Market Brief

Hawkish Powell, mixed data and banking issues see vol spike. Gold spikes higher due to the above turbulence…Has it got more room to run?

Read below what our desk thinks, and the important levels to watch this week.

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7307 (+93 or +1.29%)

A ripping Friday saw the ASX manage its first green week in 4 attempts.

VOLATILITY ALERTS:

Weds 11:30 – CPI y/y and GDP q/q

For a move higher we would like to see the ASX close firmly above 7310. Should this occur, a move above 7440 should be expected, and if momentum is strong we cannot rule out moves to 7495 and 7555.

Failure to close above 7310 means a potential move into 7215. 7135 is the next support level down if 7215 doesn’t hold. If downside momentum is really strong then we could see another leg down into 7030.

EUROPE

DAX – 15628 (+391 or +2.57%)

Like the ASX, a strong Friday saved the week for the DAX and now bulls must secure a clean break of the range highs.

For the DAX to move higher we would like to see it hold above 15515. Should this occur then 15730 is the next level ahead. If upside momentum is strong then 15970 and 16260 cannot be ruled out. 

To the downside, should we not see it hold above 15515, we will look for a move into support at 15235. A strong break and close below this handle and 15050 is the next level down. If downside pressure mounts then 14915 cannot be ruled out.

US

S&P 500 – 4048 (+80 or +2.02%)

The SPX managed to find clear support at one of our key downside levels and just above the longer-term descending trend line. 

VOLATILITY ALERTS:

Weds 02:00 – CB Consumer Confidence

Thurs 02:00 – ISM Manufacturing PMI

Sat 02:00 – ISM Services PMI

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 3915, and if momentum is strong we cannot rule out moves to 3810 and 3715.

If we cannot hold above 3965, we could see this market move down into 4040. A break of this level however may result in a quick move down to 4095, and if momentum to the downside remains strong we may see a fast move back down to 4115.

FOREX

AUD/USD – 0.6766 (+41 or +0.61%)

A quiet week overall for the Aussie Dollar, with the potential for movement coming around this week’s RBA meeting.

VOLATILITY ALERTS:

Weds 11:30 – CPI y/y and GDP q/q

For a move higher this week we would like to see it hold above 0.6715. We will then be targeting a move through 0.6825. If we see a strong break and close above this level then we can’t rule out a move to 0.6870. Should momentum to the upside be really strong then 0.6915 could be targeted.

If this market cannot hold above 0.6715, we could see a move down into 0.6670. A strong break of this level may result in a move into 0.6585, however, any weakness below this level could see a sharp drop into 0.6525.

EUR/USD – 1.0634 (+89 or +0.84%)

The Euro managed to regain some of the previous week’s losses with several higher lows in a row. 

For a move higher we would like to see the Euro hold above 1.0600. Should this occur we could see a move into 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 – 1.2043 (+104 or +0.87%)

A battle between bulls and bears continues on the Cable and until we see a clean break of the range, we await the next near-term direction.

VOLATILITY ALERTS:

Weds 21:00 – BoE Gov Bailey speaks

For a move to the upside, we would like to see Cable close 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 close 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 – 136.47 (-63 or -0.46%)

A mixed week for the Dollar Yen and our levels remain unchanged. 

VOLATILITY ALERTS:

Tues 15:10 – BoJ Gov-Designate Ueda speaks

Weds 02:00 – CB Consumer Confidence

Thurs 02:00 – ISM Manufacturing PMI

Sat 02:00 – ISM Services PMI

For a move to the upside we must now see this market hold above 134.50. Should this occur we will look for a move into 137.55, and if upside momentum  is strong we could see a move higher into 139.45 and potentially 142.25.

If we cannot hold above 134.50, we could see a move back to test 132.50 before a pause to the downside. A break below this level may result in a sharp move lower into 131.40; and any further breaks to the downside may see a bigger move into 129.50.

COMMODITIES

GOLD – 1855  (+45 or +2.49%)

Gold ripped higher with a change in the trend looking promising for bulls. 

For a move higher we need to see this market hold above 1850. Should this occur we could see a move into 1870; and any break of this level could see a stronger move into 1895. 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 1785.

CRYPTOS

BITCOIN – 22442 (-789 or -3.4%)

The ongoing Silvergate saga has left crypto markets on edge, though there have been some signs of stabilising since the end-of-week sell-off.

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 28000. If upside momentum is really strong then we can’t rule out 31000.

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 18700 can’t be ruled out, maybe even a 17500 print.

DISCLAIMER

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