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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7214 (-135 or -1.84%)
The ASX bear trend remains with a lower close after a lower close.
VOLATILITY ALERTS:
Weds 11:30 – CPI y/y and GDP q/q
For a move higher we would like to see the ASX close firmly above 7215. Should this occur, a move above 7310 should be expected; and if momentum is strong we cannot rule out moves to 7440 and 7495.
Failure to close above 7215 means a potential move into 7135. 7030 is the next support level down if 7135 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6915.
EUROPE
DAX – 15237 (-289 or -1.86%)
The DAX continued to range trade but the downside levels are now under significant pressure.
For the DAX to move higher we would like to see it close above 15325. Should this occur then 15515 is the next level ahead. If upside momentum is strong then 15730 and 15970 cannot be ruled out.
To the downside, should we not see it close above 15325, we will look for a move into support at 15050. A strong break and close below this handle and 14915 is the next level down. If downside pressure mounts then 14710 cannot be ruled out.
US
S&P 500 – 3968 (-109 or -2.67%)
Hot PCE inflation data saw rates markets price in a more aggressive Fed and as such equities fell.
VOLATILITY ALERTS:
Weds 02:00 – CB Consumer Confidence
Thurs 02:00 – ISM Manufacturing PMI
Sat 02:00 – ISM Services PMI
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 3915; and if momentum is strong we cannot rule out moves to 3810 and 3715.
If we cannot hold above 3965, we could see this market move down into 4040. A break of this level however may result in a quick move down to 4095; and if momentum to the downside remains strong we may see a fast move back down to 4115.
FOREX
AUD/USD – 0.6725 (-153 or -2.22%)
Markets see the Aussie as the weakest of the G10 currency Dollar crosses and as such was sold aggressively as flow went into the USD.
VOLATILITY ALERTS:
Weds 11:30 – CPI y/y and GDP q/q
For a move higher this week we would like to see it hold above 0.6715. We will then be targeting a move through 0.6825. If we see a strong break and close above this level then we can’t rule out a move to 0.6870. Should momentum to the upside be really strong then 0.6915 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 0.6585, however any weakness below this level could see a sharp drop into 0.6525.
EUR/USD – 1.0545 (-148 or -1.38%)
A week all about USD strength, is the trend set until the next FOMC?
For a move higher we would like to see the Euro close above 1.0600. Should this occur we could see a move into 1.0760. A break of this level could see this market rally further to 1.0940 and 1.1115.
If the EURO cannot close above 1.0600 we will see a move into 1.0470. A strong break of this level may result in a move into 1.0355, however any weakness below this level could see a move into 1.0280.
GBP/USD – 1.1939 (-101 or -0.84%)
The Cable was rejected at the rising channel resistance but was the least impacted by Dollar bullishness, positive signs?
VOLATILITY ALERTS:
Weds 21:00 – BoE Gov Bailey speaks
For a move to the upside, we would like to see Cable close above 1.2145 before a break higher into 1.2275. If this market can see a strong close above this level we may then see a strong push back into 1.2400 If upside momentum is really strong then a move back into 1.2600 can’t be ruled out.
Should we fail to close above 1.2145, we will look for a move down to 1.1930. A break below this level however could see Cable further depreciate to 1.1740 by the week’s end and if momentum is very weak we cannot rule out a move to 1.1610.
USD/JPY – 136.47 (+234 or +1.74%)
A strong upside breakout on Friday sees the Dollar Yen continue its ascendency.
VOLATILITY ALERTS:
Tues 15:10 – BoJ Gov-Designate Ueda speaks
Weds 02:00 – CB Consumer Confidence
Thurs 02:00 – ISM Manufacturing PMI
Sat 02:00 – ISM Services PMI
For a move to the upside we must now see this market hold above 134.50. Should this occur we will look for a move into 137.55, and if upside momentum is strong we could see a move higher into 139.45 and potentially 142.25.
If we cannot hold 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 – 1810 (-31 or -1.68%)
Gold bears remain in control with any rallies short lived and sold into.
For a move higher we need to see this market close above 1830. Should this occur we could see a move into 1850; and any break of this level could see a stronger move into 1870. If momentum is strong then 1895 cannot be ruled out.
If Gold cannot close above 1830, we can see a move down to 1805. A break below this level could see a move lower into 1785; and if momentum is very strong to the downside we could see a move to 1765.
CRYPTOS
BITCOIN – 23231 (-1449 or -5.87%)
BTC has been stuck at a key level for the past two weeks and signs of a downside breakout are appearing.
For a move higher we must now see this market close above 23675. Should this occur we could see a move into 25875 before retesting 28000. If upside momentum is really strong then we can’t rule out 31000.
Failure to close above 23675 could see a move into 21715. If selling pressure takes control then we could see a move down to 20000. A close below this level and 18700 can’t be ruled out, maybe even a 17500 print.
