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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7041 ( -26 or -0.37% )
The ASX closed slightly down despite what was a strong start to the week. The slow grind to all time highs continues.
VOLATILITY ALERTS:
Tues – 11:30 – Monetary Policy Minutes
Weds 10.30 – Westpac Consumer Sentiment
Thurs 11.30 – Unemployment Rate
For a continued move higher we would like to see the ASX close above 7091. Should this occur, a move to the all time highs at 7202 should be expected; and if momentum is very strong we cannot rule out moves to 7272.
Failure to close above 7091 means a potential move back into 6969. 6850 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 6804.
EUROPE
DAX – 15467 (+78 or +0.51% )
A volatile week for the DAX with an important double bottom printed off a key support level – setting up for a push through its highs this week?
VOLATILITY ALERTS:
Thurs 16:00 – German PPI M/m
Fri 17:30 – German Flash Manufacturing PMI and Flash Services PMI
For the DAX to continue its move higher we first want to see it hold above 15345. Should this occur then 15500 is the next technical level ahead. If upside momentum really takes hold then 15782 cannot be ruled out.
To the downside, should we see a rejection from 15345, we will look for a move into support at 15050. A strong break and close below this handle and 14990 is the next leg down. If downside pressure mounts then 14790 cannot be ruled out.
US
S&P 500 – 4177 (-58 or -1.37% )
The S&P endured it’s most volatile week since March as further inflation concerns caused a midweek sell off – however, a V reversal is in play. We will be discussing this in our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Tues 22:30 – Housing Starts
Thurs 04:00 – FOMC Minutes
Fri 11:45 – Flash Manufacturing PMI
For a move higher we would like to see the S&P close above 4200. Should this occur, we will look for a move to 4252; and if momentum is very strong we cannot rule out moves to 4300 and 4435.
If we cannot close above 4200, we could see this market move back down into 4155. A break of this level however may result in a quick move down to 4117; and if momentum to the downside remains strong we may see a fast move back down to 4050.
FOREX
AUD/USD – 0.7780(-63 or -0.8%)
Another choppy week for the Aussie Dollar – is a big head and shoulders pattern in play? We will discuss this further inside our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Mon – 11:30 – Retails Sales M/m
For a move higher this week we would like to see it close above 0.7823. We will then be targeting a move back into 0.7997. If we see a strong break and close above this level then we can’t rule out a move to 0.8132.
If this market cannot close above 0.7823, we could see a move back down into 0.7729 before a pause. A strong break of this level may result in a move into 0.7660, however any weakness below this level could see a sharp drop into 0.7562.
EUR/USD – 1.2145 (-18 or -0.15%)
Despite a relatively volatile week the Euro closed flat so our levels remain unchanged.
VOLATILITY ALERTS:
Thurs 16:00 – German PPI M/m
Thurs 22:00 – President Lagarde Speaks
Fri 17:30 – German Flash Manufacturing PMI and Flash Services PMI
For a move higher we would like to see the EURO hold above 1.2113. Should this occur we could see a move into 1.2170. A break of this level could see this market rally further to 1.2222; and if momentum is very strong, 1.2353 cannot be ruled out.
If the EURO cannot close above 1.2113, we could see a move back down into 1.2000 before a pause. A strong break of this level may result in a move into 1.1925, however any weakness below this level could see a sharp drop into 1.1833.
GBP/USD – 1.4095 ( +107 or +0.76%)
The Cable finally managed to get through a key resistance handle – is this the start of another leg up? We will be discussing this in our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Tue 16:00 – Unemployment Rate
Weds 16:00 – Core CPI and CPI
Fri 16:00 – Retail Sales M/m
Fri 18:30 – Flash Manufacturing PMI
For a move to the upside, we would like to see Cable hold above 1.4000, before a break higher through 1.4125. If this market can see a strong close above this level we may then see a strong push into 1.4250.
Should we fail to hold above 1.4000, we will look for a move down to 1.3865. A break below this level however could see Cable further depreciate to 1.3755 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3666.
USD/JPY – 109.35 ( +77 or +0.71% )
The USD showed strength from the back of surprise midweek inflation numbers but paused at a key level. We will be discussing this further in our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Tues 22:30 – U.S. Housing Starts
Thurs 04:00 – FOMC Minutes
Fri 11:45 – U.S. Flash Manufacturing PMI
For a move to the upside we must now see this market hold above 109.21. Should this occur we will look for a retest of 109.68, and if momentum is very strong we could see a move higher into 109.94 and potentially 110.38.
If we cannot hold above 109.21, we could see a move lower into 108.60 before a pause to the downside. A break below this level may result in a sharp move lower into 107.81; and any further breaks to the downside may see a bigger move into 106.97.
COMMODITIES
GOLD – 1843 (+12 or +0.66% )
Is Gold ready to breakout? One of the most interesting charts right now. We will be discussing this throughout the week in our LIVE CHAT ROOM this week.
For a continued move higher we need to see this market hold above 1814. Should this occur we will move into 1850; and any break of this level could see a stronger move into 1875. If momentum is really strong then 1905 cannot be ruled out.
If Gold cannot hold above 1814, we will look for a move back down to 1800. A break below this level could see a move lower into 1755; and if momentum is very strong to the downside we could see a move to 1700.
CRYPTOS
BITCOIN – 48906 ( -10134 or -17.16% )
Bitcoin endured another highly volatile week as Tesla CEO Elon Musk’s tweet caused mass selling on Thursday. We will be discussing what this means in our LIVE CHAT ROOM this week.
For a move higher we must now see this market hold above 55415. Should this occur we could see a move into 56781 before retesting 60000. If upside momentum is really strong then we can’t rule out 65000.
Failure to hold at 55415 could see a move down to 53000. If selling pressure takes control then we could see another big test of support at 46192. A close below this level and 44098 can’t be ruled out.
