Fri 22:30 – Core PCE Index M/m
For a move higher we would like to see the S&P close above 3965. Should this occur, we will look for a move to 4035; and if momentum is strong we cannot rule out moves to 4140 and 4230.
If we cannot close above 3965, we could see this market move down into 3870. A break of this level however may result in a quick move down to 3830, and if momentum to the downside remains strong we may see a fast move back down to 3725.
FOREX
AUD/USD – 0.7042 (+154 or +2.24%)
The Aussie Dollar closed higher for the week despite US equities moving lower – can this bounce be sustained?
For a move higher this week, we would like to see it hold above 0.6995. We will then be targeting a move through 0.7060. If we see a strong break and close above this level then we can’t rule out a move to 0.7100. Should momentum to the upside be really strong then 0.7170 could be targeted.
If this market cannot hold above 0.6995, we could see a move down into 0.6930. A strong break of this level may result in a move into 0.6850, however, any weakness below this level could see a sharp drop into 0.6775.
EUR/USD – 1.0561 (+158 or +1.52%)
A strong week for the Euro as sellers failed to capitalise on the recent downside breakout of consolidation.
VOLATILITY ALERTS:
Weds 18:00 – ECB President Lagarde Speaks
For a move higher we would like to see the Euro hold above 1.0495. Should this occur we could see a move into 1.0575. A break of this level could see this market rally further to 1.0635 and 1.0755.
If the EURO cannot close above 1.0495, we will see a move into 1.0445. A strong break of this level may result in a move into 1.0355, however, any weakness below this level could see a sharp drop into parity at 1.0215.
GBP/USD – 1.2492 (+249 or +2.03%)
The GBP finally caught a bid but with the UK economy slowing, the macro backdrop doesn’t appear great for the currency.
VOLATILITY ALERTS:
Tues 02:15 – BoE Governor Bailey speaks
For a move to the upside, we would like to see Cable hold 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 hold 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 – 127.90 (-109 or -0.85%)
The Dollar Yen closed lower for the second week running as flow went back into the traditional haven assets of the Yen and Bonds.
VOLATILITY ALERTS:
Weds 02:20 – Fed Chair Powell Speaks
Weds 22:30 – Core Durable Goods Orders M/m
Thurs 04:00 – FOMC Meeting Minutes
Thurs 22:30 – Prelim GDP
Fri 22:30 – Core PCE Index M/m
For a move to the upside, we must now see this market close 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 close 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 – 1845 (+40 or +2.22%)
Gold bulls have disappeared, with key levels of support unable to hold and now back trading at prices seen prior to the Russian invasion.
VOLATILITY ALERTS:
Weds 02:20 – Fed Chair Powell Speaks
Weds 22:30 – Core Durable Goods Orders M/m
Thurs 04:00 – FOMC Meeting Minutes
Thurs 22:30 – Prelim GDP
Fri 22:30 – Core PCE Index M/m
For a move higher we need to see this market hold above 1830. Should this occur we could see a move back into 1850, and any break of this level could see a stronger move into 1875. If momentum is strong then 1915 cannot be ruled out.
If Gold cannot hold above 1830, we will look for a move back down to 1800. A break below this level could see a move lower into 1785, and if momentum is very strong to the downside we could see a move to 1750.
CRYPTOS
BITCOIN – 29515 (-206 or -0.7%)
A very quiet week by Bitcoin’s own standards sees it close flat – our levels remain unchanged.
For a move higher we must now see this market close above 30000. Should this occur we could see a move into 33000 before retesting 35000. If upside momentum is really strong then we can’t rule out 37265.
Failure to close above 30000 could see a move down to 29300. If selling pressure takes control then we could see a move down to 28500. A close below this level and 25875 can’t be ruled out, maybe even a 23675 print.
