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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7408 (-23 or -0.31%)
Another flat week overall for the ASX as it edges slightly lower.
For a move higher we would like to see the ASX hold above 7400. Should this occur, a move into 7450 could be expected; and if momentum is strong we cannot rule out moves to 7500 and 7600.
Failure to hold above 7400 means a potential move back into 7272. 7202 is the next support level down if 7272 doesn’t hold. If downside momentum is really strong then we could see a sharp move to 7091.
EUROPE
DAX – 15987 (+39 or +0.24%)
The DAX edged higher but all in all, it was a quiet week for this market.
For the DAX to move higher we would like to see it hold above 15780. Should this occur then 16000 is the next level ahead. If upside momentum is strong then 16200 and 16500 cannot be ruled out.
To the downside, should we not see it hold above 15780, we will look for a move into support at 15500. A strong break and close below this handle and 15350 is the next level down. If downside pressure mounts then 15050 cannot be ruled out.
US
S&P 500 – 4667 (+42 or +0.91%)
A 39 year high for the midweek inflation print yet markets seemingly absorbed it, content that it wasn’t higher.
For a move higher we would like to see the S&P hold above 4630. Should this occur, we will look for a move to 4700; and if momentum is strong we cannot rule out moves to 4745 and 4800.
If we cannot hold above 4630, we could see this market move down into 4550. A break of this level however may result in a quick move down to 4482, and if momentum to the downside remains strong we may see a fast move back down to 4432.
FOREX
AUD/USD – 0.7218 (+93 or +1.31%)
The Aussie Dollar was in danger of erasing all its early week gains on Friday but still managed to end the week higher.
For a move higher this week, we would like to see it hold above 0.7170. We will then be targeting a move through 0.7234. If we see a strong break and close above this level then we can’t rule out a move to 0.7343.
If this market cannot close above 0.7170, we could see a move down into 0.7105. A strong break of this level may result in a move into 0.7012, however, any weakness below this level could see a sharp drop into 0.6995.
EUR/USD – 1.1415 (+54 or +0.48%)
The Euro has broken out of its two-month range and now the battle is to hold onto a new trend.
For a move higher we would like to see the Euro hold above 1.1350. Should this occur we could see a move into 1.1425 before a pause. A break of this level could see this market rally further to 1.1500.
If the EURO cannot hold above 1.1350, we will see a move back into 1.1225. A strong break of this level may result in a move into 1.1155, however, any weakness below this level could see a sharp drop into 1.1105.
GBP/USD – 1.3681 (+90 or +0.66%)
A weaker USD helped strengthen the GBP despite political concerns with PM Johnson under significant pressure to resign.
For a move to the upside, we would like to see Cable hold above 1.3670 before a break higher through 1.3750. If this market can see a strong close above this level we may then see a strong push back into 1.3834. If upside momentum is really strong then a move back into 1.3892 can’t be ruled out.
Should we fail to hold above 1.3670, we will look for a move down to 1.3620. A break below this level however could see Cable further depreciate to 1.3534 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3435.
USD/JPY – 114.18 (-136 or -1.18%)
The Dollar Yen fell through several key support levels as traders sold their dollars across the board.
For a move to the upside, we must now see this market close above 114.23. Should this occur we will look for a move into 114.69, and if upside momentum is strong we could see a move higher into 115.55 and potentially 116.10.
If we cannot hold above 114.23, we could see a move back to test 113.20 before a pause to the downside. A break below this level may result in a sharp move lower into 112.25, and any further breaks to the downside may see a bigger move into 111.65.
COMMODITIES
GOLD – 1817 (+21 or +1.17%)
Gold is up against key resistance yet again at 1830 – can it find the catalyst to breakthrough?
For a move higher we need to see this market hold above 1814. Should this occur we could see a move back into 1830, and any break of this level could see a stronger move into 1850. If momentum is really strong then 1875 cannot be ruled out.
If Gold cannot hold above 1814, we will look for a move back down to 1786. A break below this level could see a move lower into 1756, and if momentum is very strong to the downside we could see a move to 1740.
CRYPTOS
BITCOIN – 42918 (+1065 or +2.54%)
Bitcoin managed to find a bounce but continues to trade with the risk-on/risk-off sentiment.
For a move higher we must now see this market hold above 42000. Should this occur we could see a move into 44000 before retesting 47000. If upside momentum is really strong then we can’t rule out 50000.
Failure to hold above 42000 could see a move down to 40000. If selling pressure takes control then we could see a move down to 37200. A close below this level and 35000 can’t be ruled out.
