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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7327 (+74 or +1.02%)
The ASX climbed higher although it hit resistance towards the end of the week and saw some gains given back.
VOLATILITY ALERTS:
Tues 14:30 – RBA Cash Rate
Weds 11:30 – GDP m/m
For a move higher we would like to see the ASX hold above 7300. Should this occur, a move into 7350 could be expected; and if momentum is strong we cannot rule out moves to 7440 and 7620.
Failure to hold above 7300 means a potential move into 7240. 7120 is the next support level down if 7240 doesn’t hold. If downside momentum is really strong then we could see another leg down into 7020
EUROPE
DAX – 14546 (-1 or -0.01%)
The DAX closed flat and our levels remain the same.
For the DAX to move higher we would like to see it hold above 14265. Should this occur then 14710 is the next level ahead. If upside momentum is strong then 14915 and 15050 cannot be ruled out.
To the downside, should we not see it hold above 14265, we will look for a move into support at 13970. A strong break and close below this handle and 13565 is the next level down. If downside pressure mounts then 13375 cannot be ruled out.
US
S&P 500 – 4061 (+34 or +0.84%)
The SPX edged higher but have we now seen a rejection and turning point at the long-term trend resistance?
VOLATILITY ALERTS:
Tues 02:00 – ISM Services PMI
Sat 00:30 – Core PPI m/m and Prelim UoM Consumer Sentiment
For a move higher we would like to see the S&P hold above 3965. Should this occur, we will look for a move to 4095; and if momentum is strong we cannot rule out moves to 4145 and 4215.
If we cannot hold above 3965, we could see this market move down into 3915. A break of this level, however, may result in a quick move down to 3840; and if momentum to the downside remains strong we may see a fast move back down to 3740.
FOREX
AUD/USD – 0.6794 (+44 or +0.65%)
The Aussie Dollar noticed its 6th weekly gain out of 7 and could be a proxy for the China reopening trade.
VOLATILITY ALERTS:
Tues 14:30 – RBA Cash Rate
Weds 11:30 – GDP m/m
For a move higher this week, we would like to see it hold above 0.6715. We will then be targeting a move through 0.6830. If we see a strong break and close above this level then we can’t rule out a move to 0.6915. Should momentum to the upside be really strong then 0.6960 could be targeted.
If this market cannot hold above 0.6715, we could see a move down into 0.6670. A strong break of this level may result in a move into 0.6580, however, any weakness below this level could see a sharp drop into 0.6485.
EUR/USD – 1.0540 (+147 or +1.41%)
The Euro is breaking out of resistance and firmly holding above the 200 DMA, have we seen the best of the long dollar trade?
For a move higher we would like to see the Euro hold above 1.0470. Should this occur we could see a move into 1.0600. A break of this level could see this market rally further to 1.0760 and 1.0940.
If the EURO cannot hold above 1.0470 we will see a move into 1.0355. A strong break of this level may result in a move into 1.0215, however, any weakness below this level could see a move into parity at 1.0070.
GBP/USD – 1.2291 (+200 or +1.65%)
The Cable continues its impressive ascendency as it looks to break through the July/ August highs.
For a move to the upside, we would like to see Cable hold above 1.2275 before a break higher into 1.2400. If this market can see a strong close above this level we may then see a strong pushback into 1.2600 If upside momentum is really strong then a move back into 1.2755 can’t be ruled out.
Should we fail to hold above 1.2275, we will look for a move down to 1.2145. A break below this level however could see Cable further depreciate to 1.1930 by the week’s end and if momentum is very weak we cannot rule out a move to 1.1740.
USD/JPY – 134.31 (-481 or -3.46%)
The Dollar Yen has closed strongly below its 200 DMA and now looks set to continue its trend lower.
VOLATILITY ALERTS:
Tues 02:00 – ISM Services PMI
Sat 00:30 – Core PPI m/m and Prelim UoM Consumer Sentiment
For a move to the upside we must now see this market close above 134.50. Should this occur we will look for a move into 135.60, and if upside momentum is strong we could see a move higher into 137.70 and potentially 139.25.
If we cannot close above 134.50, we could see a move back to test 132.50 before a pause to the downside. A break below this level may result in a sharp move lower into 131.40; and any further breaks to the downside may see a bigger move into 129.50.
COMMODITIES
GOLD – 1798 (+44 or +2.51%)
Gold has been rallying and now needs to break through the August highs.
For a move higher we need to see this market hold above 1785. Should this occur we could see a move into 1805; and any break of this level could see a stronger move into 1830. If momentum is strong then 1850 cannot be ruled out.
If Gold cannot hold above 1785, we need to see it hold at 1765. A break below this level could see a move lower into 1735; and if momentum is very strong to the downside we could see a move to 1720.
CRYPTOS
BITCOIN – 17094 (+573 or +3.47%)
BTC is trying for an upside break but is there enough momentum to sustain the move?
For a move higher we must now see this market close above 17510. Should this occur we could see a move into 18700 before retesting 20000. If upside momentum is really strong then we can’t rule out 21715.
Failure to close above 17510 could see a move into 15515. If selling pressure takes control then we could see a move down to 14000. A close below this level and 12325 can’t be ruled out, maybe even a 10650 print.
