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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7411 (+107 or +1.46%)
The ASX followed the lead of the U.S. markets and managed to close at all time highs, despite the lockdowns across many parts of Australia.
VOLATILITY ALERTS:
Weds 11:30 – CPI Q/q
For a continued move higher we would like to see the ASX hold above 7400. Should this occur, a move into 7500 could be expected; and if momentum is strong we cannot rule out moves to 7600 and 7721.
Failure to hold above 7400 means a potential move back into 7272. 7202 is the next support level down if 7091 doesn’t hold. If downside momentum is really strong then we could see a sharp move to 6969.
EUROPE
DAX – 15679 (+155 or +1%)
A familiar-looking V reversal on the DAX as support was found at a key level, but couldn’t quite get an all time high close like the others.
VOLATILITY ALERTS:
Mon 18:30 – IFO Business Climate
Weds 16:00 – GFK Consumer Climate
Thurs 17:55 – Unemployment Rate
Thurs 22:00 – CPI Q/q
Fri – GDP Q/q
For the DAX to continue its move higher we would like to see it hold above 15500. Should this occur then 15800 is the next level ahead. If upside momentum really takes hold then 16000 cannot be ruled out.
To the downside, should we not see it hold above 15500, we will look for a move into support at 15345. A strong break and close below this handle and 15050 is the next level down. If downside pressure mounts then 14990 cannot be ruled out.
US
S&P 500 – 4408 (+80 or +1.85% )
Another week, another dip bought on the S&P as the bulls continue to hold the line – we will be discussing this inside our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Tues 00:00 – New Home Sales
Tues 22:30 – Core Durable Goods Orders M/m
Weds 00:00 – Cb Consumer Confidence Index
Weds 04:00 – Fed Interest Rate Announcement
Weds 04:30 – FOMC Press Conference
Weds 22:30 – GDP Q/q
Thurs 00:00 – Pending Home Sales M/m
Fri 22:30 – Core PCE M/m
For a move higher we would like to see the S&P close above 4421. Should this occur, we will look for a move to 4450, and if momentum is very strong we cannot rule out moves to 4500 and 4531.
If we cannot close above 4421, we could see this market move down into 4375. A break of this level however may result in a quick move down to 4300, and if momentum to the downside remains strong we may see a fast move back down to 4250.
FOREX
AUD/USD – 0.7363 (-34 or -0.46%)
The Aussie Dollar continues to trend lower and eyes will be on any hawkish FOMC comments this week for further direction.
VOLATILITY ALERTS:
Weds 11:30 – CPI Q/q
For a move higher this week, we would like to see it close above 0.7423. We will then be targeting a move back into 0.7500 where we may see a pause. If we see a strong break and close above this level then we can’t rule out a move to 0.7560.
If this market cannot close above 0.7423, we could see a move back down into 0.7343. A strong break of this level may result in a move into 0.7250, however, any weakness below this level could see a sharp drop into 0.7065.
EUR/USD – 1.1722 (-83 or -0.7%)
The Euro continues to grind lower and now will surely test those yearly lows? We will be discussing this in our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Weds 04:00 – Fed Interest Rate Announcement
Weds 04:30 – FOMC Press Conference
Fri 19:00 – EU Core CPI M/m
Fri 19:00 – EU Unemployment Rate
For a move higher we would like to see the EURO close above 1.1833. Should this occur we could see a move into 1.1925 before a pause. A break of this level could see this market rally further to 1.2000; and if momentum is very strong, 1.2052 cannot be ruled out.
If the EURO cannot close above 1.1833, we could see a move into 1.1738. A strong break of this level may result in a move into 1.1615, however, any weakness below this level could see a sharp drop into 1.1500.
GBP/USD – 1.3755 (-10 or -0.07%)
The Cable matched equities with a V reversal of its own to close the week flat.
For a move to the upside, we would like to see Cable hold 1.3755 before a break higher through 1.3865. If this market can see a strong close above this level we may then see a strong push back into 1.4000.
Should we fail to hold above 1.3755, we will look for a move down to 1.3666. A break below this level however could see Cable further depreciate to 1.3620 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3535.
USD/JPY – 110.54 (+44 or +0.4%)
The Dollar moved higher against the Yen as it looks to find a clear direction – will this week’s FOMC provide that?
VOLATILITY ALERTS:
Tues 00:00 – New Home Sales
Tues 22:30 – Core Durable Goods Orders M/m
Weds 00:00 – Cb Consumer Confidence Index
Weds 04:00 – Fed Interest Rate Announcement
Weds 04:30 – FOMC Press Conference
Weds 22:30 – GDP Q/q
Thurs 00:00 – Pending Home Sales M/m
Fri 09:30 – Japan Retail Sales M/m
Fri 22:30 – Core PCE M/m
For a move to the upside, we must now see this market hold above 111.0. Should this occur we will look for a retest of 111.70, and if momentum is very strong we could see a move higher into 112.25 and potentially 113.18.
If we cannot hold above 111.0, we could see a move back to test 110.38 before a pause to the downside. A break below this level may result in a sharp move lower into 109.68, and any further breaks to the downside may see a bigger move into 109.21.
COMMODITIES
GOLD – 1801 (-13 or -0.72%)
Another market that seems unsure what to do after spending another week chopping around.
For a continued move higher we need to see this market hold above 1800. Should this occur we need to see a move through 1814; and any break of this level could see a stronger move into 1850. If momentum is really strong then 1875 cannot be ruled out.
If Gold cannot hold above 1800, we will look for a move back down to 1756. 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 1700.
CRYPTOS
BITCOIN – 34465 (+484 or +1.42%)
Bitcoin bounces back again as bulls hold onto the 30k handle – is this triple bottom the end of the lows?
For a move higher we must now see this market close above 35000. Should this occur we could see a move into 40000 before retesting 42000. If upside momentum is really strong then we can’t rule out 50000.
Failure to close above 35000 could see a move down to the lows around 30000. If selling pressure takes control then we could see a move down to 25700. A close below this level and 19000 can’t be ruled out.
