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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7071 (+12 or +0.17%)
A week was spent within a tight range for the ASX and our levels remain unchanged.
For a move higher we would like to see the ASX hold above 7030. Should this occur, a move into 7135 could be expected; and if momentum is strong we cannot rule out moves to 7195 and 7300
Failure to hold above 7030 means a potential move into 6980. 6875 is the next support level down if 6980 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6745.
EUROPE
DAX – 13533 (-347 or -2.5%)
The upside momentum on the DAX ground to a halt as sellers re-entered the fray.
VOLATILITY ALERTS:
Tues 17:30 – German Flash Manufacturing PMI & German Flash Services PMI
Thurs 18:00 – German IFO Business Climate
For the DAX to move higher we would like to see a strong close above 13600. Should this occur then 13890 is the next level ahead. If upside momentum is strong then 14140 and 14330 cannot be ruled out.
To the downside, should we not see it close above 13600, we will look for a move into support at 13250. A strong break and close below this handle and 12965 is the next level down. If downside pressure mounts then 12635 cannot be ruled out.
US
S&P 500 – 4225 (-53 or -1.24%)
The SPX edged lower and now must hold onto key support if this trend is to be maintained.
VOLATILITY ALERTS:
Tues 23:45 – US Flash Services PMI
Weds 00:00 – New Home Sales
Weds 22:30 – Core Durable Goods Orders M/m
Thurs 22:30 – US GDP
Fri 22:30 – Core PCE Price Index
Fri ALL DAY – Jackson Hole Summit
For a move higher we would like to see the S&P hold above 4210. Should this occur, we will look for a move to 4250; and if momentum is strong we cannot rule out moves to 4300 and 4355.
If we cannot hold above 4210, we could see this market move down into 4160. A break of this level however may result in a quick move down to 4085; and if momentum to the downside remains strong we may see a fast move back down to 4035.
FOREX
AUD/USD – 0.6871 (-251 or -3.52%)
The Aussie Dollar sold off aggressively as USD bulls re-entered the room.
For a move higher this week, we would like to see it hold above 0.6850. We will then be targeting a move through 0.6945. If we see a strong break and close above this level then we can’t rule out a move to 0.6995. Should momentum to the upside be really strong then 0.7060 could be targeted.
If this market cannot hold above 0.6850, we could see a move down into 0.6765. A strong break of this level may result in a move into 0.6715, however, any weakness below this level could see a sharp drop into 0.6670.
EUR/USD – 1.0041 (-215 or -2.1%)
The Euro’s downside level of the range has now broken and bears will be targeting new yearly lows at sub-parity.
VOLATILITY ALERTS:
Tues 17:30 – German Flash Manufacturing PMI & German Flash Services PMI
Fri 22:30 – Core PCE Price Index
Fri ALL DAY – Jackson Hole Summit
For a move higher we would like to see the Euro close above 1.0072. Should this occur we could see a move into 1.0215. A break of this level could see this market rally further to 1.0355 and 1.0445.
If the EURO cannot close above 1.0072, we will see a move into 1.0000. A strong break of this level may result in a move into 0.9950, however, any weakness below this level could see a move into 0.9875.
GBP/USD – 1.1829 (-307 or -2.53%)
The Cable also saw aggressive moves lower and is now within touching distance of breaking its own yearly lows.
VOLATILITY ALERTS:
Tues 18:30 – UK Flash Manufacturing PMI & Flash Services PMI
For a move to the upside, we would like to see Cable hold above 1.1825 before a break higher into 1.1955. If this market can see a strong close above this level we may then see a strong push back into 1.2075. If upside momentum is really strong then a move back into 1.2160 can’t be ruled out.
Should we fail to hold above 1.1825, we will look for a move down to 1.1760. A break below this level however could see Cable further depreciate to 1.1640 by the week’s end and if momentum is very weak we cannot rule out a move to 1.1490.
USD/JPY – 136.85 (+346 or +2.59%)
The USD bounced back as the Dollar Yen surged higher as bulls look to fade the recent pull back.
VOLATILITY ALERTS:
Tues 23:45 – US Flash Services PMI
Weds 00:00 – New Home Sales
Weds 22:30 – Core Durable Goods Orders M/m
Thurs 22:30 – US GDP
Fri 22:30 – Core PCE Price Index
Fri ALL DAY – Jackson Hole Summit
For a move to the upside, we must now see this market close above 137.20. Should this occur we will look for a move into 139.30, and if upside momentum is strong we could see a move higher into 140 and potentially 142.
If we cannot close above 137.20, we could see a move back to test 135.30 before a pause to the downside. A break below this level may result in a sharp move lower into 134.60, and any further breaks to the downside may see a bigger move into 133.70.
COMMODITIES
GOLD – 1747 (-54 or -3%)
Gold was another victim of a stronger greenback as it gave back all of it’s monthly gains – and some!
VOLATILITY ALERTS:
Fri 22:30 – Core PCE Price Index
Fri ALL DAY – Jackson Hole Summit
For a move higher we need to see this market close above 1750. Should this occur we could see a move into 1765; and any break of this level could see a stronger move into 1785. If momentum is strong then 1800 cannot be ruled out.
If Gold cannot close above 1750, we will look for a move down to 1740. A break below this level could see a move lower into 1720; and if momentum is very strong to the downside we could see a move to 1710.
CRYPTOS
BITCOIN – 21253 (-2966 or -12.25%)
A risk-off tone across markets never suits cryptos and BTC took a large hit on Friday, following what had been a quiet week.
For a move higher we must now see this market close 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 28530.
Failure to close 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 17560 can’t be ruled out, maybe even a 14000 print.
