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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6823 (-183 or -2.61%)
Not a pretty week for the ASX as sellers regain control.
VOLATILITY ALERTS:
Tues 14:30 – RBA Cash Rate
Weds 11:30 – GDP Q/q
Thurs 13:05 – RBA Gov Lowe speaks
For a move higher we would like to see the ASX close above 6875. Should this occur, a move into 6980 could be expected; and if momentum is strong we cannot rule out moves to 7030 and 7135.
Failure to close above 6875 means a potential move into 6745. 6650 is the next support level down if 6745 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6535.
EUROPE
DAX – 12710 (-106 or -0.83%)
The DAX edged lower again with any early session rallies being sold into.
VOLATILITY ALERTS:
Thurs 22:15 – ECB Cash Rate
Thurs 22:45 – ECB Press Conference
For the DAX to move higher we would like to see a close above 12965. Should this occur then 13250 is the next level ahead. If upside momentum is strong then 13600 and 13890 cannot be ruled out.
To the downside, should we not see it close above 12965, we will look for a move into support at 12635. A strong break and close below this handle and 12445 is the next level down. If downside pressure mounts then 12300 cannot be ruled out.
US
S&P 500 – 3932 (-109 or -2.7%)
The SPX continued its downtrend as NFP numbers came out just above expectation, raising the chances of the Fed staying hawkish.
VOLATILITY ALERTS:
Weds 00:00 – ISM Services PMI
Thurs 23:10 – Fed Chair Powell speaks
For a move higher we would like to see the S&P close above 3965. Should this occur, we will look for a move to 4035; and if momentum is strong we cannot rule out moves to 4085 and 4160.
If we cannot hold above 3965, we could see this market move down into 3915. A break of this level however may result in a quick move down to 3840, and if momentum to the downside remains strong we may see a fast move back down to 3740.
FOREX
AUD/USD – 0.6807 (-84 or -1.22%)
Another risk-off week saw the Aussie fall… though there’s perhaps the reason for slightly more optimism than its G10 peers.
VOLATILITY ALERTS:
Tues 14:30 – RBA Cash Rate
Weds 11:30 – GDP Q/q
Thurs 13:05 – RBA Gov Lowe speaks
For a move higher this week, we would like to see it close above 0.6850. We will then be targeting a move through 0.6945. If we see a strong break and close above this level then we can’t rule out a move to 0.6995. Should momentum to the upside be really strong then 0.7060 could be targeted.
If this market cannot close above 0.6850, we could see a move down into 0.6765. A strong break of this level may result in a move into 0.6715, however, any weakness below this level could see a sharp drop into 0.6670.
EUR/USD – 0.9964 (-8 or -0.08%)
The Euro is holding up as markets price in the chances of a hawkish ECB.
VOLATILITY ALERTS:
Thurs 22:15 – ECB Cash Rate
Thurs 22:45 – ECB Press Conference
For a move higher we would like to see the Euro close above 1.0000. Should this occur we could see a move into 1.0072. A break of this level could see this market rally further to 1.0215 and 1.0355.
If the EURO cannot close above 1.0000, we will see a move into 0.9950. A strong break of this level may result in a move into 0.9875, however, any weakness below this level could see a move into 0.9700.
GBP/USD – 1.1738(-229 or -1.95%)
The GBP’s direction of travel looks set and could soon threaten multi-decade lows.
VOLATILITY ALERTS:
Weds 19:00 – Monetary Policy Report Hearing
For a move to the upside, we would like to see Cable close above 1.1640 before a break higher into 1.1760. If this market can see a strong close above this level we may then see a strong pushback into 1.1825. If upside momentum is really strong then a move back into 1.1955 can’t be ruled out.
Should we fail to hold above 1.1640, we will look for a move down to 1.1490. A break below this level however could see Cable further depreciate to 1.1400 by the week’s end and if momentum is very weak we cannot rule out a move to 1.1330.
USD/JPY – 140.19 (+270 or +1.96%)
The Dollar Yen has broken the key 140 level and looks set for another run higher.
VOLATILITY ALERTS:
Weds 00:00 – ISM Services PMI
Thurs 23:10 – Fed Chair Powell speaks
For a move to the upside, we must now see this market hold above 140. Should this occur we will look for a move into 142, and if upside momentum is strong we could see a move higher into 144.9 and potentially 147.75.
If we cannot hold above 140, we could see a move back to test 139.25 before a pause to the downside. A break below this level may result in a sharp move lower into 137.20, and any further breaks to the downside may see a bigger move into 135.30.
COMMODITIES
GOLD – 1712 (-26 or -1.5%)
Gold has once again approached a significant support level and bulls will be under pressure once more.
VOLATILITY ALERTS:
Thurs 23:10 – Fed Chair Powell speaks
For a move higher we need to see this market close above 1720. Should this occur we could see a move into 1740; and any break of this level could see a stronger move into 1750. If momentum is strong then 1765 cannot be ruled out.
If Gold cannot close above 1720, we will look for a move down to 1710. A break below this level could see a move lower into 1697; and if momentum is very strong to the downside we could see a move to 1680.
CRYPTOS
BITCOIN – 19945 (+45 or +0.23%)
An eerily quiet week for Bitcoin as it holds around the 20k level.
For a move higher we must now see this market close strongly above 20000. Should this occur we could see a move into 21715 before retesting 23675. If upside momentum is really strong then we can’t rule out 25875.
Failure to close above 20000 could see a move into 18700. If selling pressure takes control then we could see a move down to 17560. A close below this level and 14000 can’t be ruled out, maybe even a 12320 print.
