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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7185 (+2 or +0.03%)
The ASX closed the week almost to the point flat – levels remain unchanged.
For a move higher we would like to see the ASX hold above 7091. Should this occur, a move into 7202 could be expected; and if momentum is strong we cannot rule out moves to 7272 and 7400.
Failure to hold above 7091 means a potential move back into 7000. 6740 is the next support level down if 6894 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6640.
EUROPE
DAX – 14989 (-151 or -1%)
The DAX edged lower and volatility remains high – can it continue holding at key support?
VOLATILITY ALERTS:
Mon 18:30 – Markit Manufacturing, Composite and Services PMI
Tues 19:30 – IFO Business Climate
Fri 17:00 – GDP Q/q
For the DAX to move higher we would like to see it close above 15050. Should this occur then 15345 is the next level ahead. If upside momentum is strong then 15585 and 15780 cannot be ruled out.
To the downside, should we not see it close above 15050, we will look for a move into support at 14779. A strong break and close below this handle and 14425 is the next level down. If downside pressure mounts then 14140 cannot be ruled out.
US
S&P 500 – 4344 (-84 or -1.9%)
The threat of war is the main narrative in play right now and investors have been selling risk on the back of it.
VOLATILITY ALERTS:
Weds 01:00 – CB Consumer Confidence
Thurs 23:30 – GDP Q/q
Fri 01:00 – New Homes Sales
Fri 23:30 – Core Durable Goods Orders M/m
Sat 01:00 – Pending Homes Sales M/m
For a move higher we would like to see the S&P hold above 4330. Should this occur, we will look for a move to 4375; and if momentum is strong we cannot rule out moves to 4432 and 4480.
If we cannot hold above 4330, we could see this market move down into 4285. A break of this level however may result in a quick move down to 4233, and if momentum to the downside remains strong we may see a fast move back down to 4135.
FOREX
AUD/USD – 0.7176 (+48 or +0.67%)
The Aussie Dollar held up quite well despite the ongoing geopolitical risks and more dovish comments from the RBA.
For a move higher this week, we would like to see it hold above 0.7170. We will then be targeting a move through 0.7225. If we see a strong break and close above this level then we can’t rule out a move to 0.7250.
If this market cannot close above 0.7170, we could see a move down into 0.7105. A strong break of this level may result in a move into 0.7065, however, any weakness below this level could see a sharp drop into 0.6995.
EUR/USD – 1.1346 (-26 or -0.23%)
The Euro had quite a choppy week overall and is now back within its trading range.
VOLATILITY ALERTS:
Weds 20:00 – EU Core CPI & CPI M/m and Y/y
For a move higher we would like to see the Euro hold above 1.1345. Should this occur we could see a move into 1.1425. A break of this level could see this market rally further to 1.1500.
If the EURO cannot hold above 1.1345, we will see a move back into 1.1225. A strong break of this level may result in a move into 1.1155, however, any weakness below this level could see a sharp drop into 1.1110.
GBP/USD – 1.3594 (+35 or +0.26%)
The Cable continues to spend its February range bound.
For a move to the upside, we would like to see Cable hold above 1.3535 before a break higher through 1.3620. If this market can see a strong close above this level we may then see a strong push back into 1.3670. If upside momentum is really strong then a move back into 1.3750 can’t be ruled out.
Should we fail to hold above 1.3535, we will look for a move down to 1.3435. A break below this level however could see Cable further depreciate to 1.3290 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3198.
USD/JPY – 115.03 (-45 or -0.39%)
The Dollar Yen continues to chop as flow goes into the havens of both the USD and JPY.
VOLATILITY ALERTS:
Weds 01:00 – CB Consumer Confidence
Thurs 23:30 – GDP Q/q
Fri 01:00 – New Homes Sales
Fri 23:30 – Core Durable Goods Orders M/m
Sat 01:00 – Pending Homes Sales M/m
For a move to the upside, we must now see this market hold above 114.70. Should this occur we will look for a move into 115.55, and if upside momentum is strong we could see a move higher into 116.10 and potentially 117.
If we cannot hold above 114.70, we could see a move back to test 114.23 before a pause to the downside. A break below this level may result in a sharp move lower into 113.20, and any further breaks to the downside may see a bigger move into 112.25.
COMMODITIES
GOLD – 1897 (+39 or +2.1%)
Gold has broken out – any Russian invasion will see this market rally strongly from here.
For a move higher we need to see this market hold above 1850. Should this occur we could see a move back into 1875, and any break of this level could see a stronger move into 1905. If momentum is really strong then 1930 cannot be ruled out.
If Gold cannot hold above 1850, we will look for a move back down to 1830. A break below this level could see a move lower into 1815, and if momentum is very strong to the downside we could see a move to 1785.
CRYPTOS
BITCOIN – 39986 (-2556 or -6.01%)
BTC was sent lower on the global risk-off sentiment and is now trading back below the 40k handle.
For a move higher we must now see this market hold above 39839. Should this occur we could see a move into 43233 before retesting 44000. If upside momentum is really strong then we can’t rule out 47000.
Failure to hold above 39839 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 29444 can’t be ruled out, maybe even a 27434 print.
