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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7342 (-3 or -0.04%)
The ASX closed the week nearly flat and our levels remain the same.
VOLATILITY ALERTS:
Tues 14:30 – RBA Interest Rate Decision
Fri 11:30 – RBA Monetary Policy Statement
For a move higher we would like to see the ASX close above 7400. Should this occur, a move into 7485 could be expected; and if momentum is strong we cannot rule out moves to 7545 and 7640.
Failure to close above 7400 means a potential move back into 7272. 7200 is the next support level down if 7272 doesn’t hold. If downside momentum is really strong then we could see another leg down into 7095.
EUROPE
DAX – 13904 (-130 or -0.93%)
The DAX continues to put in lower highs which doesn’t bode well for long.
For the DAX to move higher we would like to see it close above 14140. Should this occur then 14780 is the next level ahead. If upside momentum is strong then 15050 and 15345 cannot be ruled out.
To the downside, should we not see it close above 14140, we will look for a move into support at 13610. A strong break and close below this handle and 13250 is the next level down. If downside pressure mounts then 12445 cannot be ruled out.
US
S&P 500 – 4142 (-104 or -2.45%)
An ugly close to the week on Friday saw the SPX back perilously close to its yearly lows.
VOLATILITY ALERTS:
Tues 00:00 – ISM Manufacturing PMI
Weds 00:00 – JOLTS Jobs Openings
Thurs 00:00 – ISM Services PMI
Thurs 04:00 – Federal Funds Rate and FOMC Statement
Thurs 04:30 – FOMC Press Conference
Fri 22:30 – Non-Farm Payrolls and Unemployment Rate
For a move higher we would like to see the S&P hold above 4140. Should this occur, we will look for a move to 4230; and if momentum is strong we cannot rule out moves to 4285 and 4330.
If we cannot hold above 4140, 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 3870.
FOREX
AUD/USD – 0.7059 (-185 or -2.55%)
Another week to forget for Aussie dollar longs as USD bulls remain in full control of the G10 FX space.
VOLATILITY ALERTS:
Tues 14:30 – RBA Interest Rate Decision
For a move higher this week, we would like to see it close above 0.7060. We will then be targeting a move through 0.7100. If we see a strong break and close above this level then we can’t rule out a move to 0.7170. Should momentum to the upside be really strong then 0.7220 could be targeted.
If this market cannot close above 0.7060, we could see a move down into 0.6995. A strong break of this level may result in a move into 0.6930, however, any weakness below this level could see a sharp drop into 0.6850.
EUR/USD – 1.0541 (-255 or -2.36%)
The Euro has been nosediving as USD bulls are proving too strong – but could this week’s FOMC be a ‘buy the rumour, sell the fact’ event?
VOLATILITY ALERTS:
Tues 00:00 – ISM Manufacturing PMI
Weds 00:00 – JOLTS Jobs Openings
Thurs 00:00 – ISM Services PMI
Thurs 04:00 – Federal Funds Rate and FOMC Statement
Thurs 04:30 – FOMC Press Conference
Fri 22:30 – Non Farm Payrolls and Unemployment Rate
For a move higher we would like to see the Euro close above 1.0572. Should this occur we could see a move into 1.0635. A break of this level could see this market rally further to 1.0720 and 1.0780.
If the EURO cannot close above 1.0572, we will see a move into 1.0495. A strong break of this level may result in a move into 1.0445, however, any weakness below this level could see a sharp drop into 1.0355.
GBP/USD – 1.2575 (-262 or -2.04%)
Like the Euro, the Cable has also been in freefall – was Friday’s move just a ‘dead cat bounce’ or is there more to it?
VOLATILITY ALERTS:
Thurs 21:00 – BOE Monetary Policy Report & Interest Rate Decision
For a move to the upside, we would like to see Cable close above 1.2585 before a break higher into 1.2680. If this market can see a strong close above this level we may then see a strong push back into 1.2765. If upside momentum is really strong then a move back into 1.2855 can’t be ruled out.
Should we fail to close above 1.2585, we will look for a move down to 1.2392. A break below this level however could see Cable further depreciate to 1.2245 by the week’s end and if momentum is very weak we cannot rule out a move to 1.2075.
USD/JPY – 128.55 (+130 or +1.01%)
New 20 year highs for the Dollar Yen as it tests 130 – at what point does the BoJ step in?
VOLATILITY ALERTS:
Thurs 04:00 – Federal Funds Rate and FOMC Statement
Thurs 04:30 – FOMC Press Conference
Fri 22:30 – Non Farm Payrolls and Unemployment Rate
For a move to the upside, we must now see this market hold above 129. Should this occur we will look for a move into 130.85, and if upside momentum is strong we could see a move higher into 132.35 and potentially 133.75.
If we cannot hold above 129, we could see a move back to test 127.75 before a pause to the downside. A break below this level may result in a sharp move lower into 125.85, and any further breaks to the downside may see a bigger move into 125.20.
COMMODITIES
GOLD – 1895 (-36 or -1.86%)
Choppy week for Gold but another move lower as risk-off remains the main sentiment driving markets.
VOLATILITY ALERTS:
Thurs 04:00 – Federal Funds Rate and FOMC Statement
Thurs 04:30 – FOMC Press Conference
Fri 22:30 – Non Farm Payrolls and Unemployment Rate
For a move higher we need to see this market close above 1915. Should this occur we could see a move back into 1935, and any break of this level could see a stronger move into 1965. If momentum is strong then 2000 cannot be ruled out.
If Gold cannot close above 1915, we will look for a move back down to 1900. A break below this level could see a move lower into 1875, and if momentum is very strong to the downside we could see a move to 1850.
CRYPTOS
BITCOIN – 39590 (-1064 or -2.69%)
BTC edged lower again but is holding well at key support – can the sellers find some extra momentum to see new lows posted?
For a move higher we must now see this market close above 39555. Should this occur we could see a move into 43233 before retesting 48570. If upside momentum is really strong then we can’t rule out 50000.
Failure to close above 39555 could see a move down to 35050. If selling pressure takes control then we could see a move down to 32300. A close below this level and 29300 can’t be ruled out, maybe even a 28500 print.
