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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7251 (-90 or -1.23%)
The ASX spent the week struggling at a key level before following the lead from elsewhere with Friday’s sell off. We will be discussing what is next in our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Mon 11:30 – Retail Sales M/m
Weds 09:00 – Commonwealth Bank Services and Manufacturing PMI
For a continued move higher we would like to see the ASX close above 7272. Should this occur, a move back into 7400 could be expected; and if momentum is strong we cannot rule out moves to 7500.
Failure to close above 7272 means a potential move back into 7202. 7091 is the next support level down if 6969 doesn’t hold. If downside momentum is really strong then we could see a sharp move to 6850.
EUROPE
DAX – 15410 (-320 or -2.03%)
The DAX didn’t escape Friday’s equity hammering as it saw three weeks of gains wiped out.
VOLATILITY ALERTS:
Weds 17:30 – German Market Manufacturing and Services PMI
Thurs 07:00 – EU Leaders Summit
Thurs 18:30 – IFO Business Climate
For the DAX to continue its move higher we would like to see it close above 15585. Should this occur then 15782 is the next technical level ahead. If upside momentum really takes hold then 16000 cannot be ruled out.
To the downside, should we not see a close above 15585, we will look for a move into support at 15345. A strong break and close below this handle and 15050 is the next level down. If downside pressure mounts then 14990 cannot be ruled out.
US
S&P 500 – 4151 (-93 or -2.19%)
The SPX looks in trouble as a breakout of the trend line looks in play – can the bulls hold the line again or is this the start of something bigger? We will be discussing what is next in our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Weds 00:00 – Existing Home Sales
Thurs 00:00 – New Home Sales
Thurs 22:30 – Core Durable Goods M/m
Thurs 22:30 – GDP Q/q
Fri 22:30 – Core PCE M/m and Y/y
For a move higher we would like to see the S&P close above 4155. Should this occur, we will look for a move to 4175; and if momentum is very strong we cannot rule out moves to 4200 and 4250.
If we cannot close above 4155, we could see this market move down into 4117. A break of this level however may result in a quick move down to 4050; and if momentum to the downside remains strong we may see a fast move back down to 4000.
FOREX
AUD/USD – 0.7478 (-224 or -2.91%)
VOLATILITY ALERTS:
Mon 11:30 – Retail Sales M/m
Weds 09:00 – Commonwealth Bank Services and Manufacturing PMI
For the first time in months we have changed levels for the Aussie Dollar. Key support of the range has been broken and a big breakout is in play.
For a move higher this week we would like to see it close above 0.7500. We will then be targeting a move back into 0.7560 where we may see a pause. If we see a strong break and close above this level then we can’t rule out a move to 0.7729.
If this market cannot close above 0.7500, we could see a move back down into 0.7423. A strong break of this level may result in a move into 0.7343, however any weakness below this level could see a sharp drop into 0.7250.
EUR/USD – 1.2107 (-246 or -2.03%)
From touching distance to the yearly highs to within touching distance of yearly lows as months of gains were erased post FOMC – we will be discussing this in our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Weds 18:00 – EU Market Manufacturing and Services PMI
Thurs 07:00 – EU Leaders Summit
Fri 22:30 – U.S. Core PCE M/m and Y/y
For a move higher we would like to see the EURO close above 1.1925. Should this occur we could see a move into 1.2000 before a pause. A break of this level could see this market rally further to 1.2052; and if momentum is very strong, 1.2100 cannot be ruled out.
If the EURO cannot close above 1.1925, we could see a move into 1.1833 before a pause. A strong break of this level may result in a move into 1.1738, however any weakness below this level could see a sharp drop into 1.1615.
GBP/USD – 1.3793 (-312 or -2.21%)
The GBP looks in trouble with a break of the up channel in play with a big double top now formed. We will be discussing this in our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Weds 21:00 – BoE Interest Rate Decision
For a move to the upside, we would like to see Cable hold above 1.3755 before a break higher through 1.3865. If this market can see a strong close above this level we may then see a strong push back into 1.4000.
Should we fail to hold above 1.3755, we will look for a move down to 1.3666. A break below this level however could see Cable further depreciate to 1.3620 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3534.
USD/JPY – 110.22 (+54 or +0.49%)
Despite a strong USD rally across the board the Dollar Yen only managed to post a small gain for the week. We will be discussing this further in our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Weds 00:00 – Existing Home Sales
Thurs 00:00 – U.S. New Home Sales
Thurs 22:30 – Core Durable Goods M/m
Thurs 22:30 – GDP Q/q
Fri 22:30 – Core PCE M/m and Y/y
For a move to the upside we must now see this market hold above 109.68. Should this occur we will look for a retest of 109.94, and if momentum is very strong we could see a move higher into 110.38 and potentially 111.
If we cannot hold above 109.68, we could see a move back to test 109.21 before a pause to the downside. A break below this level may result in a sharp move lower into 108.60; and any further breaks to the downside may see a bigger move into 107.81.
COMMODITIES
GOLD – 1764 (-111 or -5.92%)
Gold endured it’s worst week since March 2020, erasing two months of gains. We will discuss what is next throughout the week in our LIVE CHAT ROOM.
VOLATILITY ALERTS:
Weds 22:30- Core PPI M/m & Y/y
Thurs 22:30 – Fed Interest Rate Decision and FOMC Press Conference
For a continued move higher we need to see this market hold above 1756. Should this occur we will move into 1786; and any break of this level could see a stronger move into 1814. If momentum is really strong then 1850 cannot be ruled out.
If Gold cannot hold above 1756, we will look for a move back down to 1720. A break below this level could see a move lower into 1700; and if momentum is very strong to the downside we could see a move to 1676.
CRYPTOS
BITCOIN – 35502 (-1622 or -4.37%)
Another rejection off the upside of the trading range Bitcoin has been in for almost a month.
For a move higher we must now see this market hold above 35000. Should this occur we could see a move into 40000 before retesting 42000. If upside momentum is really strong then we can’t rule out 50000.
Failure to hold at 35000 could see a move down to the lows around 30000. If selling pressure takes control then we could see a move down to 25700. A close below this level and 19000 can’t be ruled out.
