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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7086 ( +89 or +1.27%)
The ASX managed to fill the March 2020 gap, can this market test all-time highs from here? We will be discussing this in our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Tues 11.30 RBA Meeting Minutes
Weds 11:30 Retail Sales M/m
Thurs 11:30 NAB Quarterly Business Confidence
For a continued move higher we would like to see the ASX close above 7091. Should this occur, a move to the all time highs at 7202 should be expected; and if momentum is very strong we cannot rule out moves to 7272.
Failure to close above 7091 means a potential move back into 6969. 6850 is the next support level down if 6969 doesn’t hold. If downside momentum is really strong then we could see a sharp move to 6804.
EUROPE
DAX – 15507 ( +279 or +1.83% )
A huge move on Friday saw the DAX break out of it’s range for the first time this month – are we set for another rally into new highs?
VOLATILITY ALERTS:
Tues 16:00 – PPI M/m and Y/y
Weds 19:30 – 10 year Bond auction
Thurs 21:45 – ECB Interest Rate and Monetary Policy Statement
Thurs 22:30 – ECB Monetary Policy Press Conference
For the DAX to continue its move higher we first want to see it hold 15345. Should this occur then 15583 is the next technical level ahead. If upside momentum really takes hold then 15782 cannot be ruled out.
To the downside, should 15345 not hold, we will look for a move into support at 15050. A strong break and close below this handle and 14990 is the next leg down. If downside pressure mounts then 14790 cannot be ruled out.
US
S&P 500 – 4185 (+60 or +1.45% )
The S&P enjoyed another strong week as earnings get into full swing, we will be discussing this in our LIVE CHAT ROOM.
VOLATILITY ALERTS:
Weds 22:30 – Initial Jobless Claims
Thurs 00:00 – Existing Home Sales
Fri 00:00 – New Home Sales
For a move higher we would like to see the S&P close above 4200. Should this occur, we will look for a move to 4251, and if momentum is very strong we cannot rule out moves back up to 4435.
If we cannot close above 4200, we could see this market move back down into 4155. A break of this level however may result in a quick move down to 4117, and if momentum to the downside remains strong we may see a fast move back down to 4050.
FOREX
AUD/USD – 0.7735 ( +118 or +1.55% )
The Aussie dollar finally got a breakout of it’s sideways range – will we see this market rally back into the yearly highs now?
VOLATILITY ALERTS:
Tues 11.30 RBA Meeting Minutes
Weds 11:30 Retail Sales M/m
Thurs 11:30 NAB Quarterly Business Confidence
For a move higher this week, we would like to see it hold at 0.7729. We will then be targeting a move back into 0.7823. If we see a strong break and close above this level then we can’t rule out a move to 0.7997.
If this market cannot hold 0.7729, we could see a move back down into 0.7660 before a pause. A strong break of this level may result in a move into 0.7562, however, any weakness below this level could see a sharp drop into 0.7500.
EUR/USD – 1.1981 ( +80 or +0.67% )
The Euro managed to break out of its down-channel structure with a second weekly gain in a row – a big test awaits at a key level now.
VOLATILITY ALERTS:
Thurs 21:45 – ECB Interest Rate and Monetary Policy Statement
Thurs 22:30 – ECB Monetary Policy Press Conference
For a move higher we would like to see the EURO close above 1.2000. Should this occur we could see a retest of 1.2053. A break of this level could see this market rally further to 1.2112; and if momentum is very strong, 1.2170 cannot be ruled out.
If the EURO cannot close above 1.2000, we could see a fast move down into 1.1925 before a pause. A strong break of this level may result in a move into 1.1834, however, any weakness below this level could see a sharp drop into 1.1738.
GBP/USD – 1.3840 ( +137 or +1%)
Cable had a week full of green to end the week close to a full fade of the previous weeks sell-off.
VOLATILITY ALERTS:
Tue 16:00 – Unemployment Rate/Job Claimant Change
Weds 16:00 – Core CPI M/m / Core PPI M/m
Fri 16:00 – Retail Sales M/m
For a move to the upside, we would like to see Cable close above 1.3865, before a break higher through 1.4000. If this market can hold above this level we may then see a strong push into 1.4250.
Should we fail to close above 1.3865, we will look for a move down to 1.3755. A break below this level however could see Cable further depreciate to 1.3666 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3620.
USD/JPY – 108.80 ( -86 or -0.78% )
We saw a weaker USD across the board last week as bond yields also fell. We will be discussing what this means in our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Mon 09:50 – Japan Trade Balance
Weds 22:30 – U.S. Initial Jobless Claims
Thurs 00:00 – U.S. Existing Home Sales
Thurs 09:30 – Japan Core CPI Y/y
Fri 00:00 – U.S. New Home Sales
For a move to the upside, we must now see this market hold above 108.60. Should this occur we will look for a retest of 109.21, and if momentum is very strong we could see a move higher into 109.68 and potentially 109.94.
If we cannot hold above 108.60, we could see a move lower into 107.81 before a pause to the downside. A break below this level may result in a sharp move lower into 107.00, and any further breaks to the downside may see a bigger move into 106.10.
COMMODITIES
GOLD – 1776 ( +32 or +1.83% )
Gold ripped through resistance to enjoy its strongest week of the year, has a bottom been posted? We will discuss this market in detail in the LIVE CHAT ROOM.
For a continued move higher we must now see this market close above 1765. Should this occur we could see a move into 1786; and any break of this level could see a stronger move into 1800. If momentum is really strong then 1814 cannot be ruled out.
If Gold cannot hold above 1765, we will look for a move back down to 1750. A break below this level could see a move lower into 1700, and if momentum is very strong to the downside we could see a move to 1687.
BITCOIN – 54831 ( -4802 or -8.05% )
Bitcoin had another volatile week after posting new highs before crashing back through key support over the weekend – is this the start of a bigger correction?
For a move higher we must now see this market hold above 55420. Should this occur we could see a move into 57290 before retesting 60000. If upside momentum is really strong then we can’t rule out 62500.
Failure to hold at 55240 could see a move down to 53000. If selling pressure takes control then we could see another big test of support at 50000. A close below this level and 44000 can’t be ruled out.
