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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7059 (+59 or +0.84%)
The up trend in the ASX continued after a week of consolidation with global equities bullish across the board.
VOLATILITY ALERTS:
Tues 11:30 – Monetary Policy Minutes
Weds 11:30 – Wage Price Index
Thurs 11:30 – Employment Change and Unemployment Rate
For a move higher we would like to see the ASX hold above 7030. Should this occur, a move into 7135 could be expected; and if momentum is strong we cannot rule out moves to 7195 and 7300
Failure to hold above 7030 means a potential move into 6980. 6875 is the next support level down if 6980 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6745.
EUROPE
DAX – 13880 (+271 or +1.99%)
The DAX ripped higher on Friday to end another positive week – though still a way to go to reach the last swing high.
For the DAX to move higher we would like to see a strong close above 13890. Should this occur then 14140 is the next level ahead. If upside momentum is strong then 14330 and 14600 cannot be ruled out.
To the downside, should we not see it close above 13890, we will look for a move into support at 13600. A strong break and close below this handle and 13250 is the next level down. If downside pressure mounts then 12965 cannot be ruled out.
US
S&P 500 – 4278 (+138 or +3.33%)
Are US markets being too optimistic about a less hawkish Fed? Another strong week for the SPX.
VOLATILITY ALERTS:
Weds 22:30 – US Retail Sales & Core Retail Sales M/m
Thurs 04:00 – FOMC Meeting Minutes
For a move higher we would like to see the S&P hold above 4250. Should this occur, we will look for a move to 4300; and if momentum is strong we cannot rule out moves to 4355 and 4400.
If we cannot hold above 4250, we could see this market move down into 4210. A break of this level however may result in a quick move down to 4160, and if momentum to the downside remains strong we may see a fast move back down to 4085.
FOREX
AUD/USD – 0.7122 (+212 or +3.07%)
The Aussie Dollar ripped higher as risk-on sentiment swept across markets.
VOLATILITY ALERTS:
Tues 11:30 – Monetary Policy Minutes
Weds 11:30 – Wage Price Index
Thurs 11:30 – Employment Change and Unemployment Rate
For a move higher this week, we would like to see it hold above 0.7100. We will then be targeting a move through 0.7135. If we see a strong break and close above this level then we can’t rule out a move to 0.7180. Should momentum to the upside be really strong then 0.7245 could be targeted.
If this market cannot close above 0.7100, we could see a move down into 0.7060. A strong break of this level may result in a move into 0.6995, however, any weakness below this level could see a sharp drop into 0.6945.
EUR/USD – 1.0256 (+78 or +0.77%)
The Euro’s midweek momentum was quickly faded and it appears a false breakout of the range is on the cards.
VOLATILITY ALERTS:
Weds 22:30 – US CPI
Weds 22:30 – US Retail Sales & Core Retail Sales M/m
Thurs 04:00 – FOMC Meeting Minutes
For a move higher we would like to see the Euro hold 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 – 1.2136 (+66 or +0.55%)
The Cable sold off on Friday to give back the gains it made midweek and could now be at another turning point.
VOLATILITY ALERTS:
Weds 16:00 – UK CPI Y/y
For a move to the upside, we would like to see Cable hold above 1.2075 before a break higher into 1.2160. If this market can see a strong close above this level we may then see a strong push back into 1.2245. If upside momentum is really strong then a move back into 1.2330 can’t be ruled out.
Should we fail to hold above 1.2075, we will look for a move down to 1.1955. A break below this level however could see Cable further depreciate to 1.1825 by the week’s end and if momentum is very weak we cannot rule out a move to 1.1760.
USD/JPY – 133.40 (-155 or -1.15%)
The USD fell after softer than expected inflation numbers came through midweek – leading to markets pricing a less hawkish Fed.
VOLATILITY ALERTS:
Weds 22:30 – US Retail Sales & Core Retail Sales M/m
Thurs 04:00 – FOMC Meeting Minutes
For a move to the upside, we must now see this market close above 133.72. Should this occur we will look for a move into 134.58, and if upside momentum is strong we could see a move higher into 135.3 and potentially 137.2.
If we cannot close above 133.72, we could see a move back to test 131.32 before a pause to the downside. A break below this level may result in a sharp move lower into 130.25, and any further breaks to the downside may see a bigger move into 129.45.
COMMODITIES
GOLD – 1801 (+26 or +1.46%)
Gold edges higher again after finding strong support at a key level throughout the week.
VOLATILITY ALERTS:
Weds 22:30 – US Retail Sales & Core Retail Sales M/m
Thurs 04:00 – FOMC Meeting Minutes
For a move higher we need to see this market hold above 1800. Should this occur we could see a move into 1815, and any break of this level could see a stronger move into 1830. If momentum is strong then 1850 cannot be ruled out.
If Gold cannot hold above 1800, we will look for a move down to 1785. A break below this level could see a move lower into 1765, and if momentum is very strong to the downside we could see a move to 1750.
CRYPTOS
BITCOIN – 24219 (+1257 or +5.47%)
BTC’s ascending channel continued to hold strong as enough buying momentum in risk assets saw the trend hold.
For a move higher we must now see this market close above 23675. Should this occur we could see a move into 25875 before retesting 28530. If upside momentum is really strong then we can’t rule out 30985.
Failure to close above 23675 could see a move into 21715. If selling pressure takes control then we could see a move down to 20000. A close below this level and 17560 can’t be ruled out, maybe even a 14000 print.
