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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7110 (-19 or -0.27%)
The ASX endured a volatile week but the weekly candle looks interesting with a significant pin bar being printed – the start of a new move higher?
VOLATILITY ALERTS:
Tues 11:30 – Monetary Policy Meeting Minutes
Weds 11:30 – Wage Price Index
Thurs 11:30 – Unemployment Change
For a move higher we would like to see the ASX close above 7200. Should this occur, a move into 7272 could be expected; and if momentum is strong we cannot rule out moves to 7400 and 7485.
Failure to close above 7200 means a potential move back into 7095. 7000 is the next support level down if 7095 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6910.
EUROPE
DAX – 13980 (+335 or +2.46%)
The DAX has been holding up slightly better than some of its peers – albeit it’s clear that sellers remain in control.
For the DAX to move higher we would like to see it close above 14140. Should this occur then 14780 is the next level ahead. If upside momentum is strong then 15050 and 15345 cannot be ruled out.
To the downside, should we not see it close above 14140, we will look for a move into support at 13610. A strong break and close below this handle and 13250 is the next level down. If downside pressure mounts then 12445 cannot be ruled out.
US
S&P 500 – 4104 (-128 or -3.12%)
Another grim week for US equities despite the bounce on Friday – every rally is being sold back into, telling?
VOLATILITY ALERTS:
Tues 22:30 – US Retail Sales M/m
For a move higher we would like to see the S&P close above 4035. Should this occur, we will look for a move to 4140; and if momentum is strong we cannot rule out moves to 4230 and 4285.
If we cannot close above 4035, we could see this market move down into 3965. A break of this level however may result in a quick move down to 3870; and if momentum to the downside remains strong we may see a fast move back down to 3830.
FOREX
AUD/USD – 0.6888 (-184 or -2.6%)
USD bulls appear to have finally caught up with the AUD – which is also struggling with the global ‘risk off’ sentiment.
VOLATILITY ALERTS:
Weds 11:30 – Wage Price Index
Tues 11:30 – Monetary Policy Meeting Minutes
For a move higher this week, we would like to see it close above 0.6930. We will then be targeting a move through 0.6995. If we see a strong break and close above this level then we can’t rule out a move to 0.7060. Should momentum to the upside be really strong then 0.7100 could be targeted.
If this market cannot hold above 0.6930, we could see a move down into 0.6850. A strong break of this level may result in a move into 0.6775, however, any weakness below this level could see a sharp drop into 0.6685.
EUR/USD – 1.0403 (-140 or -1.33%)
The Euro broke out of recent consolidation to close just above a huge technical support level – can it find a bid here?
For a move higher we would like to see the Euro close above 1.0445. Should this occur we could see a move into 1.0495. A break of this level could see this market rally further to 1.0575 and 1.0635.
If the EURO cannot close above 1.0445, we will see a move into 1.0355. A strong break of this level may result in a move into 1.0215, however, any weakness below this level could see a sharp drop into parity at 1.000.
GBP/USD – 1.2243 (-93 or -0.75%)
The GBP’s freefall continued, and like with other risk assets, any rally continued to be faded.
VOLATILITY ALERTS:
Tues 00:15 – Monetary Policy Report Hearings
For a move to the upside, we would like to see Cable close above 1.2392 before a break higher into 1.2585. If this market can see a strong close above this level we may then see a strong push back into 1.2678. If upside momentum is really strong then a move back into 1.2855 can’t be ruled out.
Should we fail to close above 1.2392, we will look for a move down to 1.2250. A break below this level however could see Cable further depreciate to 1.2160 by the week’s end and if momentum is very weak we cannot rule out a move to 1.2075.
USD/JPY – 128.99 (-153 or -1.17%)
The Dollar Yen saw a pause with its first week in the red since late February.
VOLATILITY ALERTS:
Tues 22:30 – US Retail Sales M/m
Weds 04:00 – Fed Chair Powell Speaks
For a move to the upside we must now see this market hold above 129. Should this occur we will look for a move into 130.85, and if upside momentum is strong we could see a move higher into 132.35 and potentially 133.75.
If we cannot hold above 129, we could see a move back to test 127.75 before a pause to the downside. A break below this level may result in a sharp move lower into 125.85; and any further breaks to the downside may see a bigger move into 125.20.
COMMODITIES
GOLD – 1882 (-77 or -4.09%)
Gold bulls have disappeared, with key levels of support unable to hold and now back trading at prices seen prior to the Russian invasion.
VOLATILITY ALERTS:
Tues 22:30 – US Retail Sales M/m
For a move higher we need to see this market close above 1830. Should this occur we could see a move back into 1850; and any break of this level could see a stronger move into 1875. If momentum is strong then 1915 cannot be ruled out.
If Gold cannot close above 1830, we will look for a move back down to 1800. 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 1750.
CRYPTOS
BITCOIN – 29515 (-4906 or -14.25%)
BTC’s correlation to US equities is now at its highest ever and showed its high beta characteristics with a sizable move lower last week – exacerbated by the general mood in the crypto space following the collapse of other coins.
For a move higher we must now see this market close above 30000. Should this occur we could see a move into 33000 before retesting 35000. If upside momentum is really strong then we can’t rule out 37265.
Failure to close above 30000 could see a move down to 29300. If selling pressure takes control then we could see a move down to 28500. A close below this level and 25875 can’t be ruled out, maybe even a 23675 print.
