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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7064 (+95 or +1.36%)
A stronger week for the ASX as it looks to recover from the recent sell off.
VOLATILITY ALERTS:
Mon 10:30 – Retail Sales Q/q
Tues 10:30 – NAB Business Confidence
For a move higher we would like to see the ASX hold above 7000. Should this occur, a move into 7091 could be expected; and if momentum is strong we cannot rule out moves to 7202 and 7272.
Failure to hold above 7000 means a potential move back into 6894. 6740 is the next support level down if 6894 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6635.
EUROPE
DAX – 15087 (-295 or -1.92%)
Volatility remained for the Dax as traders reacted with bearish sentiment to a more hawkish Christine Lagarde.
VOLATILITY ALERTS:
Mon 17:00 – Industrial Production
Fri 17:00 – CPI M/m and Y/y
For the DAX to move higher we would like to see it close above 15345. Should this occur then 15585 is the next level ahead. If upside momentum is strong then 15780 and 16000 cannot be ruled out.
To the downside, should we not see it close above 15345, we will look for a move into support at 15050. A strong break and close below this handle and 14779 is the next level down. If downside pressure mounts then 14425 cannot be ruled out.
US
S&P 500 – 4486 (+65 or +1.47%)
US equities moved higher but it was another turbulent week – in particular for big tech earnings.
VOLATILITY ALERTS:
Thurs 23:30 – CPI and Core CPI M/m and Y/y
For a move higher we would like to see the S&P hold above 4482. Should this occur, we will look for a move to 4555; and if momentum is strong we cannot rule out moves to 4600 and 4635.
If we cannot hold above 4482, we could see this market move down into 4432. A break of this level however may result in a quick move down to 4375, and if momentum to the downside remains strong we may see a fast move back down to 4330.
FOREX
AUD/USD – 0.7072 (+77 or +1.1%)
The Aussie Dollar moved closely with US equities with a strong first half of the week v weak end to the week.
VOLATILITY ALERTS:
Mon 10:30 – Retail Sales Q/q
Tues 10:30 – NAB Business Confidence
For a move higher this week, we would like to see it hold above 0.7065. We will then be targeting a move through 0.7105. If we see a strong break and close above this level then we can’t rule out a move to 0.7170.
If this market cannot close above 0.7065, we could see a move down into 0.6995. A strong break of this level may result in a move into 0.6920, however, any weakness below this level could see a sharp drop into 0.6825.
EUR/USD – 1.1449 (+302 or +2.71%)
A hawkish tilt from ECB chair Lagarde saw the Euro rip higher – after months of pain can the Euro sustain a move higher?
VOLATILITY ALERTS:
Thurs 23:30 – US CPI and Core CPI M/m and Y/y
For a move higher we would like to see the Euro hold above 1.1425. Should this occur we could see a move into 1.1500. A break of this level could see this market rally further to 1.1615.
If the EURO cannot hold above 1.1425, we will see a move back into 1.1345. A strong break of this level may result in a move into 1.1225, however, any weakness below this level could see a sharp drop into 1.1155.
GBP/USD – 1.3527 (+134 or +1%)
Back to back rate hikes by the BoE for the first time since 2004 saw the GBP rally – in fact, almost half the MPC wanted an even more aggressive hike!
VOLATILITY ALERTS:
Fri 17:00 – GDP Q/q and M/m
For a move to the upside, we would like to see Cable close above 1.3535 before a break higher through 1.3620. If this market can see a strong close above this level we may then see a strong push back into 1.3670. If upside momentum is really strong then a move back into 1.3750 can’t be ruled out.
Should we fail to hold above 1.3535, we will look for a move down to 1.3435. A break below this level however could see Cable further depreciate to 1.3290 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3198.
USD/JPY – 115.18 (-3 or -0.03%)
The Dollar Yen closed the week almost completely flat and therefore our levels remain unchanged.
VOLATILITY ALERTS:
Thurs 23:30 – CPI and Core CPI M/m and Y/y
For a move to the upside, we must now see this market hold above 114.70. Should this occur we will look for a move into 115.55, and if upside momentum is strong we could see a move higher into 116.10 and potentially 117.
If we cannot hold above 114.70, we could see a move back to test 114.23 before a pause to the downside. A break below this level may result in a sharp move lower into 113.20, and any further breaks to the downside may see a bigger move into 112.25.
COMMODITIES
GOLD – 1808 (+17 or +0.95%)
A steady week for Gold as it once again proves there are buyers there with the support just below 1800.
VOLATILITY ALERTS:
Thurs 23:30 – US CPI and Core CPI M/m and Y/y
For a move higher we need to see this market hold above 1786. Should this occur we could see a move back into 1814, and any break of this level could see a stronger move into 1830. If momentum is really strong then 1850 cannot be ruled out.
If Gold cannot hold above 1786, we will look for a move back down to 1756. A break below this level could see a move lower into 1740, and if momentum is very strong to the downside we could see a move to 1720.
CRYPTOS
BITCOIN – 40621 (+2405 or +6.29%)
Bitcoin ripped higher on Friday and has now broken back through the 40k handle, as well as through the trendline – is the bottom in?
For a move higher we must now see this market hold above 39839. Should this occur we could see a move into 43233 before retesting 44000. If upside momentum is really strong then we can’t rule out 47000.
Failure to hold above 39839 could see a move down to 35050. If selling pressure takes control then we could see a move down to 32300. A close below this level and 29444 can’t be ruled out, maybe even a 27434 print.
