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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7055 (-174 or -2.41%)
The ASX ended the week with a fast drop into the current range channel support.
VOLATILITY ALERTS:
Tues 10:30 – AUD Westpac Consumer Confidence
Weds 13:10 – RBA Gov Lowe speaks
For a move higher, we would like to see the ASX close above 7108. Should this occur, a move above 7159 should be expected, and if momentum is strong, we cannot rule out moves to 7209 and 7222.
Failure to close above 7108 means a potential move into 7011. 7000 is the next support level down if 7011 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6960.
EUROPE
DAX (40) – 15599 (-581 or -3.59%)
The DAX is holding its ground near the all time highs, will it make a higher high this week?
VOLATILITY ALERTS:
After the DAX made fresh all time highs it has retreated from the highs showing a lower high formation. Are the bulls waiting for support?
For the DAX to move higher, we would like to see it close above 15700. Should this occur, then 15790 is the next level ahead. If upside momentum is strong, then 15926 and 16025 cannot be ruled out.
To the downside, should we not see it hold above 15562, we will look for a move into support at 15394. A strong break and close below this handle and 15230 is the next level down. If downside pressure mounts, then 15187 cannot be ruled out.
US
S&P 500 – 4398 (-58 or -1.3%)
The SPX looks to still be moving upwards with the current moment. Can the current driving factors maintain the current momentum?
VOLATILITY ALERTS:
Wed 22:30 – USD Inflation Rate
Wed 22:30 – USD CPI
Thur 22:30 – USD Initial Jobless Claims
Thur 22:30 – USD PPI
For a move higher, we would like to see the S&P hold above 4370. Should this occur, we will look for a move through 4464. And if momentum is strong, we cannot rule out moves to 4520 and 4540.
If we cannot hold above 4370, we could see this market move down into 4309. A break of this level, however, may result in a quick move down to 4264. And if momentum to the downside remains strong, we may see a fast move back down to 4226.
FOREX
AUD/USD – 0.6684 (+27 or +0.41%)
The Aussie Dollar is right in the middle of a 4 month range. With a busy week of news, what will the catalyst be to spark the breakout direction?
VOLATILITY ALERTS:
Tues 10:30 – AUD Westpac Consumer Confidence
Wed 13:10 – AUD RBA Gov Lowe speaks
Wed 22:30 – USD Inflation Rate
Wed 22:30 – USD CPI
Thur 22:30 – USD Initial Jobless Claims
Thur 22:30 – USD PPI
For a move higher this week, we would like to see it hold above 0.6692. We will then be targeting a move through 0.6698. If we see a strong break and close above this level, then we can’t rule out a move to 0.6715. Should momentum to the upside be really strong, then 0.6730 could be targeted.
If this market cannot hold above 0.6673, we could see a move down to 0.6669. A strong break of this level may result in a move into 0.6659, however, any weakness below this level could see a sharp drop into 0.6649.
EUR/USD – 1.0964 (+55 or +0.5%)
The Euro remains under pressure with rallies still being sold into, a flat week overall staying inside the current range.
VOLATILITY ALERTS:
Tues 10:30 – EUR CPI
Wed 22:30 – USD Inflation Rate
Wed 22:30 – USD CPI
Thur 22:30 – USD Initial Jobless Claims
Thur 22:30 – USD PPI
For a move higher, we would like to see the Euro close above 1.0964. Should this occur, we should see a move above 1.1013. A break of this level could see this market rally further to 1.1076 and 1.1151.
If the EURO cannot close above 1.09075, we will see a move into 1.0866. A strong break of this level may result in a move into 1.0832, however, any weakness below this level could see a move into 1.0764.
GBP/USD – 1.2825 (+128 or +1.01%)
The Pound remains at the monthly highs, could the USD news this week be the decider?
VOLATILITY ALERTS:
Tues 10:30 – GBP Retail Sales Monitor
Tues 16:00 – GBP Unemployment Rate
Wed 22:30 – USD Inflation Rate
Wed 22:30 – USD CPI
Thur 22:30 – USD Initial Jobless Claims
Thur 22:30 – USD PPI
For a move to the upside, we would like to see Cable hold above 1.2817 before a break higher into 1.1284. If this market can see a strong close above this level, we may then see a strong pushback into 1.2871. If upside momentum is really strong, then a move back into 1.2955 can’t be ruled out.
Should we fail to hold above 1.2817, we will look for a move down to 1.2807. A break below this level, however, could see Cable further depreciate to 1.2783 by the week’s end. And if momentum is very weak, we cannot rule out a move to 1.2761.
USD/JPY – 142.52 (-186 or -1.29%)
The Dollar Yen’s upwards momentum slowed as we hit a key resistance level.
VOLATILITY ALERTS:
Wed 22:30 – USD Inflation Rate
Wed 22:30 – USD CPI
Thur 22:30 – USD Initial Jobless Claims
Thur 22:30 – USD PPI
For a move to the upside, we must now see this market close above 142.63. Should this occur, we will look for a move into 142.94, and if the upside momentum is strong, we could see a move higher into 143.24 and potentially 143.40.
If we cannot close above 142.63, we could see a move back to test 142.25 before a pause to the downside. A break below this level may result in a sharp move lower into 141.91, and any further breaks to the downside may see a bigger move into 141.60.
COMMODITIES
GOLD – 1947 (+8 or +0.42%)
After making new all time highs GOLD has slowly been moving downwards as the days continue. Are the bulls buying the dip?
VOLATILITY ALERTS:
Wed 22:30 – USD Inflation Rate
For a move higher, we need to see this market close above 1930. Should this occur we could see a move into 1945; and any break of this level could see a stronger move into 1962. If momentum is strong, then 1983 cannot be ruled out.
If Gold cannot close above 1930, we can see a move down to 1918. A break below this level could see a move lower into 1907; and if momentum is very strong to the downside, we could see a move to 1893.
CRYPTOS
BITCOIN – 27190 (-516 or -1.69%)
After a good run BTC is forming what looks to be a double top formation.
For a move higher, we must now see this market close above 30000. Should this occur, we could see a move into 31320 before retesting 32712. If the upside momentum is really strong, then we can’t rule out 33000.
Failure to close above 30000 could see a move into 29259. If selling pressure takes control, then we could see a move down to 28074. A close below this level and 26481 can’t be ruled out. 20000 is the more psychological handle below that.
