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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7006 (-65 or -0.92%)
A firm rejection at overhead resistance on Friday as the ASX edged lower for the week.
For a move higher we would like to see the ASX close above 7030. Should this occur, a move into 7135 could be expected; and if momentum is strong we cannot rule out moves to 7195 and 7300.
Failure to close above 7030 means a potential move into 6980. 6875 is the next support level down if 6980 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6745.
EUROPE
DAX – 12816 (-717 or -5.3%)
Jackson Hole spooked markets on Friday, with the DAX selling off aggressively.
VOLATILITY ALERTS:
Tues ALL DAY – German Prelim CPI
For the DAX to move higher we would like to see a strong close above 12965. Should this occur then 13250 is the next level ahead. If upside momentum is strong then 13600 and 13890 cannot be ruled out.
To the downside, should we not see it close 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 – 4041(-184 or -4.36%)
The SPX also sold off aggressively on Friday as the Fed reiterated their number one goal is to tame inflation.
VOLATILITY ALERTS:
Weds 00:00 – CB Consumer Confidence
Weds 00:00 – JOLTS Jobs Openings
Fri 00:00 – ISM Manufacturing PMI
Fri 22:30 – Non-Farm Payrolls
For a move higher we would like to see the S&P close above 4085. Should this occur, we will look for a move to 4160; and if momentum is strong we cannot rule out moves to 4210 and 4300.
If we cannot hold above 4085, we could see this market move down into 4035. A break of this level however may result in a quick move down to 3965; and if momentum to the downside remains strong we may see a fast move back down to 3915.
FOREX
AUD/USD – 0.6891 (+20 or +0.29%)
The Aussie Dollar felt the risk-off pain on Friday, erasing all its weekly gains to end the week almost flat.
For a move higher this week, we would like to see it hold above 0.6850. 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 0.6850, we could see a move down into 0.6765. A strong break of this level may result in a move into 0.6715, any weakness below this level could see a sharp drop into 0.6670.
EUR/USD – 0.9964 (-77 or -0.77%)
The Euro closed the week below parity and now looks to have a tough task breaking back above.
VOLATILITY ALERTS:
Tues ALL DAY – German Prelim CPI
Fri 22:30 – Non-Farm Payrolls
For a move higher we would like to see the Euro close above 1.0000. Should this occur we could see a move into 1.0072. A break of this level could see this market rally further to 1.0215 and 1.0355.
If the EURO cannot close above 1.0000, we will see a move into 0.9950. A strong break of this level may result in a move into 0.9875, however any weakness below this level could see a move into 0.9700.
GBP/USD – 1.1738(-91 or -0.77%)
The Cable continues to be the hardest hit of the majors with further breaks of the yearly lows expected.
For a move to the upside, we would like to see Cable hold above 1.1760 before a break higher into 1.1825. If this market can see a strong close above this level we may then see a strong pushback into 1.1955. If upside momentum is really strong then a move back into 1.2075 can’t be ruled out.
Should we fail to hold above 1.1760, we will look for a move down to 1.1640. A break below this level however could see Cable further depreciate to 1.1490 by the week’s end and if momentum is very weak we cannot rule out a move to 1.1400.
USD/JPY – 137.49 (+63 or +0.46%)
The Dollar Yen has now almost fully faded the recent pullback and looks set to threaten to push new multi-decade highs.
VOLATILITY ALERTS:
Weds 00:00 – CB Consumer Confidence
Weds 00:00 – JOLTS Jobs Openings
Fri 00:00 – ISM Manufacturing PMI
Fri 22:30 – Non-Farm Payrolls
For a move to the upside, we must now see this market hold above 137.20. Should this occur we will look for a move into 139.30, and if upside momentum is strong we could see a move higher into 140 and potentially 142.
If we cannot hold above 137.20, we could see a move back to test 135.30 before a pause to the downside. A break below this level may result in a sharp move lower into 134.60, and any further breaks to the downside may see a bigger move into 133.70.
COMMODITIES
GOLD – 1738 (-9 or -0.52%)
Sellers remain in control of Gold as a midweek rally was sold into on Friday.
VOLATILITY ALERTS:
Fri 22:30 – Non-Farm Payrolls
For a move higher we need to see this market close above 1740. Should this occur we could see a move into 1750; and any break of this level could see a stronger move into 1765. If momentum is strong then 1785 cannot be ruled out.
If Gold cannot close above 1740, we will look for a move down to 1720. A break below this level could see a move lower into 1710; and if momentum is very strong to the downside we could see a move to 1697.
CRYPTOS
BITCOIN – 19900 (-1353 or -6.37%)
Sellers have re-emerged across risk assets and BTC has now broken down through key channel support.
For a move higher we must now see this market close 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 12320 print.
