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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7106 (-29 or -0.41%)
A very choppy week for the ASX which saw it close slightly lower.
VOLATILITY ALERTS:
Tues 11:30 – NAB Business Confidence
Weds 09:15 – RBA Gov Lowe speaks
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 – 13014 (-1602 or -10.96%)
The DAX endured its worst week since March 2020 as investors pressed the exit button on European assets.
VOLATILITY ALERTS:
Thurs 23:45 – ECB Interest Rate Decision
Fri 00:30 – ECB Press Conference
For the DAX to move higher we would like to see it hold above 13000. Should this occur then 13250 is the next level ahead. If upside momentum is strong then 13360 and 14140 cannot be ruled out.
To the downside, should we not see it hold above 13000, we will look for a move into support at 12630. A strong break and close below this handle and 12445 is the next level down. If downside pressure mounts then 12100 cannot be ruled out.
US
S&P 500 – 4330 (-45 or -1.03%)
US equities held up much better than their European counterparts but the SPX still slid lower.
VOLATILITY ALERTS:
Thurs 02:00 – Jolts Jobs Openings
Fri 00:30 – CPI and Core CPI M/m and Y/y
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 – 0.7374 (+152 or +2.1%)
The Aussie Dollar outperformed in the G7 currencies with an impressive break higher – does this move have more to go?
VOLATILITY ALERTS:
Tues 11:30 – NAB Business Confidence
Weds 09:15 – RBA Gov Lowe speaks
For a move higher this week, we would like to see it hold above 0.7343. We will then be targeting a move through 0.7392. If we see a strong break and close above this level then we can’t rule out a move to 0.7473.
If this market cannot hold above 0.7343, we could see a move down into 0.7285. A strong break of this level may result in a move into 0.7250, however, any weakness below this level could see a sharp drop into 0.7170.
EUR/USD – 1.0933 (-339 or -3.01%)
Like the DAX, investors exited Europe and that meant pain for the Euro as it sold off aggressively.
VOLATILITY ALERTS:
Thurs 23:45 – ECB Interest Rate Decision
Fri 00:30 – ECB Press Conference
Fri 00:30 – US CPI and Core CPI M/m and Y/y
For a move higher we would like to see the Euro close above 1.1000. Should this occur we could see a move into 1.1105. A break of this level could see this market rally further to 1.1155 and 1.1225.
If the EURO cannot close above 1.1000, we will see a move back into 1.0875. A strong break of this level may result in a move into 1.0780, however, any weakness below this level could see a sharp drop into 1.0575.
GBP/USD – 1.3235 (-174 or -1.3%)
The Pound also sold off as investors flock from those countries potentially most affected by the Ukraine crisis and imposed sanctions.
For a move to the upside, we would like to see Cable close above 1.3290 before a break higher through 1.3435. If this market can see a strong close above this level we may then see a strong push back into 1.3535. If upside momentum is really strong then a move back into 1.3620 can’t be ruled out.
Should we fail to close above 1.3290, we will look for a move down to 1.3198. A break below this level however could see Cable further depreciate to 1.3055 by the week’s end and if momentum is very weak we cannot rule out a move to 1.2980.
USD/JPY – 114.86 (-66 or -0.57%)
Another relatively subdued week for the Dollar Yen as the battle between the two havens plays out.
VOLATILITY ALERTS:
Thurs 02:00 – Jolts Jobs Openings
Fri 00:30 – CPI and Core CPI M/m and Y/y
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 – 1970 (+82 or +4.34%)
A ripping Friday sees Gold back to retest it’s recent ‘invasion day’ high – will it get a break here and run into the 2k handle?
VOLATILITY ALERTS:
Fri 00:30 – US CPI and Core CPI M/m and Y/y
For a move higher we need to see this market hold above 1960. Should this occur we could see a move back into 1990, and any break of this level could see a stronger move into 2015. If momentum is really strong then 2075 cannot be ruled out.
If Gold cannot hold above 1960, we will look for a move back down to 1915. A break below this level could see a move lower into 1875, and if momentum is very strong to the downside we could see a move to 1830.
CRYPTOS
BITCOIN – 39105 (+130 or +0.33%)
BTC hit a wall of resistance and is now back below the 40k handle – are we set for another retest of the recent lows?
For a move higher we must now see this market close 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 close 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.
