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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6961 (+138 or +2.02%)
A strong end to the week and now bulls will target the August high.
VOLATILITY ALERTS:
Tues 11:30 – NAB Business Confidence
Thurs 11:30 – Employment Change & Unemployment Rate
For a move higher we would like to see the ASX hold above 6875. Should this occur, a move into 6980 could be expected; and if momentum is strong we cannot rule out moves to 7030 and 7135.
Failure to hold above 6875 means a potential move into 6745. 6650 is the next support level down if 6745 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6535.
EUROPE
DAX – 13125 (+415 or +3.27%)
The DAX found strong support at one of our key levels and now could target the descending trend line (see above).
For the DAX to move higher we would like to see it hold above 12965. Should this occur then 13250 is the next level ahead. If upside momentum is strong then 13600 and 13890 cannot be ruled out.
To the downside, should we not see it hold above 12965, we will look for a move into support at 12635. A strong break and close below this handle and 12445 is the next level down. If downside pressure mounts then 12300 cannot be ruled out.
US
S&P 500 – 4066 (+134 or +3.41%)
A strong second half of the week saw the SPX deliver another ‘bear market bounce’ but can the bulls sustain this move?
VOLATILITY ALERTS:
Tues 22:30 – US CPI m/m & US Core CPI m/m
Weds 22:30 – US PPI m/m & US Core PPI m/m
Thurs 22:30 – US Core Retail Sales m/m & Retail Sales m/m
Sat 00:00 – Prelim UoM Consumer Sentiment
For a move higher we would like to see the S&P hold above 4035. Should this occur, we will look for a move to 4035; and if momentum is strong we cannot rule out moves to 4160 and 4244.
If we cannot hold above 4035, we could see this market move down into 3965, A break of this level however may result in a quick move down to 3915, and if momentum to the downside remains strong we may see a fast move back down to 3840.
FOREX
AUD/USD – 0.6844 (+37 or +0.54%)
A ripping Friday saw the Aussie Dollar erase all of its prior weekly losses and end the week slightly higher – double bottom printed?
VOLATILITY ALERTS:
Tues 11:30 – NAB Business Confidence
Thurs 11:30 – Employment Change & Unemployment Rate
For a move higher this week, we would like to see it close above 0.6850. We will then be targeting a move through 0.6945. If we see a strong break and close above this level then we can’t rule out a move to 0.6995. Should momentum to the upside be really strong then 0.7060 could be targeted.
If this market cannot close above 0.6850, we could see a move down into 0.6765. A strong break of this level may result in a move into 0.6715, however, any weakness below this level could see a sharp drop into 0.6670.
EUR/USD – 1.0040 (+84 or +0.84%)
The Euro held firm after the ECB delivered on its record 75 bps hike forecast.
VOLATILITY ALERTS:
Tues 22:30 – US CPI m/m & US Core CPI m/m
Weds 22:30 – US PPI m/m & US Core PPI m/m
Thurs 22:30 – US Core Retail Sales m/m & Retail Sales m/m
Sat 00:00 – US Prelim UoM Consumer Sentiment
For a move higher we would like to see the Euro hold above 1.0000. Should this occur we could see a move into 1.0072. A break of this level could see this market rally further to 1.0215 and 1.0355.
If the EURO cannot hold above 1.0000, we will see a move into 0.9950. A strong break of this level may result in a move into 0.9875, however, any weakness below this level could see a move into 0.9700.
GBP/USD – 1.1588(+79 or +0.69%)
The Cable bounced from its March 2020 pandemic lows but is still in a rather precarious position.
VOLATILITY ALERTS:
Mon 16:00 – GDP m/m
Weds 16:00 – UK CPI y/y
For a move to the upside, we would like to see Cable close above 1.1640 before a break higher into 1.1760. If this market can see a strong close above this level we may then see a strong push back into 1.1825. If upside momentum is really strong then a move back into 1.1955 can’t be ruled out.
Should we fail to close above 1.1640, we will look for a move down to 1.1490. A break below this level however could see Cable further depreciate to 1.1400 by the week’s end and if momentum is very weak we cannot rule out a move to 1.1330.
USD/JPY – 142.61 (+242 or +1.73%)
A highly volatile week for the Dollar Yen as it traded within a 500 point range.
VOLATILITY ALERTS:
Tues 22:30 – US CPI m/m & US Core CPI m/m
Weds 22:30 – US PPI m/m & US Core PPI m/m
Thurs 22:30 – US Core Retail Sales m/m & Retail Sales m/m
Sat 00:00 – Prelim UoM Consumer Sentiment
For a move to the upside we must now see this market hold above 142. Should this occur we will look for a move into 144.9, and if upside momentum is strong we could see a move higher into 147.75 and potentially 150.
If we cannot hold above 142, we could see a move back to test 140 before a pause to the downside. A break below this level may result in a sharp move lower into 139.25; and any further breaks to the downside may see a bigger move into 137.20.
COMMODITIES
GOLD – 1716 (+4 or +0.23%)
Gold edges slightly higher but not enough for our levels to change.
VOLATILITY ALERTS:
Tues 22:30 – US CPI m/m & US Core CPI m/m
Thurs 22:30 – US Core Retail Sales m/m & Retail Sales m/m
For a move higher we need to see this market close above 1720. Should this occur we could see a move into 1740, and any break of this level could see a stronger move into 1750. If momentum is strong then 1765 cannot be ruled out.
If Gold cannot close above 1720, we will look for a move down to 1710. A break below this level could see a move lower into 1697, and if momentum is very strong to the downside we could see a move to 1680.
CRYPTOS
BITCOIN – 21658 (+1713 or +8.59%)
BTC rose with risk assets across the board as it bounced back from the recent range breakout.
For a move higher we must now see this market close strongly above 21715. Should this occur we could see a move into 21715 before retesting 23675. If upside momentum is really strong then we can’t rule out 25875.
Failure to close above 21715 could see a move into 20000. If selling pressure takes control then we could see a move down to 18700. A close below this level and 17560 can’t be ruled out, maybe even a 14000 print.
