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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7349 (-99 or -1.33%)
The ASX edged lower but overall price action remains quite choppy.
For a move higher we would like to see the ASX close above 7400. Should this occur, a move into 7500 could be expected; and if momentum is strong we cannot rule out moves to 7600 and 7732.
Failure to close above 7400 means a potential move back into 7272. 7202 is the next support level down if 7091 doesn’t hold. If downside momentum is really strong then we could see a sharp move to 7000.
EUROPE
DAX – 16208 (+58 or +0.36%)
The DAX crept higher after posting new all-time highs in the week – but how will potential new lockdowns across Europe affect sentiment?
For the DAX to continue its move higher we would like to see it hold above 16150. Should this occur then 16500 is the next level ahead. If upside momentum is strong then 16750 and 17000 cannot be ruled out.
To the downside, should we not see it hold above 16150, we will look for a move into support at 16050. A strong break and close below this handle and 16000 is the next level down. If downside pressure mounts then 15800 cannot be ruled out.
US
S&P 500 – 4706 (+6 or +0.13%)
A flat week overall for the SPX as the US wraps up another successful earnings season.
For a move higher we would like to see the S&P hold above 4700. Should this occur, we will look for a move to 4750, and if momentum is strong we cannot rule out moves to 4780 and 4800.
If we cannot hold above 4700, we could see this market move down into 4635. A break of this level however may result in a quick move down to 4600, and if momentum to the downside remains strong we may see a fast move back down to 4550.
FOREX
AUD/USD – 0.7330 (-96 or -1.31%)
The Aussie Dollar continued its move lower and closed the week below the up-channel bottom – could this market be set for more pain?
For a move higher this week, we would like to see it close back above 0.7250 We will then be targeting a move through 0.7342. If we see a strong break and close above this level then we can’t rule out a move to 0.7423.
If this market cannot close above 0.7250, we could see a move down into 0.7222. A strong break of this level may result in a move into 0.7170, however, any weakness below this level could see a sharp drop into 0.7065.
EUR/USD – 1.1281 (-162 or -1.42%)
A continually dovish ECB and newly imposed lockdowns in Europe ahead of the winter – things aren’t going too great in the Euro area.
For a move higher we would like to see the Euro close above 1.1350. Should this occur we could see a move into 1.1425 before a pause. A break of this level could see this market rally further to 1.1500.
If the EURO cannot hold above 1.1350, we will see a move back into 1.1225. A strong break of this level may result in a move into 1.1155, however, any weakness below this level could see a sharp drop into 1.1105.
GBP/USD – 1.3444 (+31 or +0.23%)
The Cable closed the week relatively flat so our levels remain unchanged.
For a move to the upside, we would like to see Cable hold above 1.3435 before a break higher through 1.3534. If this market can see a strong close above this level we may then see a strong push back into 1.3620. If upside momentum is really strong then a move back into 1.3666 can’t be ruled out.
Should we fail to hold above 1.3435, we will look for a move down to 1.3290. A break below this level however could see Cable further depreciate to 1.3200 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3055.
USD/JPY – 114.01 (+9 or +0.08%)
A promising start to the week was then quickly faded with continued indecision at these multi-year highs.
For a move to the upside, we must now see this market hold above 113.70. Should this occur we will look for a move into 114.55, and if upside momentum is strong we could see a move higher into 115.47 and potentially 116.11.
If we cannot hold above 113.70, we could see a move back to test 113.20 before a pause to the downside. A break below this level may result in a sharp move lower into 112.25, and any further breaks to the downside may see a bigger move into 111.70.
COMMODITIES
GOLD – 1865 (-19 or -1.02%)
Gold moved lower due to a stronger USD on Friday as risk-off sentiment crept back into markets.
For a move higher we need to see this market close above 1850. Should this occur we could see a move back into 1875, and any break of this level could see a stronger move into 1905. If momentum is really strong then 1930 cannot be ruled out.
If Gold cannot close above 1850, we will look for a move back down to 1833. A break below this level could see a move lower into 1814, and if momentum is very strong to the downside we could see a move to 1786.
CRYPTOS
BITCOIN – 58479 (-5139 or -8.08%)
Bitcoin endured a lot of selling in the week as traders digest the inclusion inside the US infrastructure bill and what that may mean for the crypto industry.
For a move higher we must now see this market close above 58000. Should this occur we could see a move into 60000 before retesting 63480. If upside momentum is really strong then we can’t rule out 64920.
Failure to close above 58000 could see a move down to 55000. If selling pressure takes control then we could see a move down to 52860. A close below this level and 50000 can’t be ruled out.
