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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6468 (-5 or -0.08%)
Indecisive week for the ASX which closes almost flat – as such our levels remain the same.
VOLATILITY ALERTS:
Tues 14:30 – RBA Interest Rate Announcement
Weds 11:30 – Retail Sales M/m
For a move higher we would like to see the ASX close above 6480. Should this occur, a move into 6535 could be expected; and if momentum is strong we cannot rule out moves to 6650 and 6745.
Failure to close above 6480 means a potential move into 6405. 6300 is the next support level down if 6405 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6200.
EUROPE
DAX – 11974 (-326 or -2.65%)
Sellers remain in full control of the DAX as concerns linger over an upcoming recession.
For the DAX to move higher we would like to see it hold above 11950. Should this occur then 12095 is the next level ahead. If upside momentum is strong then 12300 and 12445 cannot be ruled out.
To the downside, should we not see it hold above 11950, we will look for a move into support at 11665. A strong break and close below this handle and 11322 is the next level down. If downside pressure mounts then 11000 cannot be ruled out.
US
S&P 500 – 3591 (-106 or -2.87%)
A lower close for the week leaves the SPX set to continue its trend lower.
VOLATILITY ALERTS:
Tues 01:00 – ISM Manufacturing PMI
Weds 01:00 – JOLTS Jobs Openings
Thurs 01:00 – ISM Services PMI
Fri 23:30 – Non-Farm Payrolls
For a move higher we would like to see the S&P close above 3635. Should this occur, we will look for a move to 3665; and if momentum is strong we cannot rule out moves to 3840 and 3915.
If we cannot close above 3635, we could see this market move down into 3550. A break of this level however may result in a quick move down to 3430, and if momentum to the downside remains strong we may see a fast move back down to 3400.
FOREX
AUD/USD – 0.6400 (-130 or -1.99%)
The Aussie Dollar continues to track equity indices lower.
VOLATILITY ALERTS:
Tues 14:30 – RBA Interest Rate Announcement
Weds 11:30 – Retail Sales M/m
For a move higher this week, we would like to see it close above 0.6415. We will then be targeting a move through 0.6485. If we see a strong break and close above this level then we can’t rule out a move to 0.6580. Should momentum to the upside be really strong then 0.6670 could be targeted.
If this market cannot close above 0.6415, we could see a move down into 0.6305. A strong break of this level may result in a move into 0.6205, however, any weakness below this level could see a sharp drop into 0.6075.
EUR/USD – 0.9801 (+113 or +1.17%)
The Euro rallied in the week but will once again face resistance from sellers at the descending trend line.
VOLATILITY ALERTS:
Thurs 22:30 – ECB Monetary Policy Meeting Minutes
For a move higher we would like to see the Euro close above 0.9810. Should this occur we could see a move into 0.9875. A break of this level could see this market rally further to 0.9950 and 1.0000.
If the EURO cannot close above 0.9810, we will see a move into 0.9700. A strong break of this level may result in a move into 0.9610, however, any weakness below this level could see a move into 0.9460.
GBP/USD – 1.1161(+313 or +2.89%)
A very volatile GBP has now faded almost the entire move down since the ‘tax cut’ announcement from the UK Government.
For a move to the upside, we would like to see Cable close above 1.1097 before a break higher into 1.1250. If this market can see a strong close above this level we may then see a strong pushback into 1.1330. If upside momentum is really strong then a move back into 1.1410 can’t be ruled out.
Should we fail to close above 1.1097, we will look for a move down to 1.1000. A break below this level however could see Cable further depreciate to 1.0850 by the week’s end and if momentum is very weak we cannot rule out a move to 1.0800.
USD/JPY – 144.27 (+82 or +0.57%)
The Dollar Yen has returned to knock on the door of the 145 handles that the MoF seemingly wants to ‘defend’ – are you brave enough to take them on?
VOLATILITY ALERTS:
Tues 01:00 – ISM Manufacturing PMI
Weds 01:00 – JOLTS Jobs Openings
Thurs 01:00 – ISM Services PMI
Fri 23:30 – Non-Farm Payrolls
For a move to the upside, we must now see this market hold above 143.25. Should this occur we will look for a move into 145, and if upside momentum is strong we could see a move higher into 147.75 and potentially 150.
If we cannot hold above 143.25, we could see a move back to test 142 before a pause to the downside. A break below this level may result in a sharp move lower into 140, and any further breaks to the downside may see a bigger move into 139.25.
COMMODITIES
GOLD – 1660 (+16 or +0.97%)
Friday’s reversal pin bar print shows that there are sellers above.
VOLATILITY ALERTS:
Fri 23:30 – Non-Farm Payrolls
For a move higher we need to see this market hold above 1652. Should this occur we could see a move into 1680; and any break of this level could see a stronger move into 1697. If momentum is strong then 1710 cannot be ruled out.
If Gold cannot close above 1652, we will look for a move down to 1645. A break below this level could see a move lower into 1612; and if momentum is very strong to the downside we could see a move to 1590.
CRYPTOS
BITCOIN – 19189 (+277 or +1.46%)
BTC continues to contract which suggests a breakout could be imminent.
For a move higher we must now see this market close strongly 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 close above 20000 could see a move into 18700. 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 12325 print.
