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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7494 (+125 or +1.7%)
The ASX continues to rip higher as the ‘China reopening’ trade continues to attract buyers.
VOLATILITY ALERTS:
Weds 11:30 – CPI q/q and y/y
For a move higher we would like to see the ASX hold above 7440. Should this occur, a move above 7500 should be expected, and if momentum is strong we cannot rule out moves to 7555 and 7620.
Failure to hold above 7440 means a potential move into 7350. 7240 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 7240.
EUROPE
DAX – 15098 (-53 or -0.35%)
The DAX finished in the red for the first time this year and must now hold above key support.
For the DAX to move higher we would like to see it hold above 15050. Should this occur then 15325 is the next level ahead. If upside momentum is strong then 15515 and 15730 cannot be ruled out.
To the downside, should we not see it hold above 15050, we will look for a move into support at 14915. A strong break and close below this handle and 14710 is the next level down. If downside pressure mounts then 14625 cannot be ruled out.
US
S&P 500 – 3970 (-29 or -0.73%)
Another rejection off the downtrend line for the SPX and another failure for the bulls… big week of earnings ahead.
VOLATILITY ALERTS:
Weds 01:45 – Flash Services PMI
Fri 00:30 – Advance GDP q/q
Fri 02:00 – New Home Sales
Sat 00:30 – Core PCE Price Index m/m
For a move higher we would like to see the S&P hold above 3965. Should this occur, we will look for a move to 4095, and if momentum is strong we cannot rule out moves to 4145 and 4215.
If we cannot hold above 3965, we could see this market move down into 3915. A break of this level however may result in a quick move down to 3840, and if momentum to the downside remains strong we may see a fast move back down to 3740.
FOREX
AUD/USD – 0.6967 (-8 or -0.11%)
A quiet week for the Aussie Dollar so our levels are unchanged.
VOLATILITY ALERTS:
Weds 11:30 – CPI q/q and y/y
For a move higher this week we would like to see it hold above 0.6965. We will then be targeting a move through 0.7000. If we see a strong break and close above this level then we can’t rule out a move to 0.7050. Should momentum to the upside be really strong then 0.7100 could be targeted.
If this market cannot hold above 0.6965, we could see a move down into 0.6915. 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 – 1.0856 (+23 or +0.21%)
A quiet week for the Euro which should range trading tendencies. Levels remain the same.
For a move higher we would like to see the Euro hold 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 hold 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 – 1.2399 (+166 or +1.36%)
The Cable outperformed its peers against the USD after a hotter-than-expected inflation reading midweek.
VOLATILITY ALERTS:
Tues 20:30 – Flash Manufacturing and Services PMI
For a move to the upside, we would like to see Cable hold above 1.2275 before a break higher into 1.2400. If this market can see a strong close above this level we may then see a strong push back into 1.2600 If upside momentum is really strong then a move back into 1.2755 can’t be ruled out.
Should we fail to hold above 1.2275, we will look for a move down to 1.2145. A break below this level however could see Cable further depreciate to 1.1930 by the week’s end and if momentum is very weak we cannot rule out a move to 1.1740.
USD/JPY – 129.57 (+212 or +1.66%)
A volatile week for the Dollar Yen but the downtrend remains firm with sellers in control.
VOLATILITY ALERTS:
Weds 01:45 – Flash Services PMI
Fri 00:30 – Advance GDP q/q
Fri 02:00 – New Home Sales
Sat 00:30 – Core PCE Price Index m/m
For a move to the upside, we must now see this market hold above 129.50. Should this occur we will look for a move into 131.40, and if upside momentum is strong we could see a move higher into 132.50 and potentially 134.50.
If we cannot hold above 129.50, we could see a move back to test 126.90 before a pause to the downside. A break below this level may result in a sharp move lower into 125, and any further breaks to the downside may see a bigger move into 123.60.
COMMODITIES
GOLD – 1926 (+6 or +0.31%)
Gold continues to make new highs for the year and edged higher again, though not by enough to change our levels for the week ahead.
VOLATILITY ALERTS:
Sat 00:30 – Core PCE Price Index m/m
For a move higher we need to see this market hold above 1910. Should this occur we could see a move into 1930; and any break of this level could see a stronger move into 1960. If momentum is strong then 1990 cannot be ruled out.
If Gold cannot hold above 1910, we need to see it hold at 1895. A break below this level could see a move lower into 1870; and if momentum is very strong to the downside we could see a move to 1850.
CRYPTOS
BITCOIN – 22854 (+2138 or +10.32%)
BTC shoots higher and its correlation with US equities shows (positive) signs of breaking.
For a move higher we must now see this market hold above 21715. Should this occur we could see a move into 21715 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.
