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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7179 (-148 or -2.02%)
The ASX closed lower every day this week and will now look for support at the August highs.
VOLATILITY ALERTS:
Weds 09:30 – RBA Gov Lowe speaks
Thurs 11:30 – Employment Change and Unemployment Rate
For a move higher we would like to see the ASX close above 7240. Should this occur, a move into 7300 could be expected; and if momentum is strong we cannot rule out moves to 7350 and 7440.
Failure to close above 7240 means a potential move into 7140. 7020 is the next support level down if 7140 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6875.
EUROPE
DAX – 14326 (-220 or -1.51%)
VOLATILITY ALERTS:
Fri 00:15 – ECB Interest Rate Decision and Monetary Policy Statement
Fri 00:45 – ECB Press Conference
Fri 19:30 – German Flash Manufacturing and Services PMI
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 – 3929 (-132 or -3.25%)
Another indecisive week for the SPX – gearing up for a ‘Santa Claus rally’?
VOLATILITY ALERTS:
Weds 00:30 – CPI / Core CPI M/m and Y/y
Thurs 06:00 – FOMC Interest Rate Decision and Statement
Thurs 06:30 – FOMC Press Conference
Fri 00:30 – Core / Retail Sales m/m and Empire Manufacturing Index
Sat 01:45 – Flash Services PMI
For a move higher we would like to see the S&P close 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 close 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 – 0.6796 (+2 or +0.03%)
The Aussie Dollar closed almost completely flat for the week and our levels remain unchanged.
VOLATILITY ALERTS:
Weds 09:30 – RBA Gov Lowe speaks
Thurs 11:30 – Employment Change and Unemployment Rate
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 (-6 or -0.06%)
The Euro was also largely quiet and like the Aussie Dollar, our levels remain unchanged.
VOLATILITY ALERTS:
Weds 00:30 – US CPI / Core CPI M/m and Y/y
Thurs 06:00 – FOMC Interest Rate Decision and Statement
Thurs 06:30 – FOMC Press Conference
Fri 00:15 – ECB Interest Rate Decision and Monetary Policy Statement
Fri 00:45 – ECB Press Conference
Fri 19:15 – French Flash Manufacturing and Services PMI
Fri 19:30 – German Flash Manufacturing and Services PMI
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 – 1.2263 (-28 or -0.23%)
The Cable closed slightly lower but the overall trend remains to the upside.
VOLATILITY ALERTS:
Mon 18:00 – GDP q/q
Tues 18:00 – Claimant Count Change
Tues 22:00 – BoE Gov Bailey speaks
Weds 18:00 – UK CPI Y/y
Thurs 23:00 – BoE Interest Rate Decision
Fri 18:00 – UK Retail Sales
Fri 20:30 – UK Flash Manufacturing and Services PMI
For a move to the upside, we would like to see Cable close 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 push back 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 close 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 – 136.58 (+227 or +1.69%)
A better week for the Dollar Yen as it managed to bounce off the 200 DMA, which remains the key area to watch this week.
VOLATILITY ALERTS:
Weds 00:30 – US CPI / Core CPI M/m and Y/y
Thurs 06:00 – FOMC Interest Rate Decision and Statement
Thurs 06:30 – FOMC Press Conference
For a move to the upside, we must now see this market hold above 135.60. Should this occur we will look for a move into 137.70, and if upside momentum is strong we could see a move higher into 139.25 and potentially 140.
If we cannot hold above 135.60, we could see a move back to test 134.50 before a pause to the downside. A break below this level may result in a sharp move lower into 132.50, and any further breaks to the downside may see a bigger move into 131.40.
COMMODITIES
GOLD – 1797 (-1 or -0.06%)
Gold closed flat and therefore our levels remain the same.
VOLATILITY ALERTS:
Weds 00:30 – US CPI / Core CPI M/m and Y/y
Thurs 06:00 – FOMC Interest Rate Decision and Statement
Thurs 06:30 – FOMC Press Conference
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 – 17147 (+53 or +0.31%)
BTC edged slightly higher but without enough momentum to break the range highs.
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.
