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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7284 (-76 or -1.03%)
The DAX edged slightly higher, closing at new yearly highs – can new buyers be found here?
For a move higher we would like to see the ASX close above 7310. Should this occur, a move above 7385 should be expected, and if momentum is strong we cannot rule out moves to 7465 and 7555.
EUROPE
DAX (40) – 15983 (+33 or +0.21%)
Like the ASX, the DAX also edged slightly higher but not enough for our levels to change.
VOLATILITY ALERTS:
Thurs 22:15 – ECB Interest Rate Decision
Thurs 22:45 – ECB Press Conference
For the DAX to move higher we would like to see it hold above 15970. Should this occur then 16090 is the next level ahead. If upside momentum is strong then 16270 and 16500 cannot be ruled out.
To the downside, should we not see it hold above 15970, we will look for a move into support at 15820. A strong break and close below this handle and 15650 is the next level down. If downside pressure mounts then 15515 cannot be ruled out.
US
S&P 500 – 4139 (-31 or -0.74%)
The SPX endured a choppy week of trading with markets undecided on how to digest messages from central banks.
VOLATILITY ALERTS:
Weds 22:30 – CPI and Core CPI m/m & y/y
Thurs 22:30 – PPI and Core PPI m/m & y/y
Sat 00:00 – Prelim UoM Consumer Sentiment
For a move higher we would like to see the S&P close above 4150. Should this occur, we will look for a move through 4215, and if momentum is strong we cannot rule out moves to 4320 and 4425.
If we cannot close above 4150, we could see this market move down into 4095. A break of this level however may result in a quick move down to 3965, and if momentum to the downside remains strong we may see a fast move back down to 3915.
FOREX
AUD/USD – 0.6752 (+138 or +2.09%)
The biggest mover of the week throughout G10 FX was the Aussie Dollar as it reacted to a hawkish hike from the RBA.
For a move higher this week we would like to see it close above 0.6755. 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 0.6892. Should momentum to the upside be really strong then 0.6985 could be targeted.
If this market cannot close above 0.6755, we could see a move down to 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 0.6585.
EUR/USD – 1.1018 (+2 or +0.02%)
The Euro almost closed completely flat for the second week in a row. Range bound.
VOLATILITY ALERTS:
Weds 22:30 – CPI and Core CPI m/m & y/y
Thurs 22:30 – PPI and Core PPI m/m & y/y
Sat 00:00 – Prelim UoM Consumer Sentiment
For a move higher we would like to see the Euro hold above 1.0940. Should this occur we should see a move above 1.1115. A break of this level could see this market rally further to 1.1215 and 1.1385.
If the EURO cannot hold above 1.0940 we will see a move into 1.0760. A strong break of this level may result in a move into 1.0600, however, any weakness below this level could see a move into 1.0470.
GBP/USD – 1.2630 (+64 or +0.51%)
The Cable climbed to new yearly highs and starts to outperform the Euro.
VOLATILITY ALERTS:
Thurs 21:00 – BoE Monetary Policy Statement and Interest Rate Decision
Thurs 21:30 – BoE Gov Bailey Speaks
Fri 16:00 – GDP m/m
For a move to the upside, we would like to see Cable hold above 1.2600 before a break higher into 1.2755. If this market can see a strong close above this level we may then see a strong pushback into 1.2975 If upside momentum is really strong then a move back into 1.3160 can’t be ruled out.
Should we fail to hold above 1.2600, we will look for a move down to 1.2405. A break below this level however could see Cable further depreciate to 1.2275 by the week’s end. And if momentum is very weak we cannot rule out a move to 1.2145.
USD/JPY – 134.82 (-145 or -1.06%)
A textbook fade of last week’s breakout and reversal off a key technical level sees the Dollar yen lower.
VOLATILITY ALERTS:
Weds 22:30 – CPI and Core CPI m/m & y/y
Thurs 22:30 – PPI and Core PPI m/m & y/y
Sat 00:00 – Prelim UoM Consumer Sentiment
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 139.10 and potentially 140.30.
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 – 2016 (+27 or +1.36%)
A bizarre week for Gold with plenty of volatility, a rapid upside breakout into new ATH and then a full fade of the move.
VOLATILITY ALERTS:
Weds 22:30 – CPI and Core CPI m/m & y/y
Thurs 22:30 – PPI and Core PPI m/m & y/y
For a move higher we need to see this market hold above 2015. Should this occur we could see a move into 2030; and any break of this level could see a stronger move into 2050. If momentum is strong then 2075 cannot be ruled out.
If Gold cannot hold above 2015, we can see a move down to 2000. A break below this level could see a move lower into 1960; and if momentum is very strong to the downside we could see a move to 1910.
CRYPTOS
BITCOIN – 29033 (-635 or -2.14%)
BTC trading within a triangular pattern and reaching the ‘pointy end’ – watch out for a break.
For a move higher we must now see this market hold above 28000. Should this occur we could see a move into 31050 before retesting 32590. If upside momentum is really strong then we can’t rule out 36850.
Failure to hold above 28000 could see a move into 25875. If selling pressure takes control then we could see a move down to 23675. A close below this level and 21715 can’t be ruled out. 20000 is the more psychological handle below that.
