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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7104 (-203 or -2.78%)
Banking issues in the US have caused market jitters as far as Australia…
VOLATILITY ALERTS:
Thurs 11:30 – Employment Change and Unemployment Rate
For a move higher we would like to see the ASX close firmly above 7135. Should this occur, a move above 7215 should be expected, and if momentum is strong we cannot rule out moves to 7310 and 7350.
Failure to close above 7135 means a potential move into 7030. 6915 is the next support level down if 7030 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6810.
EUROPE
DAX – 15292 (-336 or -2.15%)
The DAX closed lower after failing to secure a firm break of the recent range highs.
VOLATILITY ALERTS:
Fri 00:15 – ECB Interest Rate Decision
Fri 00:45 – ECB Press Conference
For the DAX to move higher we would like to see it close above 15325. Should this occur then 15515 is the next level ahead. If upside momentum is strong then 15730 and 15970 cannot be ruled out.
To the downside, should we not see it close above 15325, we will look for a move into support at 15235. A strong break and close below this handle and 15050 is the next level down. If downside pressure mounts then 14915 cannot be ruled out.
US
S&P 500 – 3876 (-172 or -4.25%)
The SPX came back into the long-term descending trend line on Friday and found some useful support…
VOLATILITY ALERTS:
Tues 23:30 – CPI & Core CPI m/m and y/y
Weds 23:30 – PPI & Core PPI m/m and y/y, Retail Sales m/m, Empire State Manufacturing Index
Sat 01:00 – Prelim UoM Consumer Sentiment
For a move higher we would like to see the S&P close above 3915. Should this occur, we will look for a move to 3965, and if momentum is strong we cannot rule out moves to 3965 and 4095.
If we cannot close above 3915, we could see this market move down into 3810. A break of this level, however, may result in a quick move down to 3715; and if momentum to the downside remains strong we may see a fast move back down to 3635.
FOREX
AUD/USD – 0.6581 (-185 or -2.73%)
The Aussie Dollar moved lower along with risk compounded by the RBA’s ‘dovish hike’ midweek.
VOLATILITY ALERTS:
Thurs 11:30 – Employment Change and Unemployment Rate
For a move higher this week we would like to see it close above 0.6585. We will then be targeting a move through 0.6670. If we see a strong break and close above this level then we can’t rule out a move to 0.6715. Should momentum to the upside be really strong then 0.6825 could be targeted.
If this market cannot hold above 0.6585, we could see a move down into 0.6525. A strong break of this level may result in a move into 0.6385, however, any weakness below this level could see a sharp drop into 0.6270.
EUR/USD – 1.0639 (+5 or +0.05%)
A strong Friday saw the Euro claw back early week losses and end the week more or less flat.
VOLATILITY ALERTS:
Fri 00:15 – ECB Interest Rate Decision
Fri 00:45 – ECB Press Conference
For a move higher we would like to see the Euro hold above 1.0600. Should this occur we could see a move into 1.0760. A break of this level could see this market rally further to 1.0940 and 1.1115.
If the EURO cannot hold above 1.0600 we will see a move into 1.0470. A strong break of this level may result in a move into 1.0355, however, any weakness below this level could see a move into 1.0280.
GBP/USD – 1.2031 (-12 or -0.1%)
The Cable edged slightly lower with similar price action to the Euro meaning we also saw a relatively flat close.
VOLATILITY ALERTS:
Tues 18:00 – Claimant Count Change
Weds 23:30 – Annual Budget Release
For a move to the upside, we would like to see Cable close above 1.2145 before a break higher into 1.2275. If this market can see a strong close above this level we may then see a strong push back into 1.2400 If upside momentum is really strong then a move back into 1.2600 can’t be ruled out.
Should we fail to close above 1.2145, we will look for a move down to 1.1930. A break below this level however could see Cable further depreciate to 1.1740 by the week’s end and if momentum is very weak we cannot rule out a move to 1.1610.
USD/JPY – 135.08 (-76 or -0.56%)
The Dollar Yen moved lower after rejecting off its 200 DMA and highs from Nov/Dec/
VOLATILITY ALERTS:
Tues 23:30 – CPI & Core CPI m/m and y/y
Weds 23:30 – PPI & Core PPI m/m and y/y, Retail Sales m/m, Empire State Manufacturing Index
Sat 01:00 – Prelim UoM Consumer Sentiment
For a move to the upside, we must now see this market hold above 134.50. Should this occur we will look for a move into 137.55, and if upside momentum is strong we could see a move higher into 139.45 and potentially 142.25.
If we cannot hold above 134.50, we could see a move back to test 132.50 before a pause to the downside. A break below this level may result in a sharp move lower into 131.40, and any further breaks to the downside may see a bigger move into 129.50.
COMMODITIES
GOLD – 1867 (+12 or +0.65%)
Strong Friday for GOLD with bond yields heading south and banks facing issues in the US.
VOLATILITY ALERTS:
Tues 23:30 – CPI & Core CPI m/m and y/y
Weds 23:30 – PPI & Core PPI m/m and y/y, Retail Sales m/m, Empire State Manufacturing Index
Sat 01:00 – Prelim UoM Consumer Sentiment
For a move higher we need to see this market hold above 1850. Should this occur we could see a move into 1870; and any break of this level could see a stronger move into 1895. If momentum is strong then 1910 cannot be ruled out.
If Gold cannot hold above 1850, we can see a move down to 1830. A break below this level could see a move lower into 1805; and if momentum is very strong to the downside we could see a move to 1785.
CRYPTOS
BITCOIN – 20590 (-1852 or -8.25%)
BTC crumbled in the week with a combination of macro and technicals giving ample reasons for sellers to dive in.
For a move higher we must now see this market close above 21715. Should this occur we could see a move into 23675 before retesting 25875. If upside momentum is really strong then we can’t rule out 28000.
Failure to close above 21715 could see a move into 20000. If selling pressure takes control then we could see a move down to 18700. A close below this level and 17500 can’t be ruled out, maybe even a 15515 print.
