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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6654 (-27 or -0.4%)
The ASX remains in a tight range as it faded the previous weekly gains.
VOLATILITY ALERTS:
Thurs 11:30 – Employment Change and Unemployment Rate
For a move higher we would like to see the ASX hold above 6650. Should this occur, a move into 6745 could be expected; and if momentum is strong we cannot rule out moves to 6875 and 6980.
Failure to hold above 6650 means a potential move into 6550. 6500 is the next support level down if 6400 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6250.
EUROPE
DAX – 12862 (-110 or -0.85%)
Sellers remain in control of the DAX with rallies continuing to be sold back into.
For the DAX to move higher we would like to see it close above 12965. Should this occur then 13250 is the next level ahead. If upside momentum is strong then 13600 and 14140 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 – 3863 (-39 or -1%)
Markets are desperate for good news so it was no surprise to see a strong rally after lower-than-expected UoM inflation forecasts.
VOLATILITY ALERTS:
Weds 22:30 – CPI M/m and Core CPI M/m
Fri 22:30 – Retail Sales M/m and Core Retail Sales M/m
Sat 00:00 – Prelim UoM Consumer Sentiment
For a move higher we would like to see the S&P close above 3870. Should this occur, we will look for a move to 3965; and if momentum is strong we cannot rule out moves to 4035 and 4085.
If we cannot close above 3870, we could see this market move down into 3830. A break of this level however may result in a quick move down to 3725, and if momentum to the downside remains strong we may see a fast move back down to 3665.
FOREX
AUD/USD – 0.6792 (-59 or -0.86%)
The downtrend for the Aussie Dollar remains strong and continues to get sold at the top of its tight down channel.
VOLATILITY ALERTS:
Thurs 11:30 – Employment Change and Unemployment Rate
For a move higher this week, we would like to see it close above 0.6830. We will then be targeting a move through 0.6900. If we see a strong break and close above this level then we can’t rule out a move to 0.6945. Should momentum to the upside be really strong then 0.6995 could be targeted.
If this market cannot close above 0.6830, we could see a move down into 0.6755. A strong break of this level may result in a move into 0.6675, however, any weakness below this level could see a sharp drop into 0.6580.
EUR/USD – 1.0086 (-98 or -0.96%)
The Euro just about held onto the much talked about 1.0000 ‘parity’ handle but will downside pressure be too strong from here?
VOLATILITY ALERTS:
Weds 22:30 – US CPI M/m and Core CPI M/m
Fri 22:30 – US Retail Sales M/m and Core Retail Sales M/m
Sat 00:00 – Prelim UoM Consumer Sentiment
For a move higher we would like to see the Euro close above 1.0215. Should this occur we could see a move into 1.0355. A break of this level could see this market rally further to 1.0445 and 1.05.
If the EURO cannot hold above 1.0215, we will see a move into 1.0075. A strong break of this level may result in a move into 1.0000, however, any weakness below this level could see a sharp drop into parity at 0.9875.
GBP/USD – 1.1867 (-164 or -1.36%)
Like the previous two mentioned, the Cable’s downtrend continues with new lows printed again.
VOLATILITY ALERTS:
Tues 00:15 – BoE Gov Bailey speaks
Weds 03:00 – BoE Gov Bailey speaks
Weds 16:00 – GDP M/m
For a move to the upside, we would like to see Cable close above 1.1954 before a break higher into 1.2075. If this market can see a strong close above this level we may then see a strong push back into 1.2160. If upside momentum is really strong then a move back into 1.2245 can’t be ruled out.
Should we fail to close above 1.1955, we will look for a move down to 1.1825. A break below this level however could see Cable further depreciate to 1.1760 by the week’s end and if momentum is very weak we cannot rule out a move to 1.1640.
USD/JPY – 138.52 (+244 or +1.79%)
The Dollar Yen broke out of its recent range and now looks set to push to 140.
VOLATILITY ALERTS:
This week – Upper House elections
Weds 22:30 – CPI M/m and Core CPI M/m
Fri 22:30 – Retail Sales M/m and Core Retail Sales M/m
Sat 00:00 – Prelim UoM Consumer Sentiment
For a move to the upside, we must now see this market hold above 137.2. Should this occur we will look for a move into 139.3, and if upside momentum is strong we could see a move higher into 140 and potentially 142.
If we cannot hold above 137.2, we could see a move back to test 135.3 before a pause to the downside. A break below this level may result in a sharp move lower into 134.55, and any further breaks to the downside may see a bigger move into 133.72.
COMMODITIES
GOLD – 1707 (-35 or -2.01%)
Gold is struggling to find any bids and major support levels continue to be broken…
VOLATILITY ALERTS:
Weds 22:30 – CPI M/m and Core CPI M/m
Fri 22:30 – Retail Sales M/m and Core Retail Sales M/m
For a move higher we need to see this market close above 1720. Should this occur we could see a move into 1750, 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 1720, we will look for a move down to 1700. A break below this level could see a move lower into 1677, and if momentum is very strong to the downside we could see a move to 1645.
CRYPTOS
BITCOIN – 20906 (+156 or +0.75%)
BTC staged a rally towards the end of the week along with risk assets globally – now can it get a breakthrough key resistance?
For a move higher we must now see this market hold 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 hold above 20000 could see a move into 17560. If selling pressure takes control then we could see a move down to 14000. A close below this level and 12320 can’t be ruled out, maybe even a 10700 print.
