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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6766 (+103 or +1.55%)
The ASX moved higher but still faces stiff headwinds around this area.
VOLATILITY ALERTS:
Weds 11:30 -Trimmed Mean CPI and CPI q/q
For a move higher we would like to see the ASX hold above 6745. Should this occur, a move into 6875 could be expected; and if momentum is strong we cannot rule out moves to 7020 and 7140.
Failure to hold above 6745 means a potential move into 6650. 6535 is the next support level down if 6650 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6480.
EUROPE
DAX – 12363 (+485 or +3.92%)
Strong week for the DAX but downtrend line resistance overhead awaits.
For the DAX to move higher we would like to see it close above 12965. Should this occur then 13000 is the next level ahead. If upside momentum is strong then 13250 and 13375 cannot be ruled out.
To the downside, should we not see it close above 12965, we will look for a move into support at 12635. A strong break and close below this handle and 12445 is the next level down. If downside pressure mounts then 12300 cannot be ruled out.
US
S&P 500 – 3761 (+176 or +4.91%)
Strongest week for the SPX since June but can a second weekly gain be managed?
VOLATILITY ALERTS:
Tues 12:45 – Flash Services PMI
Weds 01:00 – CB Consumer Confidence
Fri 23:30 – Core PCE Price Index
For a move higher we would like to see the S&P hold above 3740. Should this occur, we will look for a move to 3840; and if momentum is strong we cannot rule out moves to 3915 and 3965.
If we cannot close above 3740, we could see this market move down into 3665. A break of this level however may result in a quick move down to 3635, and if momentum to the downside remains strong we may see a fast move back down to 3550.
FOREX
AUD/USD – 0.6382 (+181 or +2.92%)
The Aussie Dollar finally put an end to a five-week selling onslaught – the turning point or dead cat bounce?
VOLATILITY ALERTS:
Weds 11:30 -Trimmed Mean CPI and CPI q/q
For a move higher this week, we would like to see it close above 0.6415. We will then be targeting a move through 0.6485. If we see a strong break and close above this level then we can’t rule out a move to 0.6580. Should momentum to the upside be really strong then 0.6670 could be targeted.
If this market cannot close above 0.6415, we could see a move down into 0.6305. A strong break of this level may result in a move into 0.6205, however, any weakness below this level could see a sharp drop into 0.6075.
EUR/USD – 0.9861 (+137 or +1.41%)
A positive week for the Euro but faces stiff resistance at the year-long downtrend line, Is reversal incoming?
VOLATILITY ALERTS:
Mon 18:15 – French Flash Services PMI
Mon 18:30 – German Flash Services and Manufacturing PMI
Thurs 23:15 – ECB Interest Rate Announcement
Thurs 23:45 – ECB Press Conference
For a move higher we would like to see the Euro hold above 0.9810. Should this occur we could see a move into 0.9875. A break of this level could see this market rally further to 0.9950 and 1.0000.
If the EURO cannot hold above 0.9810, we will see a move into 0.9700. A strong break of this level may result in a move into 0.9610, however, any weakness below this level could see a move into 0.9460.
GBP/USD – 1.1294 (+133 or +1.19%)
Political turbulence continues in the UK with calls for ‘BoJo’ to return as PM getting louder.
VOLATILITY ALERTS:
Mon 19:30 – Flash Manufacturing and Services PMI
For a move to the upside, we would like to see Cable hold above 1.1250 before a break higher into 1.1330. If this market can see a strong close above this level we may then see a strong pushback into 1.1410. If upside momentum is really strong then a move back into 1.1490 can’t be ruled out.
Should we fail to hold above 1.1250, we will look for a move down to 1.1095. A break below this level however could see Cable further depreciate to 1.1000 by the week’s end and if momentum is very weak we cannot rule out a move to 1.0850.
USD/JPY – 147.63 (-113 or -0.76%)
A likely BoJ/MoF intervention on Friday saw the Dollar Yen drop by over 600 points – are you brave enough to keep taking them on?
VOLATILITY ALERTS:
Tues 12:45 – Flash Services PMI
Weds 01:00 – CB Consumer Confidence
Fri 23:30 – Core PCE Price Index
For a move to the upside, we must now see this market hold above 145. Should this occur we will look for a move into 147.75, and if upside momentum is strong we could see a move higher into 150 and potentially 151.80.
If we cannot hold above 145, we could see a move back to test 143.25 before a pause to the downside. A break below this level may result in a sharp move lower into 142, and any further breaks to the downside may see a bigger move into 140.
COMMODITIES
GOLD – 1657 (+13 or +0.79%)
Gold edged higher and looks to have printed a double bottom.
VOLATILITY ALERTS:
Fri 23:30 – Core PCE Price Index
For a move higher we need to see this market hold above 1652. Should this occur we could see a move into 1680, and any break of this level could see a stronger move into 1697. If momentum is strong then 1710 cannot be ruled out.
If Gold cannot close above 1652, we will look for a move down to 1645. A break below this level could see a move lower into 1612, and if momentum is very strong to the downside we could see a move to 1590.
BITCOIN – 19180 (-153 or -0.79%)
Not much change for BTC as it continues to track sideways.
For a move higher we must now see this market close strongly above 20000. Should this occur we could see a move into 21715 before retesting 23675. If upside momentum is really strong then we can’t rule out 25875.
Failure to close above 20000 could see a move into 18700. If selling pressure takes control then we could see a move down to 17560. A close below this level and 14000 can’t be ruled out, maybe even a 12325 print.
