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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6948 (+56 or +0.81%)
A pause to the recent decline as the ASX edged slightly higher… though levels remain the same.
VOLATILITY ALERTS:
Weds 11:30 – CPI y/y
For a move higher we would like to see the ASX hold above 6915. Should this occur, a move above 7030 should be expected, and if momentum is strong we cannot rule out moves to 7135 and 7215.
Failure to hold above 6915 means a potential move into 6810. 6765 is the next support level down if 6810 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6645.
EUROPE
DAX – 15025 (+258 or +1.75%)
A volatile week for the DAX ends in a positive close albeit with the spotlight now on Deutsche Bank.
VOLATILITY ALERTS:
Mon 19:00 – German IFO Business Climate
Thurs ALL DAY – German Prelim CPI m/m
For the DAX to move higher we would like to see it hold above 14915. Should this occur then 15050 is the next level ahead. If upside momentum is strong then 15325 and 15515 cannot be ruled out.
To the downside, should we not see it hold above 14915, we will look for a move into support at 14710. A strong break and close below this handle and 14445 is the next level down. If downside pressure mounts then 13975 cannot be ruled out.
US
S&P 500 – 3978 (+64 or +1.64%)
The SPX closed the week higher though fears of further banking issues loom.
VOLATILITY ALERTS:
Weds 01:00 – CB Consumer Confidence
Thurs 23:30 – Final GDP q/q and Unemployment Claims
Fri 06:45 – Treasury Secretary Yellen speaks
Fri 23:30 – Core PCE Price Index m/m
For a move higher we would like to see the S&P hold above 3965. Should this occur, we will look for a move to 4095, and if momentum is strong we cannot rule out moves to 4145 and 4200.
If we cannot hold above 3965, we could see this market move down into 3915. A break of this level, however, may result in a quick move down to 3810; and if momentum to the downside remains strong we may see a fast move back down to 3715.
FOREX
AUD/USD – 0.6642 (-57 or -0.85%)
The Aussie Dollar moved lower as traders now view the RBA as the most ‘dovish’ of the G10 central banks.
VOLATILITY ALERTS:
Weds 11:30 – CPI y/y
For a move higher this week we would like to see it close above 0.6670. We will then be targeting a move through 0.6715. If we see a strong break and close above this level then we can’t rule out a move to 0.6825. Should momentum to the upside be really strong then 0.6870 could be targeted.
If this market cannot close above 0.6670, we could see a move down into 0.6585. A strong break of this level may result in a move into 0.6525, however, any weakness below this level could see a sharp drop into 0.6385.
EUR/USD – 1.0760 (+96 or +0.9%)
The Euro rejected off one of our key overhead levels late last week with a near-term top looking likely.
VOLATILITY ALERTS:
Thurs ALL DAY – German Prelim CPI m/m
For a move higher we would like to see the Euro hold above 1.0600. Should this occur we should see a move above 1.0760. A break of this level could see this market rally further to 1.0940 and 1.1115.
If the EURO cannot hold above 1.0600 we will see a move into 1.0470. A strong break of this level may result in a move into 1.0355, however, any weakness below this level could see a move into 1.0280.
GBP/USD – 1.2229 (+52 or +0.43%)
The Cable edged higher again although with inflation still above 10% and the BoE talking about being done with hikes, risks favour the downside?
VOLATILITY ALERTS:
Tues 19:45 – BOE Gov Bailey speaks
For a move to the upside, we would like to see Cable hold above 1.2145 before a break higher into 1.2275. If this market can see a strong close above this level we may then see a strong push back into 1.2400 If upside momentum is really strong then a move back into 1.2600 can’t be ruled out.
Should we fail to hold above 1.2145, we will look for a move down to 1.1930. A break below this level however could see Cable further depreciate to 1.1740 by the week’s end and if momentum is very weak we cannot rule out a move to 1.1610.
USD/JPY – 130.71 (-113 or -0.86%)
Flow into the ‘safe haven’ Yen continues with US bond yields dropping isn’t good for the USD.
VOLATILITY ALERTS:
Thurs 23:30 – Final GDP q/q and Unemployment Claims
Fri 06:45 – Treasury Secretary Yellen speaks
Fri 23:30 – Core PCE Price Index m/m
For a move to the upside, we must now see this market close above 131.40. Should this occur we will look for a move into 132.50, and if upside momentum is strong we could see a move higher into 134.50 and potentially 137.55.
If we cannot close above 131.40, we could see a move back to test 129.50 before a pause to the downside. A break below this level may result in a sharp move lower into 127.20, and any further breaks to the downside may see a bigger move into 125.
COMMODITIES
GOLD – 1978 (-9 or -0.45%)
Not much movement for Gold but the dip buyers did step in which is a positive sign for those looking to a move to new ATH’s.
VOLATILITY ALERTS:
Thurs 23:30 – Final GDP q/q and Unemployment Claims
Fri 06:45 – Treasury Secretary Yellen speaks
Fri 23:30 – Core PCE Price Index m/m
For a move higher we need to see this market hold above 1960. Should this occur we could see a move into 2000; and any break of this level could see a stronger move into 2014. If momentum is strong then 1910 cannot be ruled out.
If Gold cannot hold above 1850, we can see a move down to 1830. A break below this level could see a move lower into 1805; and if momentum is very strong to the downside we could see a move to 2070.
CRYPTOS
BITCOIN – 27923 (+243 or +0.88%)
Quiet week for BTC… which can be taken as a positive for bulls in a week packed full of macro events causing volatility elsewhere.
For a move higher we must now see this market close above 28000. Should this occur we could see a move into 31050 before retesting 32590. If upside momentum is really strong then we can’t rule out 36850.
Failure to close above 28000 could see a move into 25875. If selling pressure takes control then we could see a move down to 23675. A close below this level and 21715 can’t be ruled out. 20000 is the more psychological handle below that.
