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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7008 (+228 or +3.36%)
The ASX rallied for a second week straight as risk appetite returned to global markets.
VOLATILITY ALERTS:
Tues 14:30 – RBA Interest Rate Decision
Fri 11:30 – RBA Monetary Policy Statement
For a move higher we would like to see the ASX hold above 6980. Should this occur, a move into 7030 could be expected; and if momentum is strong we cannot rule out moves to 7135 and 7195
Failure to hold above 6980 means a potential move into 6875. 6745 is the next support level down if 6875 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6650.
EUROPE
DAX – 13535 (+369 or +2.8%)
The DAX has broken out of consolidation – the trend higher continues.
For the DAX to move higher we would like to see it hold above 13250. Should this occur then 13600 is the next level ahead. If upside momentum is strong then 13890 and 14140 cannot be ruled out.
To the downside, should we not see it hold above 13250, we will look for a move into support at 12965. A strong break and close below this handle and 12635 is the next level down. If downside pressure mounts then 12445 cannot be ruled out.
US
S&P 500 – 4129 (+169 or +4.27%)
The SPX staged an impressive rally but must now break through the May high for this trend to be sustained.
VOLATILITY ALERTS:
Tues 00:00 – ISM Manufacturing PMI
Weds 00:00 – Jolts Jobs Openings
Thurs 00:00 – ISM Services PMI
Fri 22:30 – Non Farm Payrolls
For a move higher we would like to see the S&P hold above 4085. Should this occur, we will look for a move to 4160; and if momentum is strong we cannot rule out moves to 4210 and 4300.
If we cannot hold above 4085, 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 – 0.6988 (+66 or +0.95%)
A disappointing end to the week for the Aussie Dollar as it couldn’t quite match the rally seen in equities.
VOLATILITY ALERTS:
Tues 14:30 – RBA Interest Rate Decision
Fri 11:30 – RBA Monetary Policy Statement
For a move higher this week, we would like to see it hold above 0.6945. We will then be targeting a move through 0.6995. If we see a strong break and close above this level then we can’t rule out a move to 0.7060. Should momentum to the upside be really strong then 0.7100 could be targeted.
If this market cannot hold above 0.6945, we could see a move down into 0.6900. A strong break of this level may result in a move into 0.6830, however, any weakness below this level could see a sharp drop into 0.6755.
EUR/USD – 1.0226 (+11 or +0.11%)
The Euro has fallen asleep, which doesn’t bode well heading into the traditional ‘summer markets’ period.
VOLATILITY ALERTS:
Fri 22:30 – Non Farm Payrolls
For a move higher we would like to see the Euro hold above 1.0215. Should this occur we could see a move into 1.0355. A break of this level could see this market rally further to 1.0445 and 1.05.
If the EURO cannot hold above 1.0215, we will see a move into 1.0075. A strong break of this level may result in a move into 1.0000, however, any weakness below this level could see a sharp drop into parity at 0.9875.
GBP/USD – 1.2180 (+76 or +0.63%)
The Cable continues to climb on the back of USD weakness but we saw a strong Friday reversal off a key overhead level – a turning point?
VOLATILITY ALERTS:
Thurs 21:00 – BoE interest rate decision
For a move to the upside, we would like to see Cable hold above 1.2160 before a break higher into 1.2245. If this market can see a strong close above this level we may then see a strong push back into 1.2330. If upside momentum is really strong then a move back into 1.2430 can’t be ruled out.
Should we fail to hold above 1.2160, we will look for a move down to 1.2075. A break below this level however could see Cable further depreciate to 1.1955 by the week’s end and if momentum is very weak we cannot rule out a move to 1.1825.
USD/JPY – 133.21 (-286 or -2.1%)
The Dollar Yen is rolling over and tumbled heavily for the second week running – more downside this week?
VOLATILITY ALERTS:
Tues 00:00 – ISM Manufacturing PMI
Weds 00:00 – Jolts Jobs Openings
Thurs 00:00 – ISM Services PMI
Fri 22:30 – Non Farm Payrolls
For a move to the upside, we must now see this market close above 133.72. Should this occur we will look for a move into 134.55, and if upside momentum is strong we could see a move higher into 135.3 and potentially 137.2.
If we cannot close above 133.72, we could see a move back to test 131.32 before a pause to the downside. A break below this level may result in a sharp move lower into 130.25, and any further breaks to the downside may see a bigger move into 129.45.
COMMODITIES
GOLD – 1766 (+39 or +2.26%)
Gold continues to rally after hitting and bouncing off the 2021 lows a few weeks ago.
VOLATILITY ALERTS:
Fri 22:30 – Non Farm Payrolls
For a move higher we need to see this market hold above 1765. Should this occur we could see a move into 1785, and any break of this level could see a stronger move into 1800. If momentum is strong then 1815 cannot be ruled out.
If Gold cannot hold above 1765, we will look for a move down to 1750. A break below this level could see a move lower into 1720, and if momentum is very strong to the downside we could see a move to 1700.
CRYPTOS
BITCOIN – 23945 (+1364 or +6.04%)
BTC enjoyed the bid in risk assets across the board but there are still signs that sellers haven’t gone away just yet.
For a move higher we must now see this market hold above 23675. Should this occur we could see a move into 25875 before retesting 28530. If upside momentum is really strong then we can’t rule out 30985.
Failure to hold above 23675 could see a move into 21715. If selling pressure takes control then we could see a move down to 20000. A close below this level and 17560 can’t be ruled out, maybe even a 14000 print.
