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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7310 (-38 or -0.52%)
A weak Friday saw the ASX edge lower for the second week in a row.
VOLATILITY ALERTS:
Tues 11:30 – RBA Meeting Minutes
For a move higher we would like to see the ASX close above 7400. Should this occur, a move into 7500 could be expected; and if momentum is strong we cannot rule out moves to 7600 and 7730.
Failure to close above 7400 means a potential move back into 7272. 7202 is the next support level down if 7091 doesn’t hold. If downside momentum is really strong then we could see a sharp move to 7000.
EUROPE
DAX – 15501 (-56 or -0.36%)
After a quiet four days, Friday’s sell off leaves the DAX with a second weekly decline in a row.
VOLATILITY ALERTS:
Thurs 17:30 – Markit Services / Manufacturing PMI
Fri 18:30 – Ifo Business Climate
For the DAX to continue its move higher we would like to see it hold above 15500. Should this occur then 15800 is the next level ahead. If upside momentum is strong then 16000 cannot be ruled out.
To the downside, should we not see it hold above 15500, we will look for a move into support at 15345. A strong break and close below this handle and 15050 is the next level down. If downside pressure mounts then 14805 cannot be ruled out.
US
S&P 500 – 4410 (-50 or -1.12%)
A weekly close below the ascending channel bottom and below the 50 day Moving Average – is this the start of a bigger correction?
VOLATILITY ALERTS:
Tues 22:30 – Building Permits
Thurs 00:00 – Existing Home Sales
Thurs 04:00 – Fed Interest Rate Decision
Thurs 04:30 – Fed Press Conference
Sat 00:00 – New Home Sales
For a move higher we would like to see the S&P close above 4421. Should this occur, we will look for a move to 4450, and if momentum is very strong we cannot rule out moves to 4505.
If we cannot close above 4421, we could see this market move down into 4375. A break of this level however may result in a quick move down to 4352, and if momentum to the downside remains strong we may see a fast move back down to 4300.
FOREX
AUD/USD – 0.7264 (-87 or -1.18%)
The Aussie Dollar is showing weakness alongside a move lower in Iron Ore prices + China’s economic slowdown – we will discuss this further inside our Live Chat Room.
VOLATILITY ALERTS:
Tues 11:30 – RBA Meeting Minutes
For a move higher this week, we would like to see it close above 0.7342. We will then be targeting a move back into 0.7423 where we may see a pause. If we see a strong break and close above this level then we can’t rule out a move to 0.7500.
If this market cannot close above 0.7342, we could see a move down into 0.7250. 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 0.7000.
EUR/USD – 1.1725 (-85 or -0.72%)
The Euro moved lower as the USD caught a bid late in the week thanks to strong U.S. data and twitchy stock markets – is this setting direction heading into the Fed?
VOLATILITY ALERTS:
Thurs 04:00 – Fed Interest Rate Decision
Thurs 04:30 – Fed Press Conference
For a move higher we would like to see the Euro close above 1.1738. Should this occur we could see a move into 1.1833 before a pause. A break of this level could see this market rally further to 1.1925; and if momentum is very strong, 1.2000 cannot be ruled out.
If the EURO cannot close above 1.1738, we could see a move into 1.1615. A strong break of this level may result in a move into 1.1570, however, any weakness below this level could see a sharp drop into 1.1500.
GBP/USD – 1.3729 (-101 or -0.73%)
VOLATILITY ALERTS:
Thurs 21:00 – BoE Interest Rate Decision
Like the previous two, the Cable also moved lower due to the USD strength – it could be a ‘battle of the banks’ this week with BoE and Fed both poised to make announcements.
For a move to the upside, we would like to see Cable hold 1.3755 before a break higher through 1.3865. If this market can see a strong close above this level we may then see a strong push back into 1.4000.
Should we fail to hold above 1.3755, we will look for a move down to 1.3666. A break below this level however could see Cable further depreciate to 1.3620 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3534.
USD/JPY – 109.97 (+4 or +0.04%)
The Dollar Yen closed the week flat in anticipation of the meetings of the Fed and BoJ this week.
VOLATILITY ALERTS:
Tues 22:30 – Building Permits (U.S.)
Weds 12:30 – BoJ Interest Rate Decision
Weds 16:30 – BoJ Press Conference
Thurs 00:00 – Existing Home Sales (U.S.)
Thurs 04:00 – Fed Interest Rate Decision
Thurs 04:30 – Fed Press Conference
Sat 00:00 – New Home Sales (U.S.)
For a move to the upside, we must now see this market close above 109.94. Should this occur we will look for a retest of 110.38, and if upside momentum is strong we could see a move higher into 111 and potentially 111.70.
If we cannot close above 109.94, we could see a move back to test 109.68 before a pause to the downside. A break below this level may result in a sharp move lower into 109.21, and any further breaks to the downside may see a bigger move into 107.81.
COMMODITIES
GOLD – 1754 (-33 or -1.85%)
Stronger than expected U.S. retail sales numbers saw GOLD get aggressively sold off as eyes remain fixed on the Fed this week.
For a move higher we need to see this market close above 1756. Should this occur we need to see a move back into 1786; and any break of this level could see a stronger move into 1814. If momentum is really strong then 1832 cannot be ruled out.
If Gold cannot close above 1756, we will look for a move back down to 1740. A break below this level could see a move lower into 1720, and if momentum is very strong to the downside we could see a move to 1678.
CRYPTOS
BITCOIN – 46941 (+1897 or +4.21%)
Bitcoin and other cryptos endured a quiet week, by their own standards, but did move higher slightly.
For a move higher we must now see this market hold above 47000. Should this occur we could see a move into 50000 before retesting 55000. If upside momentum is really strong then we can’t rule out 57545.
Failure to hold above 47000 could see a move down to 44000. If selling pressure takes control then we could see a move down to 42000. A close below this level and 40000 can’t be ruled out.
