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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7486 (-124 or -1.63%)
The ASX came off its highs to edge lower and erase most of the two previous weeks gains.
VOLATILITY ALERTS:
Mon 09:00 – Commonwealth Market Manufacturing, Services and Composite PMI
Fri 11:30 – Retail Sales M/m
For a continued move higher we would like to see the ASX close above 7500. Should this occur, a move into 7600 could be expected; and if momentum is strong we cannot rule out moves to 7730 and 7750.
Failure to hold above 7500 means a potential move back into 7400. 7272 is the next support level down if 7202 doesn’t hold. If downside momentum is really strong then we could see a sharp move to 7000.
EUROPE
DAX – 15826 (-174 or -1.09%)
A strong close on Friday meant the DAX managed to hold just above a key level – is that telling for direction this coming week?
VOLATILITY ALERTS:
Mon 17:30 – Market Manufacturing, Services and Composite PMI
Tues 16:30 – GDP Q/q
Weds 18:30 – IFO Business Climate
For the DAX to continue its move higher we would like to see it close above 15800. Should this occur then 16000 is the next level ahead. If upside momentum is strong then 16157 cannot be ruled out.
To the downside, should we not see it hold above 15800, we will look for a move into support at 15500. A strong break and close below this handle and 15345 is the next level down. If downside pressure mounts then 15050 cannot be ruled out.
US
S&P 500 – 4465 (-23 or -0.52%)
Another test of the channel support and another hold for the bulls.
VOLATILITY ALERTS:
Tues 00:00 – Existing Home Sales
Weds 00:00 – New Home Sales
Weds 22:30 – Durable Goods Orders M/m
Thurs 22:30 – GDP Q/q
Fri 22:30 – Core PCE Index M/m
For a move higher we would like to see the S&P close back above 4450. Should this occur, we will look for a move to 4500, and if momentum is very strong we cannot rule out moves to 4531 and 4600.
If we cannot close above 4450, we could see this market move down into 4425. A break of this level however may result in a quick move down to 4375, and if momentum to the downside remains strong we may see a fast move back down to 4300.
FOREX
AUD/USD – 0.7137 (-233 or -3.16%)
A big breakout of recent consolidation and the Aussie Dollar felt some pain – is more to come or will they try to stabilize this week?
VOLATILITY ALERTS:
Mon 09:00 – Commonwealth Market Manufacturing, Services and Composite PMI
Fri 11:30 – Retail Sales M/m
For a move higher this week we would like to see it hold above 0.7065. We will then be targeting a move back into 0.7250 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 0.7343.
If this market cannot close above 0.7065, we could see a move down into 0.6986. A strong break of this level may result in a move into 0.6837, however any weakness below this level could see a sharp drop into 0.6689.
EUR/USD – 1.1699 (-96 or -0.81%)
The Euro has now taken out the yearly lows – is a further move down in-store?
VOLATILITY ALERTS:
Mon 18:00 – Market Manufacturing, Services and Composite PMI
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 1.1500, however, any weakness below this level could see a sharp drop into 1.1422.
GBP/USD – 1.3621 (-249 or -1.8%%)
VOLATILITY ALERTS:
Tues 16:00 – Core CPI M/m
The Cable got sold off quite aggressively and a retest of the yearly lows is on the cards.
For a move to the upside, we would like to see Cable hold 1.3865 before a break higher through 1.4000. If this market can see a strong close above this level we may then see a strong push back into 1.4125.
Should we fail to hold above 1.3865, we will look for a move down to 1.3755. A break below this level however could see Cable further depreciate to 1.3666 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3620.
USD/JPY – 109.79 (+20 or +0.18%)
Quite a choppy week for the Dollar Yen due to stock market volatility, but it does edge slightly higher – we will discuss this further inside our LIVE CHAT ROOM this week.
VOLATILITY ALERTS:
Tues 00:00 – Existing Home Sales
Weds 00:00 – New Home Sales
Weds 22:30 – Durable Goods Orders M/m
Thurs 22:30 – GDP Q/q
Fri 22:30 – Core PCE Index M/m
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 – 1780 (+1 or +0.06%)
A muted week for Gold as price attempts to stabilize post-flash-crash.
For a continued move higher we need to see this market hold above 1756. Should this occur we need to see a move through 1786; and any break of this level could see a stronger move into 1800. If momentum is really strong then 1814 cannot be ruled out.
If Gold cannot hold 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 – 49193 (-1423 or -2.99%)
A strong break higher on Friday and the 50k handle is now in sight – how long will it be before new ATH’s are posted?
For a move higher we must now see this market hold above 47500. 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 47500 could see a move down to 44000. If selling pressure takes control then we could see a move down to 40000. A close below this level and 35000 can’t be ruled out.
