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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6780 (+126 or +1.89%)
The ASX staged a solid rally last week and now needs to see a clean break of the late June high.
VOLATILITY ALERTS:
Tues 11:30 – CPI Y/y
For a move higher we would like to see the ASX hold above 6745. Should this occur, a move into 6875 could be expected; and if momentum is strong we cannot rule out moves to 6980 and 7030.
Failure to hold above 6745 means a potential move into 6650. 6550 is the next support level down if 6650 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6400.
EUROPE
DAX – 13166 (+304 or +2.36%)
A strong start to the week was followed by choppy price action for the rest of it – is this another rally that sellers will lean into?
VOLATILITY ALERTS:
Mon 18:00 – German IFO Business Climate
For the DAX to move higher we would like to see it hold 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 hold 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 – 3960 (+97 or +2.51%)
A second weekly green bar for the SPX as markets start to consider the possibility of a Fed pivot.
VOLATILITY ALERTS:
Weds 00:00 – Cb Consumer Confidence
Weds 22:30 – Core Durable Goods orders M/m
Thurs 04:00 – FOMC Statement and Federal Funds Rate
Thurs 04:00 – FOMC Press Conference
Thurs 22:30 – Advanced GDP q/q
Fri 22:30 – Core PCE Price Index m/m
For a move higher we would like to see the S&P hold 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 hold 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 (+130 or +1.91%)
The Aussie Dollar moves higher inline with stronger equities and weaker USD – but like with equities, is it sustainable?
VOLATILITY ALERTS:
Tues 11:30 – CPI Y/y
For a move higher this week, we would like to see it hold above 0.6900. We will then be targeting a move through 0.6945. If we see a strong break and close above this level then we can’t rule out a move to 0.6995. Should momentum to the upside be really strong then 0.7060 could be targeted.
If this market cannot hold above 0.6900, we could see a move down into 0.6830. A strong break of this level may result in a move into 0.6755, however, any weakness below this level could see a sharp drop into 0.6675.
EUR/USD – 1.0215 (+129 or +1.28%)
The Euro moved higher but is there really much to get enthused about in the Eurozone right now?
VOLATILITY ALERTS:
Thurs 04:00 – FOMC Statement and Federal Funds Rate
Thurs 04:00 – FOMC Press Conference
For a move higher we would like to see the Euro manage a strong 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 – 1.2004 (+137 or +1.15%)
Like the previous two markets, the Cable mainly moved higher on the back of some USD weakness, with Friday’s daily Doji bar showing some indecisiveness.
For a move to the upside, we would like to see Cable hold 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 hold 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 – 136.07 (-245 or -1.77%)
The Dollar Yen endured its worst week since early 2020 as it completely faded the previous week’s gains.
VOLATILITY ALERTS:
Weds 00:00 – Cb Consumer Confidence
Weds 22:30 – Core Durable Goods orders M/m
Thurs 04:00 – FOMC Statement and Federal Funds Rate
Thurs 04:00 – FOMC Press Conference
Thurs 22:30 – US Advanced GDP q/q
Fri 22:30 – US Core PCE Price Index m/m
For a move to the upside, we must now see this market close 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 close 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 – 1727 (+20 or +1.17%)
Gold found an important bounce off multi-year lows to stage an impressive end-of-week rally.
VOLATILITY ALERTS:
Thurs 04:00 – FOMC Statement and Federal Funds Rate
Thurs 04:00 – FOMC Press Conference
Thurs 22:30 – US Advanced GDP q/q
Fri 22:30 – US Core PCE Price Index m/m
For a move higher we need to see this market hold 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 hold 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 – 22581 (+1675 or +8.01%)
BTC has broken out of the recent range and now needs to hold above the highs to sustain another leg up.
For a move higher we must now see this market hold above 21715. Should this occur we could see a move into 23675 before retesting 25875. If upside momentum is really strong then we can’t rule out 28530.
Failure to hold above 21715 could see a move into 20000. If selling pressure takes control then we could see a move down to 17560. A close below this level and 14000 can’t be ruled out, maybe even a 12320 print.
