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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7432 (-153 or -2.02%)
A sea of red for the ASX this week as bulls couldn’t quite make their mark on new all-time highs.
VOLATILITY ALERTS:
Weds 12:00 – RBA Gov Lowe speaks
Thurs 11:30 – Employment Change and Unemployment Rate
Fri 09:30 – RBA Gov Lowe speaks
For a move higher we would like to see the ASX close above 7440. Should this occur, a move above 7495 should be expected, and if momentum is strong we cannot rule out moves to 7555 and 7620.
Failure to close above 7440 means a potential move into 7350. 7310 is the next support level down if 7350 doesn’t hold. If downside momentum is really strong then we could see another leg down into 7215.
EUROPE
DAX – 15334 (-89 or -0.58%)
The DAX rejected off key resistance on several occasions but closed the week relatively flat, meaning our levels don’t change.
For the DAX to move higher we would like to see it hold 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 hold 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 – 4089 (-45 or -1.09%)
The SPX edged lower as investors weigh up a potentially ‘higher for longer’ Fed funds rate – inflation data this week could be BIG.
VOLATILITY ALERTS:
Weds 00:30 – US CPI & Core CPI m/m & y/y
Thurs 00:30 – US Retail Sales m/m
Fri 00:30 – PPI & Core PPI m/m
For a move higher we would like to see the S&P close above 4095. Should this occur, we will look for a move to 4145, and if momentum is strong we cannot rule out moves to 4215 and 4320.
If we cannot close above 4095, we could see this market move down into 4040. 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 – 0.6918 (-4 or -0.06%)
Completely flat week for the Aussie Dollar from open to close – levels remain the same.
VOLATILITY ALERTS:
Weds 12:00 – RBA Gov Lowe speaks
Thurs 11:30 – Employment Change and Unemployment Rate
Fri 09:30 – RBA Gov Lowe speaks
For a move higher this week we would like to see it hold above 0.6915. We will then be targeting a move through 0.6960. If we see a strong break and close above this level then we can’t rule out a move to 0.7000. Should momentum to the upside be really strong then 0.7045 could be targeted.
If this market cannot hold above 0.6915, we could see a move down into 0.6870. A strong break of this level may result in a move into 0.6830, however, any weakness below this level could see a sharp drop into 0.6715.
EUR/USD – 1.0677 (-117 or -1.08%)
The Euro edged lower as flow returned for the USD, for the same reasons discussed above with the SPX.
VOLATILITY ALERTS:
Weds 00:30 – US CPI & Core CPI m/m & y/y
Thurs 00:30 – US Retail Sales m/m
Fri 00:30 – PPI & Core PPI m/m
For a move higher we would like to see the Euro close above 1.0760. Should this occur we could see a move into 1.0940. A break of this level could see this market rally further to 1.1115 and 1.1180.
If the EURO cannot close above 1.0760 we will see a move into 1.0600. A strong break of this level may result in a move into 1.0470, however, any weakness below this level could see a move into parity at 1.0355.
GBP/USD – 1.2054 (+1 or +0.01%)
Like the Aussie Dollar, a completely flat week for the Cable, as it just holds above the rising channel support.
VOLATILITY ALERTS:
Weds 18:00 – UK CPI y/y
Fri 18:00 – UK Retail Sales m/m
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 – 131.43 (+25 or +0.19%)
The Dollar Yen edged higher as the BoJ made a ‘surprise’ appointment as new Governor.
VOLATILITY ALERTS:
Weds 00:30 – US CPI & Core CPI m/m & y/y
Thurs 00:30 – US Retail Sales m/m
Fri 00:30 – PPI & Core PPI m/m
For a move to the upside we must now see this market hold above 131.40. Should this occur we will look for a move into 132.50, and if upside momentum is strong we could see a move higher into 134.50 and potentially 137.55
If we cannot hold above 131.40, we could see a move back to test 129.50 before a pause to the downside. A break below this level may result in a sharp move lower into 126.90; and any further breaks to the downside may see a bigger move into 125.
COMMODITIES
GOLD – 1865 (0 / 0%)
A week where Gold opened and closed at the exact same level! US CPI awaits…
VOLATILITY ALERTS:
Weds 00:30 – US CPI & Core CPI m/m & y/y
Thurs 00:30 – US Retail Sales m/m
Fri 00:30 – PPI & Core PPI m/m
For a move higher we need to see this market hold above 1850. Should this occur we could see a move into 1870; and any break of this level could see a stronger move into 1895. If momentum is strong then 1910 cannot be ruled out.
If Gold cannot hold above 1850, we can see a move down to 1830. A break below this level could see a move lower into 1805; and if momentum is very strong to the downside we could see a move to 1785.
CRYPTOS
BITCOIN – 22002 (-883 or -3.86%)
BTC sold off as signs of a near-term top had been showing – bulls now looking for support at one of our key levels.
For a move higher we must now see this market hold above 21715. Should this occur we could see a move into 23675 before retesting 25875. If upside momentum is really strong then we can’t rule out 28000.
Failure to hold above 21715 could see a move into 20000. If selling pressure takes control then we could see a move down to 18700. A close below this level and 175005 can’t be ruled out, maybe even a 15515 print.
