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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7263 (-21 or -0.29%)
The ASX edged lower but not enough for our levels to change this week.
For a move higher we would like to see the ASX close above 7310. Should this occur, a move above 7385 should be expected, and if momentum is strong we cannot rule out moves to 7465 and 7555.
Failure to close above 7310 means a potential move into 7215. 7135 is the next support level down if 7215 doesn’t hold. If downside momentum is really strong then we could see another leg down into 7030
EUROPE
DAX (40) – 15911 (-72 or -0.45%)
The DAX continues to face firm resistance and remains range bound.
For the DAX to move higher we would like to see it close above 15970. Should this occur then 16090 is the next level ahead. If upside momentum is strong then 16270 and 16500 cannot be ruled out.
To the downside, should we not see it close above 15970, we will look for a move into support at 15820. A strong break and close below this handle and 15650 is the next level down. If downside pressure mounts then 15515 cannot be ruled out.
US
S&P 500 – 4118 (-21 or -0.51%)
The SPX also faces strong resistance at what remains a key area for this market.
VOLATILITY ALERTS:
Mon 22:30 – Empire State Manufacturing Index
Tues 22:30 – Core Retail Sales & Retail Sales m/m
Sat 01:00 – Fed Chair Powell speaks
For a move higher we would like to see the S&P close above 4150. Should this occur, we will look for a move through 4215, and if momentum is strong we cannot rule out moves to 4320 and 4425.
If we cannot close above 4150, we could see this market move down into 4095. 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 – 0.6640 (-112 or -1.66%)
The Aussie Dollar gave back all of the previous week’s gains as softer Chinese data sets weighed on sentiment.
For a move higher this week we would like to see it close above 0.6670. We will then be targeting a move through 0.6715. If we see a strong break and close above this level then we can’t rule out a move to 0.6755. Should momentum to the upside be really strong then 0.6825 could be targeted.
If this market cannot close above 0.6670, we could see a move down to 0.6585. A strong break of this level may result in a move into 0.6525, however, any weakness below this level could see a sharp drop into 0.6385.
EUR/USD – 1.0849 (-169 or -1.53%)
The Euro is threatening a new move lower as flow returns into the USD despite softer than expected inflation data.
VOLATILITY ALERTS:
Tues 22:30 – US Core Retail Sales & Retail Sales m/m
Sat 01:00 – Fed Chair Powell speaks
For a move higher we would like to see the Euro close above 1.0940. Should this occur we should see a move above 1.1115. A break of this level could see this market rally further to 1.1215 and 1.1385.
If the EURO cannot close above 1.0940 we will see a move into 1.0760. A strong break of this level may result in a move into 1.0600, however, any weakness below this level could see a move into 1.0470.
GBP/USD – 1.2448 (-182 or -1.44%)
The Cable made new highs but ended the week lower as GBP momentum was no match for the USD.
VOLATILITY ALERTS:
Tues 16:00 – Claimant Count Change
Weds 19:50 – BoE Gov Bailey speaks
For a move to the upside, we would like to see Cable close above 1.2600 before a break higher into 1.2755. If this market can see a strong close above this level we may then see a strong pushback into 1.2975 If upside momentum is really strong then a move back into 1.3160 can’t be ruled out.
Should we fail to close above 1.2600, we will look for a move down to 1.2405. A break below this level however could see Cable further depreciate to 1.2275 by the week’s end. And if momentum is very weak we cannot rule out a move to 1.2145.
USD/JPY – 134.82 (+90 or +0.67%)
The Dollar Yen continues to make new higher lows on the weekly chart as the overall trend higher continues.
VOLATILITY ALERTS:
Mon 22:30 – Empire State Manufacturing Index
Tues 22:30 – Core Retail Sales & Retail Sales m/m
Sat 01:00 – Fed Chair Powell speaks
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 139.10 and potentially 140.30.
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 – 2010 (-6 or -0.3%)
Gold bounced off the psychological handle of 2000 but the recent run of lower highs from the all-time high failure suggests bears remain in control for now.
VOLATILITY ALERTS:
Mon 22:30 – Empire State Manufacturing Index
Tues 22:30 – Core Retail Sales & Retail Sales m/m
Sat 01:00 – Fed Chair Powell speaks
For a move higher we need to see this market close above 2015. Should this occur we could see a move into 2030; and any break of this level could see a stronger move into 2050. If momentum is strong then 2075 cannot be ruled out.
If Gold cannot close above 2015, we can see a move down to 2000. A break below this level could see a move lower into 1960; and if momentum is very strong to the downside we could see a move to 1910.
CRYPTOS
BITCOIN – 26911 (-2121 or -7.31%)
We got the break discussed in last week’s brief and also saw a reversal off our key downside level – further downside to come?
For a move higher we must now see this market close above 28000. Should this occur we could see a move into 31050 before retesting 32590. If upside momentum is really strong then we can’t rule out 36850.
Failure to close above 28000 could see a move into 25875. If selling pressure takes control then we could see a move down to 23675. A close below this level and 21715 can’t be ruled out. 20000 is the more psychological handle below that.
