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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6728 (-233 or -3.35%)
The ASX reversed off one of our key levels and drifted lower along with global equities.
VOLATILITY ALERTS:
Tues 11:30 – Monetary Policy Meeting Minutes
For a move higher we would like to see the ASX close above 6745. Should this occur, a move into 6875 could be expected; and if momentum is strong we cannot rule out moves to 6980 and7030.
Failure to close above 6745 means a potential move into 6650. 6535 is the next support level down if 6650 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6480.
EUROPE
DAX – 12762 (-363 or -2.77%)
A firm reversal off the excellent descending trend line as bears remain in full control.
VOLATILITY ALERTS:
Fri 17:30 – German Flash Manufacturing and Services PMI
For the DAX to move higher we would like to see it close 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 close 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 – 3883 (-183 or -4.5%)
Bears reaffirmed their control of the SPX following a hawkish set of data releases throughout the week.
VOLATILITY ALERTS:
Thurs 04:00 – FOMC Statement
Thurs 04:00 – FOMC Press Conference
Sat 04:00 – Fed Chair Powell Speaks
For a move higher we would like to see the S&P close above 3915. Should this occur, we will look for a move to 3965; and if momentum is strong we cannot rule out moves to 4035 and 4160.
If we cannot close above 3915, we could see this market move down into 3840. A break of this level however may result in a quick move down to 3740, and if momentum to the downside remains strong we may see a fast move back down to 3665.
FOREX
AUD/USD – 0.6719 (-125 or -1.83%)
AUD bulls just about managed to hold onto the multi-year low on Friday but can sellers force it lower?
VOLATILITY ALERTS:
Tues 11:30 – Monetary Policy Meeting Minutes
For a move higher this week, we would like to see it close above 0.6745. We will then be targeting a move through 0.6850. If we see a strong break and close above this level then we can’t rule out a move to 0.6945. Should momentum to the upside be really strong then 0.6995 could be targeted.
If this market cannot close above 0.6745, we could see a move down into 0.6715. A strong break of this level may result in a move into 0.6670, however, any weakness below this level could see a sharp drop into 0.6580.
EUR/USD – 1.0014 (-26 or -0.26%)
The Euro edged lower but overall remained relatively flat for the week.
VOLATILITY ALERTS:
Thurs 04:00 – FOMC Statement
Thurs 04:00 – FOMC Press Conference
Fri 17:30 – German Flash Manufacturing and Services PMI
Sat 04:00 – Fed Chair Powell Speaks
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 – 1.1422(-166 or -1.43%)
The Cable continued its slide lower as it posted new 37 year lows but managed to bounce at our downside level.
VOLATILITY ALERTS:
Thurs 21:00 – BoE Interest Rate Announcement
Fri 18:30 – UK Flash Manufacturing and Services PMI
For a move to the upside, we would like to see Cable close above 1.1490 before a break higher into 1.1640. If this market can see a strong close above this level we may then see a strong pushback into 1.1760. If upside momentum is really strong then a move back into 1.1825 can’t be ruled out.
Should we fail to close above 1.1490, we will look for a move down to 1.1400. A break below this level however could see Cable further depreciate to 1.1330 by the week’s end and if momentum is very weak we cannot rule out a move to 1.1250.
USD/JPY – 142.94 (+33 or +0.23%)
Despite flow into the USD across other pairs this week, the Dollar Yen didn’t really move and is up against a huge level overhead.
VOLATILITY ALERTS:
Thurs 04:00 – FOMC Statement
Thurs 04:00 – FOMC Press Conference
Fri 23:45 – US Flash Services PMI
Sat 04:00 – Fed Chair Powell Speaks
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 – 1675 (-41 or -2.39%)
Gold broke lower with selling unsurprisingly aggressive below the multi-year support level, though bulls did manage a strong close to the week.
VOLATILITY ALERTS:
Thurs 04:00 – FOMC Statement
Thurs 04:00 – FOMC Press Conference
Sat 04:00 – Fed Chair Powell Speaks
For a move higher we need to see this market close above 1680. Should this occur we could see a move into 1695; and any break of this level could see a stronger move into 1710. If momentum is strong then 1720 cannot be ruled out.
If Gold cannot close above 1680, we will look for a move down to 1650. A break below this level could see a move lower into 1644; and if momentum is very strong to the downside we could see a move to 1612.
CRYPTOS
BITCOIN – 19726 (-1938 or -8.95%)
BTC moved lower post US CPI, in line with other risk-assets, though we saw a pause again around the 20k area.
For a move higher we must now see this market close strongly above 20000. 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 20000 could see a move into 18700. If selling pressure takes control then we could see a move down to 17560. A close below this level and 14000 can’t be ruled out, maybe even a 12325 print.
