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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7585 (+69 or +0.92%)
Another leg higher for the ASX and now looks to follow the FTSE to break through new all-time highs.
VOLATILITY ALERTS:
Tues 14:30 – RBA Interest Rate Decision
For a move higher we would like to see the ASX hold above 7555. Should this occur, a move above 7620 should be expected, and if momentum is strong we cannot rule out moves to 7650 and 7695.
Failure to hold above 7555 means a potential move into 7500. 7440 is the next support level down if 7500 doesn’t hold. If downside momentum is really strong then we could see another leg down into 7350.
EUROPE
DAX – 15423 (+270 or +1.78%)
Strong week for the DAX with a firm upside breakout of recent consolidation.
For the DAX to move higher we would like to see it hold 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 hold above 15325, we will look for a move into support at 15050. A strong break and close below this handle and 14915 is the next level down. If downside pressure mounts then 14710 cannot be ruled out.
US
S&P 500 – 4134 (+66 or +1.62%)
Interesting week for the SPX with a dovish reaction to a (still) hawkish Fed, finished up with a mixed reaction to a hot jobs report!
VOLATILITY ALERTS:
Weds 04:00 – Fed Chair Powell speaks
Thurs 01:15 – Fed Member Williams speaks
Sat 02:00 – Prelim UoM Consumer Sentiment
For a move higher we would like to see the S&P hold above 4095. Should this occur, we will look for a move to 4145, and if momentum is strong we cannot rule out moves to 4215 and 4320.
If we cannot hold above 4095, we could see this market move down into 4040. 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 3915.
FOREX
AUD/USD – 0.6922 (-187 or -2.63%)
The Aussie Dollar sold off aggressively on Friday and bulls must hold at a key support level.
VOLATILITY ALERTS:
Tues 14:30 – RBA Interest Rate Decision
For a move higher this week we would like to see it hold above 0.6915. We will then be targeting a move through 0.6960. If we see a strong break and close above this level then we can’t rule out a move to 0.7000. Should momentum to the upside be really strong then 0.7045 could be targeted.
If this market cannot hold above 0.6915, we could see a move down into 0.6870. A strong break of this level may result in a move into 0.6830, however, any weakness below this level could see a sharp drop into 0.6715.
EUR/USD – 1.0794 (-74 or -0.68%)
The Euro edged lower but with the central bank divergence, does this present a good opportunity to buy into the pullback?
VOLATILITY ALERTS:
Weds 04:00 – Fed Chair Powell speaks
Thurs 01:15 – Fed Member Williams speaks
Sat 02:00 – Prelim UoM Consumer Sentiment
For a move higher we would like to see the Euro hold above 1.0760. Should this occur we could see a move into 1.0940. A break of this level could see this market rally further to 1.1115 and 1.1180.
If the EURO cannot hold above 1.0760 we will see a move into 1.0600. A strong break of this level may result in a move into 1.0470, however, any weakness below this level could see a move into parity at 1.0355.
GBP/USD – 1.2053 (-345 or -2.78%)
As we suggested last week, the Cable couldn’t get through sticky resistance and found sellers thanks to a slightly dovish-leaning Bank of England meeting.
VOLATILITY ALERTS:
Fri 18:00 – UK GDP m/m
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 pushback 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 – 131.18 (+139 or +1.07%)
The Dollar Yen is trying to secure an upside breakout of the range but we can’t imagine it will be plain sailing.
VOLATILITY ALERTS:
Weds 04:00 – Fed Chair Powell speaks
Thurs 01:15 – Fed Member Williams speaks
Sat 02:00 – Prelim UoM Consumer Sentiment
For a move to the upside, we must now see this market hold above 129.50. Should this occur we will look for a move into 131.40, and if upside momentum is strong we could see a move higher into 132.50 and potentially 134.50.
If we cannot hold above 129.50, we could see a move back to test 126.90 before a pause to the downside. A break below this level may result in a sharp move lower into 125, and any further breaks to the downside may see a bigger move into 123.60.
COMMODITIES
GOLD – 1865 (-63 or -3.27%)
Gold’s rally looks over after strong selling on Friday – but has the market interpreted last week’s data correctly?
VOLATILITY ALERTS:
Weds 04:00 – Fed Chair Powell speaks
Thurs 01:15 – Fed Member Williams speaks
Sat 02:00 – 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 – 22885 (-648 or -2.75%)
A less volatile than an anticipated week for BTC but new buyers must be found to sustain this trend higher.
For a move higher we must now see this market hold 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 hold 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 175005 can’t be ruled out, maybe even a 15515 print.
