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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6650 (-25 or -0.2%)
After a volatile week on the markets, we saw the ASX top out at 6784 and form a weekly Doji.
VOLATILITY ALERTS:
Tues 11:05 – RBA Assistant Governor Bullock Speech
Tues 11:30 – RBA Meeting Minutes
For a move higher we would like to see the ASX hold above 6788. Should this occur, a move and break back above 6822 could see a nice pushback above 6866 followed by 6919; once this is broken and closed above we cannot rule out moves to 6980.
Failure to hold above 6774 means a potential move into 6526. 6455 is the next support level down if 6500 doesn’t hold and If downside momentum is really strong then we could see another leg down into 6350.
EUROPE
DAX – 12437 (+249 or +0.67%)
VOLATILITY ALERTS:
Wed 17:00 – GBP CPI
Wed 20:00 – EUR CPI
Bears remain in control of the downtrend channel, can the bulls hold the line at 12000?
For the DAX to move higher we would like to see it close above 12687. Should this occur then 13108 is the next level ahead. If upside momentum is strong then 13548 followed by 13960 cannot be ruled out.
To the downside, should we not see it close above 12255, we will look for a move into support at 111857. Unfortunately a strong break and close below this handle could see 11548 with final support near 11314, below that could be a problem.
US
S&P 500 – 3583 (-70 or -2.37%)
VOLATILITY ALERTS:
Wed 11:30 PM – Building Permits
Fri 11:30 PM – Existing Home Sales
For a move higher we would like to see the S&P close above 3711. Should this occur, we will look for a move to 3745; and if momentum is strong we cannot rule out moves to 3794 through to 3850.
If we cannot close above 3611, we could see this market move down into 3563. A break of this level could see a quick move down to 3474, and if the momentum continues then the downside remains strong we may see a fast move back down to 3441 and maybe a 3398 print.
FOREX
AUD/USD – 0.6792 (-59 or -0.86%)
The downtrend for the Aussie Dollar remains strong.
VOLATILITY ALERTS:
Thurs 11:30 – Employment Change
For a move higher this week, we would like to see it close above 0.63514. We will then be targeting a move through 0.6440. If we see a strong break and close above this level then we can’t rule out a move to 0.6480. Should momentum to the upside be really strong then 0.65476 could be targeted.
If this market cannot close above 0.6252, we could see a move down into 0.61372. A strong break of this level may result in a move into 0.6090, however, any weakness below this level could see a sharp drop into 0.59777.
EUR/USD – 0.97443 (-100 or -1.1%)
The Euro has broken below 1.0000 ‘parity’ handle and has seen a strong rejection. Support turned Resistance.
VOLATILITY ALERTS:
Thurs 08:00 – EU Leaders Summit
For a move higher we would like to see the Euro close above 1.00. Should this occur we could see a move into 1.0180. A break of this level could see this market rally further to 1.0180 and 1.02.
If the EURO cannot hold above 1.0000, we will see a move into 0.9650. A strong break of this level may result in a move into 0.95366, however, any weakness below this level could see a sharp drop into parity at 0.94020.
GBP/USD – 1.1867 (+84 or +0.73%)
After the surprising crash in Cable, it has recovered and looks to be aiming for a higher weekly close.
VOLATILITY ALERTS:
Wed 17:00 – CPI
Thurs 17:00 – Retail sales
For a move to the upside, we would like to see Cable close above 1.13799 before a break higher into 1.14972. If this market can see a strong close above this level we may then see a strong pushback into 1.16100. If upside momentum is really strong then a move back into 1.17 can’t be ruled out.
Should we fail to close above 1.11080, we will look for a move down to 1.09165. A break below this level however could see Cable further depreciate to 1.06941 by the week’s end and if momentum is very weak we cannot rule out a move to 1.05088.
USD/JPY – 148.462 (+363 or +2.44%)
The Dollar Yen continues to break higher.
VOLATILITY ALERTS:
Fri 10:30- Core CPI
For a move to the upside, we must now see this market hold above 147.1. Should this occur we will look for a move into 148.9, and if upside momentum is strong we could see a move higher into 141 and potentially 152.
If we cannot hold above 147.1, we could see a move back to test 146.3 before a pause to the downside. A break below this level may result in a sharp move lower into 141, and any further breaks to the downside may see a bigger move into 140.455.
COMMODITIES
GOLD – 1648 (-51 or -3.08%)
For a move higher we need to see this market close above 1683. Should this occur we could see a move into 1700, and any break of this level could see a stronger move into 1730. If momentum is strong then 1766 cannot be ruled out.
If Gold cannot close above 1650, we will look for a move down to 1610. A break below this level could see a move lower into 1580, and if momentum is very strong to the downside we could see a move to 1550.
CRYPTOS
BITCOIN – 19223 (-212 or +1.1%)
Volatility in BTC has decreased and the price is currently stuck in a tight channel with downside pressure continuing to build.
For a move higher we must now see this market hold above 20573. Should this occur we could see a move into 22050 before retesting 22951. If upside momentum is really strong then we can’t rule out 23000.
Failure to hold above 20000 could see a move into 17900. If selling pressure takes control then we could see a move down to 15000. A close below this level and 12605 can’t be ruled out, maybe even a 10700 print.
